Opportunities and Risks in Podcast Advertising

Ad revenue from podcasts in the US continues to grow at a staggering rate. When we last posted about this topic in 2018, IAB had reported that ad revenues had increased 275% over two years to just over $257 million and that the market was expected grow to $1 billion by 2021. Although the 2021 numbers aren’t out yet, IAB stood by that prediction last year, and added that revenues could jump to $2 billion by 2023. This creates significant opportunities for advertisers, but also some risks.

The majority of podcast ads are read by hosts. This can be effective because many listeners are more likely to believe something that is said by a trusted host than by an untrusted corporation, but it also creates risks that typically don’t come up in pre-produced ads. One issue is that if a host reads an ad in the first-person, that ad is likely to come across as a testimonial. Among other things, that usually means that the host must actually believe what he reads.