Podcast Hosts Are Set to Make Millions Off of Advertisements
- From 2019 to 2020, the number of people who listened to podcasts increased from 51% to 55% of the U.S. population.
- Due to the increase in popularity, advertising has increased in this up-and-coming industry as companies want to have the best deal possible with content creators that have the most influence.
- This industry’s significant hype has led to some companies acquiring existing podcasts to receive additional revenue.
Similar to the era when newspapers, magazines, television, and radio were at their peak popularity, podcasts are slowly becoming one of the more popular streaming services. Over the past couple of years, the total number of podcast creators and listeners has been steadily increasing, which has caught the attention of major corporations. In addition, due to its rising popularity, it has resulted in more advertising campaigns surrounding these product services.
Many people listen to podcasts for several reasons, such as learning new information, entertainment, and inspiration. Subsequently, podcasts have become increasingly popular in the past few years. For example, in 2019, 51% of the United States population (143 million) regularly listened to podcasts. In 2020, there was an increase of 4% to 55% of the total population (155 million) regularly listening to podcasts, showcasing their increasing popularity.
As a result of this increase, most 21st century advertisements have been focused on podcasts. Companies are trying to construct a marketing agreement with the more prominent content creators to help with their brand exposure.
The Effect of the Rise in Popularity
As mentioned above, the rise in popularity has caused many types of advertising to be used in these programs. Companies are focusing their marketing campaigns on establishing a deal with a large podcaster, who they know will generate a large volume of listens and exposure to their products.
These deals are made based on CPM, which is the amount of money earned per 1,000 listens, and the larger the podcast, the higher the revenue per 1,000 listens. Consequently, the content creators can charge more money for the ad campaign.
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For example, large podcasts, such as Spotify’s Joe Rogan Experience and Apple Podcasts’ My Favorite Murder, are in the top 10 of the most listened podcasts globally. Thus, if companies wish to ensure maximum exposure to their brand, they are most likely to interact with these brands to strike a deal.
Therefore, due to the large brand deals that have been or will be signed, it allows the content creators to reap the benefits through the CPM generated from their listeners and the ad revenue from corporate sponsorships to retain millions of dollars in revenue.
Large companies are becoming well aware of the hype and popularity of podcasts, which is why some of these companies have either acquired podcasts or signed exclusivity agreements with the creators themselves. For example, Joe Rogan signed a multi-year exclusivity agreement with Spotify for $100 million to keep his show strictly on the music streaming platform.
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Additionally, the New York Times saw the potential in this up-and-coming industry and decided to acquire Serial Productions. The studio used to produce the popular podcast “This American Life.” New York Times generated $36 million in annual revenue in 2020 due to this acquisition, which showcases this industry’s potential.
It is difficult to determine what could be next for this industry in the future. However, due to its growing popularity, it is almost certain that more and more advertising agencies will be looking into entering an agreement with content creators to promote their products.
Therefore, if you have ever wanted to start a podcast, now is the time to do it, as the hype around them will make it much easier for you to receive and retain attention from listeners and corporations.
What are your thoughts on podcast hosts earning money from advertisements? Let us know in the comments below.
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