Why podcast advertising remains unshakable
Advertising in digital audio, such as podcasts, gives 60% higher return on investment compared to advertising in other media channels. That’s the conclusion drawn in a study conducted by OMD’s analytics department Annalect, commissioned by Acast and Spotify. The study examines 37 advertisers in Sweden for a total ad spend of SEK two billion between 2019 and 2021.
The podcasting market has continued to flourish, making it one of the fastest growing media channels to advertise in. The study looked into the commercial value of advertising in podcasts by examining the ROAS (return on ad spend) — in other words, the increase in sales in relation to every SEK invested — for different types of ad purchases. The study shows that the ROAS for the digital audio category is 4.0, which means that ad buyers get an average of four times the money back on every SEK invested.
Gustaf Helleday, Nordic Insights Manager at Acast says: “With this study, we don’t only demonstrate that advertising in podcasts generates a high business value, but it also appears to perform better than several other media types and should therefore be a given part of any media plan. The advertising market within digital audio is still in a relatively young phase and with that, there have been limitations in how large the advertising market has been. Given that podcasts today constitute a significant part of many Swedes’ media consumption, we feel confident in being able to run more advertisers marketing on a larger scale than before.”
Digital audio was the category that had the highest ROAS compared to other media channels in the survey, performing 60% better than average at driving short-term sales.
“This study presents us media buyers with a clear receipt that podcast advertising is extremely effective. Studies like these, with large amounts of data, are important to us as advisors, given that podcasting as a media channel is still relatively new. Although we’ve previously understood the strengths of the podcast medium in terms of reach and consumption behavior, it is crucial for us as media buyers to be able to prove its business value to clients. This study proves that podcast ads are a good investment, both short and long term”, says Jesper Cederäng, Business Development Director at OMD.
The study also looked into the brand-building effect of podcasting as an advertising medium. Results show that branding with the help of podcasts is twice as effective as the average media channel, making it an effective channel for a short-term sales increase as well as a means to build a brand in the long run. The study shows that these two effects amount to a ROAS of 6.2 – meaning advertisers get around six times their investment back in the long term.
Gabriel Aksan, Sales Manager at Spotify in the Nordics, says: “Listening numbers continue to grow year by year, which of course leads to an increase in interest from advertisers. Podcasts are despite this still an underutilized medium – its effectiveness has yet to be discovered by many. Podcast listening is often intimate and engaging, giving advertisers the unique opportunity to reach their target audiences in an attractive and noise-free environment.”
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