No doubt, podcasting has been nothing but a revolution; they have become a staple in our daily commutes and is available everywhere on the internet. Today, regardless of their size, advertisers pay ample attention to podcast advertising. They are well aware of the vast ROI it offers due to the hyper-targeted audience of podcast shows.

You know Twitter. The blue bird social media makes about a billion-dollar advertising revenue every quarter. No, podcast advertising doesn’t come close. However, there are the direct response advertisers who have made podcasting a home, being their primary revenue source.

However, we see these direct response advertisers being pushed and priced out. Not just that, the industry is in a state of flux in ways more than one. Essentially, all of the goodies that these advertisers love about podcast advertising are fast disappearing.

The Rising Cost of Podcast Advertising

The rise in podcast popularity also has a corresponding increase in podcast advertising costs. At a point, podcasting struggled to attract advertisers willing to pour their marketing budget into the space; the narrative has changed. Advertising spend for podcasts in the United States went from $36.1 million in 2016 to $842 million in 2020, and the figure is expected to bump to $2.4 billion by 2025.

What we are witnessing thus far is the consolidation of the podcast industry. However, this scenario has pushed up the cost of podcast advertising, putting the early adopters at a disadvantage.

The advertisers are witnessing a 100% increase in cost for their chosen podcast shows. This is a result of the acquisition and licensing agreements that are now dominant in the industry; these deals, usually in millions, are the reason for the astronomical increase in advertising cost. The new owners are more interested in reaping from the massive investment over a short period.

Waning Appeal of Podcast Ads

This is the crux of this entire piece; it’s not even the rising cost but the dwindling appeal of podcast ads. In the bid to recoup the investment, more advertisers are packed into the same amount of podcast time. Adverts went from one or nothing to four or five on the same show.

While this might translate to more income for podcasters and the industry, it creates a vacuum. A gap in the relationship between podcasters and direct response advertisers. This relationship helped build up the podcasting advertising revenue before the deep pockets joined the industry.

Before now, the podcasters and their publishers are all out to ensure that you win. However, you are on your own as a brand with the new players. That’s why they pack as many adverts as possible into a single show.

Even for podcasters, the waning appeal due to commercialization is a concern. According to a podcaster, their ad space now sells between 5 to 10 times they were charging before then after signing to a network.

No More Promo Codes

The new crop of podcast advertisers are all about putting their name out there rather than selling any product and service—a massive shift in the marketing landscape of podcast advertising. In the end, dynamic ads, as we’ve come to know it is becoming inconsequential. We are seeing more dynamic ads being inserted into podcast shows.

Despite the increase in dynamic ads insertion, the unique selling point is missing. These ads are not baked into the show. Right now, these ads that appear like testimonials and feedback on podcast shows are fizzling out. Before we had the big boys, this was the sweet spot for the direct response advertisers.

Wrap Up

For many, the status quo is good for the future of the podcast industry. However, for the direct response advertisers, the situation is a cue to look elsewhere for the experience. There are still smaller shows and players ready to accommodate their needs and value propositions.