More and more people are listening to podcasts, but the advertising offerings are lagging behind. In the United Arab Emirates and Brazil, more people are now listening to podcasts than to the radio. Nevertheless, advertisers are hesitant to invest in the medium. Warc Media observes a clear shift: platforms and publishers are increasingly focusing on video to stimulate growth.
According to Warc Media, podcasting is gaining momentum, partly due to the impact of the American elections, in which Trump strategically utilized the medium. However, advertising revenues continue to lag behind. Warc predicts that global spending on podcast advertising will reach $4.8 billion in 2024 and increase to $5.5 billion by 2026. However, growth is slowing down, especially compared to retail media and CTV.
Listeners opt for video
The global podcast audience is growing and diversifying. By 2025, 66% of the world's population will be listening to podcasts, an increase from 60.6% in 2020. Younger demographics, in particular, are spending more time on podcasts daily compared to older generations. In Gen Z groups, podcast reach has now surpassed that of radio.
The shift towards video content is clearly visible. YouTube is now the largest platform for podcast videos, with over 400 million hours viewed per month. Spotify has seen a 58% increase in the use of video podcasts. Advertisers are showing growing interest in combined audio and video campaigns, which perform better than audio-only campaigns.
Challenges for Podcast Advertisements
Although podcasts have a loyal audience, brands face obstacles when scaling advertising campaigns. A lack of measurement tools and limited targeting options make it difficult to justify large advertising investments. At the same time, many listeners indicate that they skip ads, especially when these are not well integrated into the content.
However, research shows that host-read ads perform better, particularly with longer ads of two minutes or more. This presents opportunities for brands looking to invest in authentic brand messages within podcasts.
Future of podcast advertising
The United States remains the largest market for podcast advertising, accounting for 45.9% of global spending. Despite a relatively low share of advertising revenue, the medium is growing, attracting larger brands such as Amazon and Toyota to podcasts. In the UK, advertising investment is rising by 12.8%, faster than in the US.
The rise of video podcasts could revitalize the advertising market, provided that platforms develop effective measurement methods and advertisers apply the right strategies. The question remains: will listeners make a mass transition to video, or will audio remain the core of the medium?