What Did the Podcast Industry Learn in 2017?
Welcome to The Yard, a blog by Backyard Media that explains the podcast industry and podcast advertising.
2017 was a big year for podcasting, arguably the biggest. New podcasts debuted, new production studios formed, and new advertising companies came online (including Backyard Media!). More importantly, we saw new developments in how the industry produces, markets, distributes, and sponsors podcasts. Here are a few of the most important trends that we at Backyard Media have identified in the industry from this past year.
1. Content is still king.
Podcasts are primarily a creative medium. The types of content that appear on podcasts can vary widely, from nonfiction storytelling to political news podcasts to expert panel discussions.
We've noted that many podcast listeners are drawn to the medium in part because they don't think they can get the content anywhere else. And in many cases, they're right. Podcast studios and larger media organizations are recognizing the value of podcasts as a digital medium and are creating podcast-only content.
The podcasts that have done well are those podcasts that have personalities. They have a particular sound or they engage topics with a particular structure or approach.
Podcasts also differentiate themselves with the personalities of their hosts. As we showed in this blog post, listeners feel they develop a relationship with the podcast host after having spent hours of time listening to their content.
Podcasts that did well in 2017 were those that explored ideas many listeners had never thought about - investigative podcasts like This American Life's S-Town and the L.A. Times' Dirty John, or narrative nonfiction podcasts like our podcast partner Hi-Phi Nation. Other successful podcasts informed and engaged listeners on issues like national security, like our partner War on the Rocks.
And on that note about podcast hosts, another trend we noticed is...
2. The host-listener relationship is paramount.
This point is very crucial, and it differentiates podcasts as a digital medium from others like online video, Internet radio, and streaming TV. As we just said, there's something about the intimacy of podcasts that causes listeners to develop a connection with podcast hosts.
Hosts develop relationships with their audiences through their distinctive personalities and content. Podcast advertisers should respect this relationship by working with the podcasts they sponsor. They can do this by ensuring hosts have every opportunity to try and understand their product. An advertisers can also trust hosts' judgement when it comes to ad reads if they are unsure how to market to a podcast audience. We discuss in this blog post about providing flexibility for a host when crafting a podcast ad.
We see the importance of leveraging this relationship in the Interactive Advertising Bureau's data about podcast ad delivery. In 2016, host-read ads remained the most popular way to deliver ads to listeners. A full 60% of ads were host-read, with the number of "produced" ads (where either the sponsor or the podcast production company is responsible for the ad) ticking upward from 37% to 40%.
The benefits to sponsors are obvious when they understand and trust this relationship between podcast hosts and podcasts listeners. We've seen how audiences respect hosts' product recommendations and see ads as a part of the show's content. Furthermore, recent podcast advertising research tells us that podcast ads increase brand lift, brand awareness, and listeners' likelihood to purchase.
3. Podcasts are growing, audiences are growing, and so is the potential for podcast advertising.
Podcasting remains a high-growth media industry. Podcast listening audiences as a share of the US adult population continues to rise. The 2017 Infinite Dial Report showed that 67 million Americans, or 24%, listened to a podcast in the past month. Americans are also listening to more podcasts per week, and listen to them in a variety of locations and when doing other activities.
The year also saw continued innovation in the format of podcast content. We wrote here about the structures that most podcasts take, but new ones took hold in 2017 like the daily news podcast (of which The New York Times' The Daily podcast is the most popular example).
Because of these trends, the amount of money that sponsors are spending on podcast ad campaigns continues to rise at a dizzying rate. The Interactive Advertising Bureau reported that the podcast industry's advertising revenue in 2016 was $119 million. Its estimates for 2017 totaled $220 million - an 85% increase year-over-year. 2018 should see a similar jump in revenue, and another study we examined at a few weeks ago estimated that total industry revenue could be over $500 million by 2020.
Companies' marketing departments are seeing the growth in podcasting, its quality content and loyal audiences, and are shifting their budgets to ensure that podcasts comprise a significant portion of any ad campaign.
We're excited to see the final numbers for industry advertising revenue for the year, which should come in out in spring 2018. So that's the growth we saw in 2017, but...
4. The podcast industry continues to experience change.
As with any industry that is growing as fast as this one is, we saw important changes come to the podcast industry in 2017.
First, podcasts are becoming more professional operations on the whole. They're hiring more staff to develop the content that audiences want to hear. They're investing in equipment to create a better-sounding product. As podcasts gain a larger reach, they're deepening audience loyalty to their content through memberships, access to exclusive content, and live events.
Industry players are also experimenting with different types of ads. We've already mentioned the shift in the percentage of ads that are not host-read. Another type of sponsorship, branded podcasts, remain a small but growing percentage of total podcast advertising. They also represent an excellent opportunity to innovate in what a podcast ad can be and how it can sound to listeners, while still giving advertisers a healthy ROI. Another type of ad technology, dynamic ad insertion, has been gaining traction in the past three years. This technology allows for updated ad spots in older podcast episodes, which increases ad inventory and allows ad spots to remain relevant over time.
We expect that these trends in podcasting - in advertising, content, and technology - will continue in 2018. We at Backyard Media will be sure to update you here on everything new we see in the industry as it happens!
Make 2018 the year you start advertising on podcasts. Contact us to learn more about Backyard Media's podcast partners and learn how easy it can be to get started.
Backyard Media is a marketplace for podcast advertising. We connect content creators of all shapes and sizes with awesome sponsors, providing them with the resources they need to do what they do best. Everyone wins.