The podcast advertising market grew by just 5 percent in 2023— its slowest growth rate in at least a decade, according to a new study published by the Internet Advertising Bureau.
Last year, U.S. podcasts pulled in an estimated $1.92 billion in ad revenue, slightly better than the $1.82 billion in ad revenue the medium generated in 2022, according to the 2023 U.S. Podcast Advertising Revenue Study.
The slowdown was due to mid-sized companies pulling back on ad spending in 2023, according to the report’s analysts. That said, the decline in midmarket ad spending hit podcasts harder than the overall digital advertising market, which grew by 7.3 percent in 2023.
The data suggests that the podcast advertising market is maturing. In the past, podcast ads were stereotypically run by direct-to-consumer brands that negotiated directly with podcast networks to run irreverent, native ad spots for mattresses, digital postage, nutrition supplements, and the like.
Today, those DTC campaigns are being replaced by big brands that buy audience-segmented ads programmatically, across thousands of podcasts at once.
Podcasts still represent a uniquely intimate advertising channel, because people trust their favorite podcast hosts, and tend to recall the ads they hear from their favorite shows. Podcast ads boast a 73 percent aided brand recall rate, according to Nielsen.
But the medium’s murky measurement tools mean that only 49 percent of marketers say they feel confident that they can measure the ROI of their ad campaigns on podcasts—the lowest level of confidence across all digital channels, Nielsen says.
Today, roughly 1 out of 3 Americans listens to podcasts at least once a week, typically while commuting, according to Nielsen.
The podcast ad market will continue to grow, crossing the $2 billion mark in 2024 and reaching $2.5 billion by 2026, according to an IAB estimate.
