Gone are the days of podcast advertising being too expensive for small businesses. The podcast advertising industry has seen the incredible revenue potential that small businesses can generate and have been working overtime to create tools and ad models that work for businesses of all sizes. While most people think that large brands are the largest drivers of ad revenue on social and digital platforms, it is actually a very long tail of small business advertisers that comprise the vast majority of the spend – even including Meta’s $122B in ad revenues.*
Small businesses require the ability to make an impact on their sales with scrappy and well-controlled ad spends. Digital and social platforms have done an incredible job making advertising with them accessible through self-serve tools. These platforms are also appealing to small business advertisers because of their targeting capabilities and creative development tools.
The good news is that the podcast advertising industry has been able to see the successes that the digital platforms have achieved and created an environment that is much more small business friendly because of a few major podcasting trends and innovations.
There is no shortage of content. There are over 5 million podcasts globally and over 70 million individual episodes - available in over 150 languages.** As a result, advertiser interest in scooping up this vast amount of inventory has not been limited to current advertisers. In 2022, U.S. podcast ad revenues grew by 26% year-over-year to $1.8 billion. In fact, podcasting continues to be one of the fastest growing digital channels, outpacing the total internet ad market (+11% year-over-year).*** A lot of the growth in the podcast advertising category can be attributed to the unique relationship that listeners have with the medium. Podcast listeners are hand raisers and leaned into the content unlike social media users who are often passively scrolling through their feed.
So why is all this additional inventory advantageous for small businesses? More inventory means that there are more opportunities to capture the undivided attention of your prospective customers and there is literally a podcast for any and every person that you want to reach. Podcast advertising can be more effective than social media for generating demand and for small businesses who want to make sure that the next dollar they invest is the most effective it can be - ensuring a positive ROAS is much easier when they are not forced to buy high priced inventory within a handful of premium shows. That is why this long tail inventory can deliver the reach and results that small businesses need to boost their bottom line.
More Precise Targeting
With advances in podcast buying technology, a brand can now target a specific audience demographic, geography, time of day or specific interests/affinities with their ads. These ads are pre-produced and can be served to specific audiences in any podcast inventory that meets their targeting criteria. This buying method is called programmatic or audience-based buying. There is more inventory than ever before that allows for ads to be bought this way. One of the reasons that this is such great news for small businesses is because audience-based buying mitigates wasted impressions since you are only buying the shows that will reach your specific audience. It also allows for low-risk testing - a small business can pre-produce a few spots and see which ads and shows perform best for their business. Some of the testing parameters could include:
- Different messages or offers by audience
- Highly local targeting to drive foot traffic
- Time of day or Day of week testing
- Seasonality or limited time offers
Once a new advertiser has generated some key learnings from an initial set of tests, they can also very easily scale their investment. Precision targeting provides small businesses with the control and optimization capabilities that are on par with social and digital platforms.
Scaling the Tail
At Ad Results Media, we believe that there is a great deal of opportunity for small businesses and small podcast creators to grow their businesses and brands together - as partners. People are more likely to consider purchasing a brand that they hear about on podcasts than those exposed to ads on YouTube, Social Media, TV or Radio.**** This is largely true because of the high degree of trust and personal connections that podcast listeners have with the hosts of their favorite shows. These are the same type of very personal relationships that consumers have with small businesses. We work to develop partnerships between our small business clients and podcasters of all sizes to foster mutual growth.
According to Ad Results Media’s VP of Media, Gretchen Smith, “There is huge upside for small businesses looking to expand or optimize their overall media mix with podcast advertising. We know that podcast advertising is one of the most trusted and persuasive forms of delivering a brand’s message – and now it is accessible and affordable to businesses of all sizes.”
The team at Ad Results Media is looking forward to helping clients of all business categories and sizes drive results with podcast advertising. Reach out to our team today to learn how we can help your business grow with audio advertising.
*** IAB U.S. Podcast Advertising Revenue study, 2023.
****Sounds Profitable, The Medium Moves the Message, 2023.