The Third annual Podcast Revenue Report is out, and the study by IAB and PwC predicts that podcasting will top one billion dollars in annual revenue by the end of 2021. A billion dollars a year is certainly nothing to sneeze at!
The podcast industry has reached a maturation point that, only a few years ago, many industry analysts thought was decades away. With commutes to and from work becoming longer and longer, the podcast has quickly become a favorite way for people to take in information and entertainment. Many news shows, such as The Rachel Maddow Show, offer a podcast version only moments after they go off the air. And original podcasts such as Serial, Pod Save America, and This American Life have started to take the place of appointment television around the water cooler.
And advertisers have taken notice.
There are a variety of ways of inserting ads into podcasts. There are the traditionally produced “commercial break” advertisements; Dynamic Ads in which the product is brought up naturally in the conversation; and “Host Read” ads in which the host of the show takes a break to read some approved ad copy to the listener. The different methods work uniquely for different podcasts. A narrative show like Serial would use the commercial break type ads, while news and discussion shows are better suited for Dynamic and “Host Read” ads.
The fastest growing genres for advertisers to target are News / Politics / Current Events (18.4%), Comedy (13.9%), Business (12.8%), Education (10.6%) and Arts & Entertainment (10%). With 65% of ads being the “Host Read” ads mentioned above.
The cultural permeation of podcasts should start attracting magazine publishers that have resisted the trend thus far. From both an audience and revenue perspective, we’re about to see tremendous growth, and it’s still possible for magazines to get in on the ground floor before the medium becomes too crowded for smaller publishers to be discovered. Many magazines were far too late when it came to online video, and ended up being drowned out by the Buzzfeed’s of the world. That mistake should not be duplicated.
Where will all this growth come from? Well, for one, the podcast advertising landscape has changed in such a way that will allow it to scale at a much more rapid pace. For most of its existence, the podcast industry has relied on direct response advertising. Because of limits in measurement, direct response ads — the kind that often includes offer codes and is meant to spur the immediate purchase of a product or service — allowed companies to get a sense as to whether their investment in a particular podcast resulted in actual sales. But while plenty of podcasters were able to thrive around direct response marketing, the market size for that kind of sponsorship is still relatively small. In order for their advertising model to really grow, they needed to attract some of the big brands. Cars. Fast food. Beauty products.
And that’s exactly what they’ve done.
Between 2017 and 2018, brand advertising jumped from 25% of all podcast ads to 38%, and this year it will likely overtake direct response advertising.
So why should magazines have podcasts?
Magazines already have incredibly informed people on staff: the writers. Take two or three writers, put them in a room with a topic, and let them go. They’ll be talking about something they’re already knowledgable and passionate about, so most of the work is already done. And other than hosting fees, and buying some decent microphones, there isn’t a whole lot of start-up cost when launching a podcast. And you can use your magazine and e-mail lists to let your subscribers know about it.
The more people you get listening, the more attractive you will be to advertisers. And by offering fun, interesting content on a weekly basis, you’ll likely bring in listeners who had never heard of your magazine, which will allow you to grow your subscriber base with a group of people already interested in your content.
In 2019, a magazine should not simply rely on the tried and true methods of revenue generation. Subscriber revenue and advertising revenue has been the gold standard for decades, but things are changing. Monetized YouTube videos, and now podcasts should become the third and fourth legs of your strategy. Video production can be costly, time-consuming, and hard to monetize (unless you hire some experts in the field), but podcasts can be as simple as talking for half an hour and publishing the results to iTunes. I did it for two years and it quadrupled the subscriber-rate of the online magazine I was working with. And considering the low cost-of-entry, it’s definitely worth a shot.