5 Podcast Predictions Shaping the Future of Digital Audio in 2023

Audio advertising is really taking off in the US. Podcast ad spend will surpass $2 billion in 2023, according to the IAB.

Currently, podcasts account for nearly one-third of digital audio ad spend, and that projection will increase over time. 

We spoke with some ad tech professionals in the podcasting world about their 2023 predictions. One thing we can expect for sure is more programmatic ads. 

Capabilities and offerings within podcasts are growing, allowing for more monetization and opportunities like programmatic audio, shared Lucy Ford, Director of Ad Operations, Slate Magazine, during a podcast monetization breakout session at Publisher Forum Nashville. However, concerns about ad quality and filtering out bad programmatic ads still need to be addressed. 

As the sector continues to grow, podcast ad professionals have also learned through trial and error that podcasting measurement, data tracking, and technology are still in their infancy. See what the media experts had to say for all those wondering what’s to come in 2023 for podcasts.

More Listeners Shift From Terrestrial Radio to Digital Alternatives 

Many media experts agree that listeners will continue to shift to digital formats. 70% of media experts see this happening, according to IAS.

One reason for this widespread shift is the growing mistrust of media outlets. Consumers are rethinking their media sources as fake news continues to fly around the open web at breakneck speeds. Placing empathy and transparency at the core of their messaging, brands need to hone in on building trust with their audiences. In the era of constant multitasking, podcasts reap the benefits because people are always looking for something to listen to simultaneously.

Laura Connell, Senior Trends Manager at GWI

“Since last year, the number of US consumers who trust the media fell by 14%. Forty-five percent of Americans say they have no trust in social media companies, up 8% from Q2 2020. Meanwhile, over half of Americans reported listening to music, podcasts, audiobooks, or talk radio to help them relax, and over one in three say it helps relieve stress and anxiety. Ninety-two percent of consumers listen to audio content in a given week, so brands have a huge opportunity to engage with listeners. Millennials spend more time daily listening to broadcast radio than baby boomers do — so the format still has a strong following. Even children are listening to podcasts at an increased rate, with an 11% rise in the past year among Generation Alpha.”

“Consumers of all ages now spend more time listening to podcasts than they did in 2020, with Gen Z (+5 minutes) leading the way and brand discovery via ads on the radio and music streaming ticking upward since this time two years ago. In Q4 2021, 18% of US podcast and music streaming listeners discovered new products/ brands via podcasts. Hosts can cater ads to their style, which consumers in eight markets prefer.”

Videocasts on Youtube Will Continue to Be a Thing

For the past five years, podcasters have been uploading their content to YouTube, and this trend will only continue to take off. During Advertising Week NY this past October, Donald Albright, President and Co-founder of Tenderfoot TV, talked about  how posting clips of your show on YouTube helps with marketing. However, having the entire RSS feed in two different places can become counterproductive. 

Grant Durando, Director at Right Side Up

“The number of creators uploading their podcast to YouTube will “reach critical disruptive mass” in 2023. This can spark a new need for attribution solutions. The industry has largely addressed tracking campaigns in RSS feeds “via pixel and prefix-based attribution,” but as more podcast engagement comes from YouTube, we will need a new technological solution to deliver conclusive performance marketing attribution.”

Conal Byrne, CEO at iHeartMedia Digital Audio Group 

“So — should podcasts become videos? Capturing the recording session of a podcast for video may serve certain creators well. But, overall, this will anchor the medium back into video’s rules of fast, cheap, and good. Moreover, and maybe counterintuitively, the video won’t hold a candle to the audio podcast’s intimacy, engagement, and innovative qualities. This medium’s creative freedom and mass reach, its ability to slip into our media consumption in the places that video couldn’t and can’t fill, is still today unrivaled.”

Audio Buying Will Accelerate in a Saturated AVOD Market

While on the go and staying home, people stream audio all day. With quality content, precise targeting, and a large market, audio is the medium that most budget-conscious consumers choose. They want entertainment without being dependent on subscription services.

Sixty-two percent of media experts say ad-supported digital audio streaming will expand to match adoption rates among consumers in 2023, according to the IAS. And 61% think ad-supported digital audio streaming will become more popular among consumers. 

Also, many professionals are purchasing audio and voice-assisted devices these days. A quarter of media experts are expected to prioritize investments in smart speakers as they are the new, shiny object for advertising. One-third of consumers are more likely to consider a purchase from a brand after hearing its ad on a smart speaker.

Michelle Swanston, VP Data Marketplace, Media & Entertainment Vertical, TransUnion

“According to The Infinite Dial Edison Research Report, 60% of all US homes have two or more smart speakers. Innovative advertisers can look to streaming audio as it provides a unique marketing platform that combines the quality content of radio with the precise audience targeting, dynamic messaging, and outcome-based analytics of digital.”

A Rise of Programmatic Advertising in Audio 

Trending with the upward tick of ad spend on podcasts in the US, programmatic podcast ad spending will make up an increasing portion of total podcast ad spending, reaching nearly 10% by 2024, according to eMarketer.

We will only see more programmatic ads in 2023, considering people can consume them alongside other media, says Connell from GWI. “We’re likely to see major players in the audio-streaming industry expand their offerings – like Spotify, which now offers audiobooks alongside music and podcasts,” she added.

Stephanie Donovan, Global head of revenue at Triton Digital 

“Ad spend via programmatic exchanges will grow significantly as brands aim to reach an engaged, mobile audience. The volume and publisher CPM rates for podcasting will continue to rise in 2023, with programmatic podcast advertising again leading all other audio channels. We’ll see dynamic ad insertion (DAI) continue to steal the spotlight from baked-in ads, building upon 2022 momentum.”

Endless Opportunities to Engage New Audiences  

The podcasting industry is growing into a diverse space. In an email to AdMonsters, Byrne from iHeart pointed out that in 2023 podcasting will continue to expand into a mix of creator-host-read advertising combined with mass, longtail podcast inventory that is audience-segmented and targetable. 

Publishers are really starting to see how podcasts provide an opportunity for growing and diversifying revenue streams. The podcast listener boom has not only impacted advertiser spend, but the number of podcast advertisers grew by 42% in the US, which is expected to increase significantly in 2023. 

Consumers might be downsizing their subscriptions in other areas, but podcast subscriptions are taking off. Many publishers are capitalizing on this trend and are offering audio versions of their stories and other news-driven audio content. And they’re using these audio offerings to convert listeners to paid content subscribers. Some pubs have also been successful with premium podcasts. Maybe it’s time you get into podcasting too.