The annual plans have been drafted. The resolutions made (and possibly already broken). The “let’s circle back in the new year” meetings have come back around to flood the calendars. 

It is Q1. Full steam.

For podcasting, perhaps more than any other form of media, the new year means more opportunities on the horizon as the landscape continues to evolve (despite naysayers debating it.)

As the industry takes steps out of the infancy stage that has defined it for so long, podcasters and advertisers alike will feel the medium reach a new age of maturity. This newfound eloquence in podcasting is a result of the macroeconomic climate converging with emerging media trends that drive marketer decision making. 

It is why 2023 is the year of the podcast ad. 

There is no denying that sponsorships (created by the host themselves) play a special role in podcasting and add to the magic of the medium in many ways. But here are a few reasons why podcast ads will be front and center this year, as well as ways for both podcasters and advertisers to work with Acast to take an active role in their podcast advertising strategies.  

Defining a podcast ad

Before we dive into why 2023 is the year of the podcast ad, we need to first determine what a podcast ad is and how that differs from other endorsements heard on podcasts.

Podcast ads can be defined as short pre-recorded messages created by a brand (rather than the podcaster) that offer meaningful reach at scale. Podcast ads occur in the pre-roll, mid-roll, or post-roll of an episode and can be bought directly from a dedicated sales team or programmatically using bid-based buying technologies.

The commonly heard podcast sponsorship differs from an ad spot because sponsorships are longer, editorialized messages delivered by the podcasters themselves.

Evolution of the podcast ad 

As an industry that was built on host-read sponsorships and referral codes, the ad and use of automated technologies has been a major shift in recent years. 

For advertisers, Acast pioneered dynamic ad insertion technology back in 2014, which automates the ad serving process across our network of more than 88,000 podcasts, and means up-to-date, relevant messages can be served in even the oldest of episodes. Additionally, Acast offers a suite of audience-first targeting capabilities, including Conversational Targeting, First-Party Data targeting, geotargeting, and more to enable the most accurate and authentic engagements for their unique brand message. 

For podcasters, the Acast CMS allows them to control where their pre, mid, and post-roll ad slots appear and even gives them the power to determine the categories of brands that can engage with their podcast. 

So, for example, a health and wellness podcaster can easily opt out of ad content from, say, alcohol brands that might not align with their own values. This enables podcasters to still keep the most ad slots possible open – and therefore increase monetization potential – while still maintaining control over the brands and products they work with. 

By opening pre, mid, and post-roll ad slots, podcasters have the potential to make more money without any extra work on their end – Acast’s dynamic ad insertion technology does all the work in the background.

What’s more is that for shows with established audiences, ads can be used in tandem with podcast sponsorships. Meaning that podcasters and advertisers don’t have to choose between ads or sponsorships and can leverage both as the industry and their individual needs continue to evolve. 

Continued market growth

Last year came to a close in a cautiously optimistic fashion for the podcast advertising industry, with US investors amending growth projections from 50% to 15% as a result of macroeconomic uncertainty. But as the markets began to balance out, there was the first slow down in ad decline in five consecutive months, indicating a positive change in media buyer behaviors.

For the new year with these more stabilized projections, experts have forecasted continued growth for the podcast advertising landscape and anticipate that ads and programmatic advertising will experience more popularity among media buyers.

Increased investments in programmatic advertising

Programmatic is a method of buying ads through automated technologies that rely on real time bidding processes, similar to a stock market exchange, that enable advertisers to get the best price at that moment for their ad buy. Ads bought programmatically also offer advertisers the most advanced targeting capabilities to engage with the most relevant audiences for their brand.

According to recent research conducted by Acast, US marketers anticipate that programmatic investments in podcast advertising will nearly triple over the next five years. 

This means that gone are the days of advertisers solely buying ads at the show level. As audiences grow to expect a more personalized ad experience from the content they consume, advertisers are adjusting accordingly with increased investments in targeting solutions that identify the right podcast audiences for their unique message.

This means that the time is now for podcast ads.

Rise of self-serve advertising

In Acast’s recent research of US marketers, more than half of respondents said they prefer to book advertising campaigns through self-service tools. This discovery aligns with Acast’s introduction of a self-serve advertising platform in November of last year. 

With adjusted growth projections throughout the advertising industry, marketing budgets this year will inevitably feel the impact. Self-service tools like the new Acast platform enable advertisers of any size or budget to easily incorporate podcast ads into their media mix. 

Low ad loads

According to research of both marketers and podcast listeners, podcasts have low ad loads in comparison to all other tested forms of media. In fact, 84% of marketers surveyed said that podcasts currently have low ad loads compared to other media. Similarly podcast listeners have low levels of ad fatigue, with only 25% of US listeners saying there are too many ads on the medium.

This means that there is room to grow in the podcast advertising landscape – without alienating listeners – and media buyers are eager to take advantage of all that the medium has to offer. According to the study, 65% of respondents said they expect to increase their marketing spend on podcasts and, when considering marketers who have previously purchased podcast ads, 83% expect to increase their spend on the medium year-on-year.

Advertiser focus on lower funnel metrics

As brands continue to navigate the uncertain economy, they will likely invest more in more lower funnel metrics that drive action. This makes ad slots the most valuable piece of the 2023 podcast offering because it keeps advertisers investing to reach audiences that move the needle for their brand.

Demand for measurement and performance metrics

With marketing budgets under greater scrutiny this year, there will be increased pressures to prove out ROI on every dollar spent. And because many media buyers consider podcast advertising to be an emerging medium, there will be even more demand to quantify and measure ad performance. 

Podcast ads enable more advanced audience targeting than traditional sponsorships, and therefore equipt marketers with more performance metrics to prove out their returns on ad spend.

As the pioneer in podcast advertising, Acast knows that reporting is integral to understanding the effectiveness of each campaign. As such, Acast partners with leading third party measurement and attribution platforms including Podsights, Charitable, Nielsen, KANTAR, Claritas, ArtsAI, Veritone and others to offer a full suite of measurement tools that can be catered to any media objectives.

So what does it all mean?

Simply put: opportunity.

Opportunity for podcasters to turn on their ad slots and make more money working with more brands that align with their values. Opportunity for advertisers to connect with the highly engaged audiences that podcasts have at their disposal. 

For advertisers interested in learning more about the opportunities that Acast podcasts have their brand message, please reach out to sales@acast.com.

For podcasters who want to discuss maximizing ad inventories on Acast, please reach out to support@acast.com.