IHeartMedia aims to help marketers buy advertising inventory programmatically at a bigger scale with its acquisition of Voxnest, which provides a broad suite of software tools for podcasters. Most internet display advertising has been sold programmatically for several years, and the podcasting market is gradually evolving to give marketers a way to buy ad inventory instead of through direct deals with podcasters.
“The podcast marketplace has been fragmented, with supply and demand spread across multiple platforms – creating scale challenges for marketers who want to buy podcasts,” Bob Pittman, chairman and CEO of iHeartMedia, said in the announcement. “The addition of iHeart’s offerings to Voxnest will ensure critical mass for the platform and accelerate its growth.”
Programmatic ad spending on podcasts in the U.S. will double to $68 million in 2021 from $31.3 million this year, and reach $106.5 million by 2022, researcher eMarketer forecast in July. Programmatic sales buying made up about 1% of total ad revenue in the U.S. podcast market last year, and was little changed from the prior year as most marketers bought ads at an annual or quarterly rate, according to Internet Advertising Bureau (IAB) cited by eMarketer.
The researcher cited several reasons for the slower adoption of programmatic advertising in podcasting, including the lower adoption rate of advertising technology to help automate transactions. EMarketer also said that Apple, which has a popular podcasting platform but is very privacy-focused, has been reluctant to share audience data to help marketers improve targeting. Host-read ads embedded within podcasts are considered more effective by advertisers, while podcasters also prefer host-read ads because of concerns that programmatic ad placements will lower their prices, according to eMarketer.
IHeartMedia’s acquisition of Voxnest may not allay all of those concerns, but podcasters who use its platform may see higher revenue as more podcast inventory is sold in programmatic auctions. Other podcast publishers can continue to use Voxnest’s network to sell advertising.
The expected growth in programmatic advertising in podcasts comes as more advertisers boost spending on the audio format, especially as the targeting capabilities improve. Spending on podcast ads next year will grow 45% to $1.13 billion in the U.S., eMarketer forecast in a separate report. The growth will give podcasts 21% of the U.S. digital radio ad market. Podcasts can boost brand awareness 24% to 79%, or as much as 30 times the lift rates of other media channels such as digital display, print and linear TV, which average about 2.6%, consumer insights company Claritas found in a study.
The expected growth in podcast ad spending has led streaming audio platforms and publishers to invest heavily in the format, especially since more than 100 million people in the U.S. listen to podcasts regularly, according to a study by Edison Research and Triton. Spotify has acquired a variety of podcast companies and licensed popular podcasts like “The Joe Rogan Experience.” The New York Times this year agreed to buy Serial Productions, creator of the popular true-crime podcast “Serial,” to broaden its range of audio programming. Sirius XM, which owns audio streaming company Pandora, agreed to buy the Stitcher podcasting division of E.W. Scripps and acquired podcast technology startup Simplecast to expand support for producers of streamed audio content.
This content was originally published here.