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State of the Screens

IAB Reports Podcast Ad Revenue Surpasses $1B

By July 7, 2022July 8th, 2022No Comments

Seven big questions for podcast advertising:
1) How large is the podcast advertising market?
2) What are advertisers trying to accomplish with podcast ads?
3) What share of podcast ads are dynamically inserted?
4) What share of podcast advertising can be targeted by geography?
5) Can podcast advertising be bought programmatically?
6) What is the average age for podcast listeners?
7) How many podcasts are there?

Big question #1: How large is the podcast advertising market?

Podcast advertising (YoY growth) according to the IAB/PwC:
1) 
2015 – $106M
2) 
2016 – $169M ( 59%)
3) 2017 – $314M ( 86%)
4) 2018 – $479M ( 53%)
5) 2019 – $708M ( 48%)
6) 2020 – $842M ( 19%)
7) 2021 – $1.4B ( 72%)
8) 2022P – $2.1B ( 47%)
9) 2023P – $3.1B ( 45%)
10) 2024P – $4.2B ( 37%)

Interesting: Since last year’s forecast, the IAB/PwC increased their estimate for 2022 (↑ 21%) and 2023 (↑ 41%).

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Big question #2: What are advertisers trying to accomplish with podcast ads?

Share of podcast advertising by objective:
1) Direct response – 52%
2) Brand awareness – 46%
3) Branded content – 2%

C922-2022C

Big question #3: What share of podcast ads are dynamically inserted?

Share of podcast advertising by delivery mechanism:
1) 
Edited-in – 51%
2) 
Dynamically inserted – 49%

Big question #4: What share of podcast advertising can be targeted by geography?

Share of podcast advertising with geographic targeting:
1) 
2020 – 23%
2) 
2021 – 26%

Big question #5: Can podcast advertising be bought programmatically?

Share of podcast advertising purchased programmatically:
1) 
2020 – 2.2%
2) 
2021 – 1.7%

Big question #6: What is the median age for podcast listeners?

Median age by media type according to Edison Research:

1) Broadcast TV – 54
2) Radio – 48
3) Podcasts – 34

Big question #7: How many podcasts are there?

Number of podcasts on Spotify (YoY growth):
1) 2018 – 185K
2) 
2019 – 700K ( 278%)
3) 2020 – 2.2M ( 214%)
4) 2021 – 3.6M ( 64%)2022-07-06_16-56-04

Why this matters: Podcasts have grown at a rate 19X faster than users on Spotify.

Growth rate between 2018-21:

1) Podcasts –  1,630%
2) Users –  84%Quote from Lucas Shaw – Reporter @ Bloomberg:
“The number of new podcasts has grown more quickly than the podcast audience, and so the number of listeners per show is going down. The list of shows competing to be that program you try on your weekend walk is longer than the backlog of TV shows you want to watch.”

Outstanding questions:

1) Will dynamically inserted podcast ads lead to more local (geographically targeted) advertisers?

2) Will Spotify be able to build a closed-loop advertising system similar to Meta/YouTube?

3) Will the growth of new podcasts slow down?

Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.