Advertising remains podcasting’s best monetisation opportunity

Despite the layoffs and budget cuts across the industry in 2023, MIDiA remained optimistic about podcasts. As our 2024-2030 podcast forecasts states, the growth rate will slow, but over the course of seven years, revenue will continue to climb from $4 billion to $10 billion and listeners will grow from almost 700 million to more than 1 billion worldwide.

That reality is already playing out, with iHeartMedia reporting 18% year-on-year revenue growth and Acast reporting 25% year-on-year revenue growth in Q1 2024. Even Bloomberg is now reporting that optimism has returned to podcasting. While platforms and creators consider how to further strengthen revenues through subscriptions, merchandise, and non-audio content, the real driver of this continued growth is the backbone of podcasting industry revenue: advertising. 

Like radio, podcasting does not have a physical product corresponding to a higher per unit value, as is the case with music (e.g., CDs, vinyl) or film (e.g., DVDs or cinema tickets), because podcasts were born open source on the internet. This is important because, a key driver of digital subscription adoption in music, TV, film, and games was the fact that they offered a cost saving for consumers accustomed to paying comparably higher prices for the individual physical products. Podcasts, as well as radio, which has always been predominantly ad-supported, lack this in their consumer offering, making it much harder for subscriptions to gain traction. 

Given its digital birth, podcasting is different from radio in terms of content, audience reach, and listener behavior, but when it comes to the fundamental question of monetisation, radio serves as its closest parallel. While radio may be facing annual decline — thanks in part to podcasting’s rise — by many measures, radio advertising revenue remains strong.

In the attention economy, advertising is all about what creative and format will engage consumers most. Performance marketers are finding it increasingly difficult to capture consumer attention through the digital ads they run on social media platforms like Facebook, Instagram, and TikTok. 

While the effectiveness of audio advertising is crucial for advertisers to understand when considering their advertising budgets, it is also paramount for podcast platforms and creators to be aware of how integral advertising is for growing the industry writ large. Ironically, the additional advantages that podcasting has over radio are the qualities the format also shares with television — i.e., audience, episodic delivery, and show genres — and the ability for the format to bleed into video.

With television and YouTube being some of the most effective advertising mediums for capturing user attention, that puts podcasting in an even better position than radio when it comes to growing advertising. Considering YouTube will continue to be the top consumption source for podcasts, and podcasts will continue to blur the line between audio and video (potentially becoming more like television than radio), if podcasting continues to prioritise advertising as its primary source of monetisation, then podcast optimism will be here to stay.