Is it possible for podcasting to become a $5 billion business anytime soon? Or is that just a pipedream?
Pierre Bouvard, Chief Insights Officer of the Cumulus Media Westwood One Audio Active Group, sees a path, even if it requires some optimism — and a different ad mix.
“Podcasting has grown rapidly but to reach $5 billion, the industry needs to adjust its advertising mix,” Bouvard tells Amplifi Media Founder/CEO Steve Goldstein, in an interview originally published in The Amplifi Thought Letter. “Right now, nearly 50% of podcast ad revenue comes from direct-to-consumer brands — companies selling mattresses, health services, and subscription-based products online. These advertisers use podcasting to drive listeners to websites, taking advantage of the medium’s ability to engage and convert.”
Bouvard touts direct response advertisers for their relative boldness when it comes to brand safety, noting that they’re primarily motivated by sales and willing to keep spending.
“For years, these kinds of advertisers have said, ‘We’ve never seen anything drive sales like podcasting.’ For podcasting to grow beyond its current base, it needs to attract more brand advertisers — those with larger budgets who seek to create future demand, rather than just converting existing demand.
“Brand marketers are in the positive memory business, not the lead generation business,” he continued. “These marketers know that the brand that’s remembered is the brand that gets bought. They aim for fame.”
Bouvard said path to making podcasting a $5 billion business means the medium needs to grow approximately 20% per year over five years. Ambitious? Yes, he acknowledges, but in line with historical growth rates. Bouvard said attracting new advertiser categories and reinforcing podcasting’s value will need to continue to maintain momentum.
“Brands and their media agencies are creatures of habit,” Bouvard said, explaining podcasting’s past struggles attracting brand advertisers. “For decades they’ve directed brand-building budgets toward television in all its forms, online video, and social. Podcasting needs to carve out its own identity as a unique environment for storytelling, engagement, and audience intimacy.”
Brand safety is still a real concern, Bouvard said, especially when dealing with genres like news, politics, or true crime — which still give some advertisers pause despite their popularity.
“Many advertisers don’t consider podcasting because of concerns over brand safety and brand suitability,” Bouvard said. “True crime podcasts attract massive audiences, yet advertisers hesitate despite running ads in true crime TV shows. We need data-driven insights to show marketers if you’re running in all these true crime TV shows, it’s safe to run in true crime podcasts. It’s the same audience, just 25 years younger!”
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