Podcasts

Which brands will be the big podcast ad spenders of 2023?

Data indicates some big-box retailers are moving into the space, while some say certain DTC brands might be moving out.
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Athima Tongloom/Getty Images

· 5 min read

Podcast industry execs have big expectations for 2023. More programmatic inventory. Better measurement services. Continued crossover between podcasts and video content. The list goes on, but even if these predictions come to fruition, there’s no guarantee that they’ll have an impact on brands’ podcast ad budgets.

The industry is on track to do more than $4 billion in ad revenue in the US by 2024, but the IAB made that prediction before the summer brought talks of a recession and before a round of media layoffs from which audio companies were not spared. Still, companies like SiriusXM and iHeartMedia continued to report growth in podcast revenue for Q2 and Q3, and audio ad buyers remained optimistic about podcast advertising heading into Q4, even as the industry shows signs of slowing on the whole.

Podcast execs are still bullish that more brands, potentially even larger ones, will find their way into the medium this year:

  • “Listen for more household names aligning with brand-safe content to reach the ears of their key customers,” Jessica Cordova Kramer, CEO and co-founder of Lemonada Media, told us.
  • “We’re going to continue to see large, global brands spend in audio,” Shira Atkins, co-founder and CRO of Wonder Media Network, said.
  • “I think more brands will look to align with podcasts in order to reach a valuable and engaged audience who are light consumers of traditional media,” Gina Garrubbo, president and CEO of National Public Media, NPR’s exclusive sponsorship arm, said.

Data from podcast media planning platform Magellan AI shows that categories like retail and finance are spending more money on podcast ads, even as several execs we spoke to said that some of the DTC brands historically associated with the space could be pulling back.

New blood

Some big-box retailers have put down roots in podcasting. Magellan AI estimated that retailers spent 136% more on podcast ads from January through October last year than they did during that time in 2021, up from about $22.2 million to about $52.5 million.

The top retail advertisers of the year were Amazon, Macy’s, and Walmart, according to Magellan AI data. Macy’s spent an estimated $1 million on podcast ads from January through October 2021, increasing to about $3.5 million during that time last year, Magellan AI co-founder Cameron Hendrix told Marketing Brew. Macy’s did not respond to a request from Marketing Brew to confirm those numbers.

The financial services category—including brands like Capital One and Intuit—was also “pretty active” in podcasting in 2021, he added, having increased its estimated spend by 61% in 2022, up to $176.5 million from $109.6 million, according to Magellan AI data.

Both categories are indicative of a larger trend: Advertisers, especially big-box brands, often test podcast ads for a year, then “tend to come back,” creating a “pattern” of increased spend, Hendrix said.

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“If past performance is any indicator, I have no reason to believe that they would necessarily slow down,” he told Marketing Brew.

Furthermore, overall ad spend increased on shows in 25 out of the 40 genres tracked by Magellan AI, compared to decreases on shows in 11 genres and relatively no change in four genres, according to Hendrix. Spend increased in 19 of the 20 largest podcast genres.

Food and beverage companies “will start to show more interest” in podcasting this year,  Adam McNeil, VP of marketing at podcast ad agency Adopter Media, predicted. Simulcasts could be particularly attractive to brands in that category because they can present opportunities for product placement, he added.

The old guard

Of Magellan AI’s top three retail spenders, only Amazon made the company’s list of the top 10 podcast ad spenders overall, with an estimated $26 million in spend from January through October, though Amazon did not respond to a request for confirmation from Marketing Brew. The top-10 list does, however, include several DTC brands like HelloFresh, Athletic Greens, and SimpliSafe.

“We’re definitely seeing continued investment for some of those brands that have been in the podcast space for a while and are DTC,” Hendrix told Marketing Brew, with “no signs of pulling back from any of those brands.”

Others in the industry think that could change this year. Dan Granger, founder and CEO of audio ad agency Oxford Road, predicted that the DTC “brands who built the industry…will pull back on campaigns while more established, traditional businesses move in.” Rob Deichert, CRO of audio-streaming service TuneIn, echoed that sentiment, saying that he expects ad revenue from DTC brands, which has historically been responsible for “kind of propping up podcasts,” could start “drying up.”

“From a pure speculation and observational point of view…BetterHelp, Manscaped, and Athletic Greens can’t possibly keep up this clip much longer,” Glenn Rubenstein, founder and CEO of podcast agency Adopter Media, said. “We have long-term brands that have been in the space for three to five years, and they’re starting to see a little bit of diminishing returns due to saturation [and] increased prices.”

Adopter has helped 16 new clients begin podcast advertising in the last four months, though, “and they’re all doing really well,” Rubenstein said.

That’s a natural progression, he explained. Companies that once felt ubiquitous in podcast advertising, like Casper, Blue Apron, and Squarespace, seem to appear less and less, and other DTC brands have taken their place. The same could happen with the current generation of DTC podcast advertisers.

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