A Test of Time and Money: The Future of Podcast Advertising

Written By

SMI Staff

Published On

Thursday, Jun 02

A May 23rd article in the Wall Street Journal explores a new revenue-generating model in the podcast market: charging users to listen. This is a shift from the current ad-supported model to a subscriber-based model, and comes as marketers continue to hone in on the most effective ways of reaching consumers and generating revenue. 

The company leading the way in experimenting with charging listeners for content is podcast app and ad network Acast, based in Sweden. On Monday May 23, the company launched a service called Acast+ that allows podcasters to set their own prices for content and split revenue with Acast. Subscribers can then listen to their preferred programs without advertising. “You can monetize through ads and you can monetize through payment,” said Mans Ulvestam, co-founder and CEO of Acast. 

So what does this mean for SMI and our partner in endorsement radio advertising, Ad Results Advertising, as well as other advertisers in the audio space? Time will tell, and as the headline of the WSJ article states, this new venture into subscriber-based revenue models for podcast producers is a “test.” What we do know is that the podcast platform gives marketers a previously untapped channel for engaging with consumers and offering valuable content. Direct response marketers can target podcast listeners with ads promoting coupon codes, allowing the ROI to be more easily tracked. Brand response marketers are seeing the trend and following suit in developing ad content of their own.

There’s no doubt that the podcast boom presents a ton of profit opportunity. 17% of Americans over the age of 12–around 46 million people– listen to at least one podcast each month. That figure is up from just 9% in 2008, according to Edison Research. Ira Glass, host of the wildly popular This American Life radio show, told Adweek in March of this year that the podcast for his hit show now makes more money in advertising than the actual radio show does. Estimates from ZenithOptimedia show ad spending on podcasts in the U.S. could hit 35.1 million in 2016. 

While the best revenue model for podcasts remains up in the airwaves, one thing is certain: people are listening and advertisers are paying close attention.

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