How podcasting Reaches $5 Billion
Podcasting has been hovering around $2 billion annually in the U.S. for a while. It feels like we are stuck. Yet the audience is growing, and we know attention to podcast ads is off the charts. What’s stopping us? What do we need to do to reach $5 billion in the coming years?
No one has a better perspective or more understanding of the audio marketplace than Pierre Bouvard. As Chief Insights Officer of Cumulus Media | Westwood One, Pierre has been studying audience trends for years and has a front row seat meeting with decision makers at blue chip advertisers and their agencies all over the country. We sat down to discuss the dynamics of ad spending, the obstacles standing in podcasting's way, and the strategies that could unlock its full potential.
Steven Goldstein: Podcasting is at $2 billion now, but the goal is $5 billion. How do we get there?
Pierre Bouvard: Podcasting has grown rapidly, but to reach $5 billion, the industry needs to adjust its advertising mix. Right now, nearly 50% of podcast ad revenue comes from direct-to-consumer brands—companies selling mattresses, health services, and subscription-based products online. These advertisers use podcasting to drive listeners to websites, taking advantage of the medium's ability to engage and convert.
The great thing about direct response advertisers is they’re not as worried about brand safety. If you don't have ratings, they’re not bothered. They're just driven by sales and that makes them more adventurous. They don't worry if there are naughty words or discussions about certain topics.
If they can sell stuff, they're in, and direct response advertisers keep spending! For years, these kinds of advertisers have said we've never seen anything drive sales like podcasting.
For podcasting to grow beyond its current base, it needs to attract more brand advertisers—those with larger budgets who seek to create future demand, rather than just converting existing demand.
Brand marketers are in the positive memory business, not the lead generation business. These marketers know that the brand that’s remembered is the brand that gets bought. They aim for fame.
SG: What's the growth trajectory needed to hit the $5 billion target?
PB: Podcasting needs to grow by approximately 20% per year. While that sounds ambitious, it's in line with the medium's historical growth rates. If the industry can maintain a compounded annual growth rate (CAGR) of 20%, it will be $5 billion in five years.
Maintaining momentum requires attracting new advertiser categories and reinforcing podcasting's value for long-term brand growth.
SG: Why has podcasting struggled to attract more brand advertisers?
PB: Brands and their media agencies are creatures of habit. For decades, they've directed brand-building budgets toward television in all its forms, online video, and social. Podcasting needs to carve out its own identity as a unique environment for storytelling, engagement, and audience intimacy.
SG: What about measurement? Is that a sticking point?
Pierre Bouvard speaking to my NYU Business of Podcasting class about podcast advertising
PB: Definitely. Agencies trust TV because it provides consistent, familiar metrics. Podcasting has faced challenges with measurement and attribution, though that's improving. Still, podcasting has multiple audience charts. That’s confusing to buyers. Who’s number one? It depends on which chart you look at and who the clients are.
Two new entrants are upping the podcast measurement game. Edison Podcast Metrics for media planning and the Bumper for its Dashboard for audience currency.
Edison’s Podcast Metrics is the most complete measure of American podcast audiences. They capture all audiences to all shows on all platforms (YouTube, Apple, Spotify etc.).
In a sign of confidence, Nielsen is now marketing Edison Podcast Metrics to U.S. advertisers and agencies.
Dan Misener’s firm Bumper has created the Bumper Dashboard, which aggregates podcast listening data from a variety of sources including the biggest podcast consumption platforms and hosting providers. The dashboard presents a unified view of actual podcast consumption.
Misener is focused on moving past downloads. Downloads aren’t people and not every download gets played. His focus is to report actual listening.
SG: Let's talk about brand safety. That’s a hot topic with so many different podcasts out there. Is that holding advertisers back?
PB: Yes, brand safety is a concern—especially with genres like news, politics, or even true crime, which are hugely popular but cause hesitation for some advertisers.
Many advertisers don't consider podcasting because of concerns over brand safety and brand suitability.
True crime podcasts attract massive audiences, yet advertisers hesitate despite running ads in true crime TV shows. We need data-driven insights to show marketers if you’re running in all these true crime TV shows, it’s safe to run in true crime podcasts. It’s the same audience, just 25 years younger!
SG: But there are tools like Barometer and Sounder out there to help address that concern. Are advertisers using these services?
PB: Tools like Barometer provide granular controls for ad placement, but they're not yet mainstream. Simply put, Barometer isn't famous. It’s a great platform for ensuring brand safety, but most marketers and media agencies aren't aware of it. We need to make tools like Barometer as familiar to media strategists and planners as Nielsen or Comscore.
I spoke with a major marketer who requires their team to listen to five podcast episodes every week to check for brand suitability. That does not scale.
Agencies and advertisers need more efficient ways to assess content. Instead of listening to five episodes manually, they need a system to ingest thousands of episodes and analyze brand safety across entire content categories. That exists. It’s called Barometer.
The challenge isn't whether podcasting can reach $5 billion. It's whether the industry can help advertisers recognize the power of audio.
SG: What makes podcasting so attractive to advertisers?
PB: Podcasting delivers an attentive, highly engaged audience. Podcast audiences say “being entertained” and “learning something new” are the two main reasons they listen. To learn something, you need to really concentrate.
That level of engagement is gold for advertisers looking to build brand equity. At a median age of 36, podcasting is nearly 30 years younger than linear TV. That is a really huge selling point.
SG: What about programmatic ad buying? Has it helped? Is there money there?
PB: Absolutely. Programmatic buying has made it easier for agencies to purchase podcast inventory efficiently. The more seamless this process becomes, the faster the ad dollars will flow.
SG: Agencies have departments for TV, digital, and print. What about audio?
PB: That's a big gap. Many agencies don't have dedicated audio departments. Audio often gets lumped into 'other media' despite its significant reach and potential. If you look at big advertisers and ask the question, “What percent of your budgets are in audio?” More often than not, the answer is zero.
One obstacle: Podcasting is not a media option in many media planning tools. This summer, in a landmark move, Nielsen will add podcasting to NMI, their widely used media planning platform. Nielsen is also working to enhance the podcast data in Commspoint, their media optimization tool.
When you combine AM/FM radio, podcasting, and streaming audio, you're looking at a massive reach vehicle that deserves attention. Nielsen reports 61% of 18-49s are reached weekly by TV. That means 40% of 18-49s are not reached by TV.
Edison’s “Share of Ear” reports 82% of Americans are reached each day by ad-supported audio. 82%! How much time is spent each day with ad-supported audio? Two and a half hours a day! That’s stunning.
SG: Where should the growth come from? Which budgets can podcasting tap into?
PB: Podcasting can grow by tapping into three key areas:
1. Linear TV: While still a wonderful brand building medium, 80% of TV’s audience is over the age of 50. To build brands among 18-49s, podcasts offer significant scale.
2. Digital display ads: IAB says 13% of total ad spend goes to display ads, which suffer from low engagement and attentiveness. Podcasts offer an immersive, high-attention environment.
3. Streaming video and connected TV: These platforms have stunningly high CPMs and excessive ad repetition. Podcasts provide a more affordable and audience friendly ad environment.
The same advertisers who've succeeded in video and digital can find similar success in podcasting if they're open to testing and learning.
SG: How does video play in to all of this?
PB: That makes podcasting even more attractive. The industry will need to report how many delivered impressions are audio only and how many are audio + video.
SG: So, what needs to happen next?
PB: Besides brand safety and audience measurement, there are six other items on the checklist:
1. Brand lift measurement: The podcast industry will need to lean into brand lift measurement to provide the outcomes desired by brand marketers.
2. Enhanced data for media mix modelers: These firms assess the effectiveness of brand marketer investments. Media Mix Modelers need to be consulted to understand desired data specifications and formats for delivered podcast ad impressions. The IAB is leading this process.
3. Create always-on data feeds of delivered impressions: Advertiser media teams have dashboards that show impressions and GRPs delivered in the past week and month for TV, Google, YouTube, and Meta. To be at the adult table, audio needs to provide always-on reporting of delivered impressions and as-run GRPs.
4. Podcast planning and buying needs scale, IE. hundreds of shows: No more “pinprick” media plans that buy a handful of podcasts that narrowly align with the advertiser’s product. Podscribe reports podcast campaigns reach less than a quarter of the available podcast audience. Just as TV campaigns run ads in hundreds of shows, podcast campaigns should include hundreds of podcasts to build scale and reach. To reach 70% of the weekly podcast audience, 300 podcasts should be purchased.
5. Pretest creative to ensure effectiveness: Creative quality drives half of sales effect. Pretest podcast ads with creative effectiveness firms like System1 and ABX. Ensure ads score well on brand association and positive emotion.
6. Use emotion in brand building creative: The most effective ads for brand marketers create positive memories via lump in the throat storytelling and humor. These are very different ads than direct response creative, which are a rational recitation of features, benefits, and relentless calls to action.
What’s helpful is that folks in marketing personally love listening to podcasts. We need to convert this exuberance for podcasts as amazing personal entertainment to envisioning podcasts as a major element of media plans. We need to better tell the story that podcast audiences are younger, more affluent, and more attentive than most media audiences.
SG: Let’s get back to the $5 billion number. Dreaming or do-able?
PB: Do-able! Podcasts are largely under-commercialized and have remarkable growth potential, but the journey requires strategic planning, clearer metrics, and persistent education. Capturing a larger share of brand-building budgets will be essential. There is so much opportunity here.
The challenge isn't whether podcasting can reach $5 billion. It's whether the industry can help advertisers recognize the power of audio.
SG: Thank you, Pierre. All of this is about a relatively new business that is growing up and changing at a rapid pace. This is a very helpful roadmap.
Note: This interview was edited for length and clarity
Pierre and the Cumulus Media | Westwood One Audio Active Group publish truly valuable data every Tuesday on their blog. They partner with Edison Research, Signal Hill Insights, System1, and many others.
At Podcast Movement in Chicago, we have a truly excellent group for our “View From The Top” series: Will Pearson, President IHeart Podcasts; Stephanie Chan, Partner Manager, YouTube Podcasts; Pete Birsinger, CEO Podscribe; Neil Mody, CEO Headliner. Join us! Tuesday, April 1, 11am.
We are conducting a workshop at the Borrell Local Media conference in Phoenix (March 10) on the largely untapped local podcast opportunity. You will meet companies innovating in the space and we will share frameworks for success.