The Rise of Podcasts and Connected TV: A New Era in Entertainment and Advertising
Podcasts: From Niche Hobby to Mainstream Sensation
When the term podcast first emerged in 2004, it sparked a wave of excitement with the idea that “anyone can be a broadcaster.” Fast forward nearly two decades, and podcasts have evolved from a niche medium into a cultural powerhouse, with modern-day episodes reaching over 60 million homes.
From Gen Z to baby boomers, people of all demographics are tuning in to their favorite podcasts, consuming content on topics as varied as technology, true crime, personal development, and veganism. Major platforms like Spotify, Apple Podcasts, and Google Podcasts have embraced this audio revolution, offering vast libraries of episodes to cater to every interest imaginable.
The popularity of podcasts has also turned them into a goldmine for advertisers. With their ability to foster intimacy and trust between hosts and listeners, podcasts provide a unique platform for brands to deliver highly targeted messages. Whether it’s a host-read endorsement or a strategically placed ad, podcasts offer a way for advertisers to engage an attentive, loyal audience in an authentic and meaningful way.
When and Where Are People Listening?
In 2019, research conducted by CivicScience revealed that one in three Americans aged 13 or older (32%) listen to podcasts daily, while 39% tune in at least weekly. Most people prefer to listen at home (49%), but smartphones play a significant role in podcast consumption, enabling listening in the car (22%), at work (11%), and even while on the move (3%), according to data from Podcast Insights.
While podcasts are an excellent source of entertainment and information, they’re also driving consumer action. The same CivicScience study highlighted that 22% of podcast listeners made a purchase after hearing a podcast ad. For marketers, this translates to a golden opportunity to allocate a substantial portion of their digital ad budget to podcast advertising.
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Types of Ads That Run on Podcasts
Podcast advertising offers a variety of formats to suit different marketing goals. Ads can either be read by the host—providing a more personal touch—or delivered as pre-recorded content, similar to traditional radio ads. However, unlike radio, which bombards listeners with numerous ads, podcasts typically feature fewer than three ads per episode. This integration makes podcast ads feel more natural and valuable to listeners.
Here are the three primary ad placements in podcast episodes:
- Pre-roll: A brief 15-second ad at the beginning of the podcast.
- Mid-roll: A more detailed 60-second ad placed mid-episode.
- Outro: A final call-to-action during the closing words of the podcast.
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Why Podcast Advertising Works
The Interactive Advertising Bureau (IAB) reported that podcast advertising revenue neared $678 million in 2018, with projections exceeding $1 billion by 2021. What makes podcast advertising so effective?
- High Purchase Intent: Podcast listeners frequently buy products featured in ads, driven by trust in their favorite hosts.
- Enhanced Engagement: Podcasts cultivate loyal audiences who are highly receptive to the host’s endorsements.
The secret lies in the unique connection podcasts foster. Listeners trust their hosts and are often open to products or services the hosts personally endorse. This level of trust, combined with an intimate and engaging medium, makes podcasts one of the most effective advertising channels available today.
Types of ads that run on podcasts. With podcasting, there are a few different ways to advertise. Ad content can be read by the host during the podcast, or ads can be delivered to the podcaster intact, like with radio advertising. However, unlike radio, where listeners are spammed with multiple ads throughout the broadcast, podcasts generally have fewer than three ads per episode, weaving them into podcast content more naturally, making them intrinsically more valuable. Basically, there 3 places to showcase an ad during a podcast.
- Pre-roll (15 seconds at the beginning of a podcast)
- Mid-roll (60 seconds in the middle of a podcast)
- Outro (during the last few words of a podcast, as a final call to action)
Why podcast advertising works. The Interactive Advertising Bureau estimates revenue from podcast advertising last year approached $678 million. By 2021, they’re projecting this amount will break $1 billion. Why do podcasts deliver effective results?
- Listeners buy products from podcast ads
- Podcasts drive engagement
It’s simple really. Podcasts are engaging mediums for delivering messages. People trust their host and are generally receptive to the ads he or she personally decides to endorse.
What About Measurement?
With podcast ad revenue reaching new heights, platforms are stepping up to offer marketers advanced measurement tools. In early 2020, Spotify introduced its groundbreaking ‘streaming ad insertion’ technology, enabling advertisers to access critical data such as ad impressions, frequency, and reach. This technology also provides anonymous audience insights, giving brands a clearer understanding of who is listening. For the first time, advertisers can layer audience data with podcast advertising, creating unprecedented opportunities for targeted campaigns.
Meet Connected TV: The “Cool” Kid on the Block
Connected TV (CTV) is making waves in the digital advertising world. If you’re unfamiliar, CTV refers to a television set connected to the internet, often referred to as a “smart TV.” What sets it apart is the connectivity, which breathes new life into traditional television by granting viewers unlimited access to on-demand content, including favorite movies, sporting events, news programs, and more.
For digital marketers, connected TV represents an exciting frontier. CTV advertising is not only highly targeted but also remains an underutilized tool in many marketing strategies. With its ability to reach specific audiences and deliver engaging, personalized content, CTV advertising is poised to become a cornerstone of modern digital campaigns. Now is the perfect time to take advantage of this rising medium before it becomes saturated.
What is Connected TV Advertising?
Connected TV (CTV) advertising refers to the placement of digital advertisements on connected TV devices, such as smart TVs and internet-enabled televisions. These ads take advantage of the advanced targeting capabilities offered by CTV platforms, reaching viewers as they stream their favorite content.
Currently, three major players dominate the CTV landscape: Hulu, Roku, and YouTube. Together, these platforms account for roughly 70% of display and video ad spending within the CTV ecosystem. As CTV continues to grow in popularity, these platforms are helping advertisers connect with highly engaged audiences in ways traditional TV never could.
Why So Much Advertiser Interest in Connected TV?
The rapid rise of cord-cutters—individuals opting out of traditional cable TV in favor of connected TV (CTV)—is reshaping the advertising landscape. This shift is especially enticing for advertisers seeking a nationally representative, engaged audience. The trend shows no signs of slowing, with eMarketer predicting that CTV ad spend will reach a staggering $14 billion by 2023.
Why Connected TV Advertising Delivers Big Benefits
Connected TV advertising offers an array of advantages that make it a compelling choice for marketers looking to optimize their campaigns. Here’s why integrating CTV into your strategy is worth it:
- Precision targeting: Easily reach the right audience at the right time using geo-targeting, demographics, and other advanced filters.
- No skipping: In-stream video ads require completion before resuming content, ensuring higher view rates.
- Responsive, engaged audiences: Fewer ad repetitions mean less fatigue and greater viewer interest.
- Fast return on investment (ROI): High engagement and completion rates translate to quick and measurable results.
Measuring Success in Connected TV Advertising
While CTV boasts advanced targeting capabilities, measurement is still evolving and lacks a standardized approach. Nevertheless, advertisers are leveraging key metrics to evaluate success effectively:
- Completion Rate: Measures the percentage of viewers who watched the entire ad.
- Cost per Completion Rate: Total campaign spend divided by the number of completed views.
- Brand Awareness: Gauges whether brand recognition improves post-campaign.
Although challenges remain, the potential of CTV advertising is vast, with audiences largely receptive to ads in this medium.
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Steps to a Successful Digital Advertising Campaign
Crafting a smart, impactful digital campaign requires expertise, especially in navigating challenges such as ad fraud and measurement complexities. Despite these hurdles, connected TV and podcasts are leading the charge as two of the fastest-growing channels in advertising. With audiences increasingly turning to on-demand media and digital audio, savvy marketers are directing their ad spend toward these thriving platforms to achieve the best results.
At DashTwo, we are your go-to digital advertising experts. Whether you’re looking to seamlessly integrate connected TV and podcast ads into your strategy or need end-to-end support, we have the experience and insights to help you succeed. From planning and buying to audience targeting and results measurement, we’ll help you build a winning campaign that delivers meaningful outcomes.