Podcasts are earning their ad stripes

Podcast and digital audio advertising spend is forecast to grow in 2024, new research has found. Some brands are also opting to “own” slices of the media market.

Adore Beauty's podcast is part of a broader content mix as part of the company’s evolution as its own "media" brand

Advertising in digital audio and podcasts is continuing its rise as one of the fastest growing allocations of media spend in Australia. Advertising spend in this slice of the industry is expected to increase further in 2024, according to peak online advertising association IAB Australia’s new Audio State of the Nation Report.

The report found that the vast majority of brands are using digital audio and podcast advertising to connect with audiences, with 87 per cent using streaming audio and 80 per cent using ­podcast ­advertising to increase brand awareness.

According to the new research, 90 per cent of media agencies have used audio advertising this year.

Streaming digital audio advertising is also a regular part of brand marketing activities, 83 per cent of agencies have said, and investment in streaming audio and podcasts is expected to increase in 2024 by 61 per cent and 64 per cent respectively.

It comes as IAB recorded $14.7bn in online advertising spend in 2023, a number that represented a slowdown in growth with some signs of resilience, down to 3.7 per cent from 9.1 per cent reported in 2022, according to an expenditure report released in February.

Of the general display advertising slice of the pie, spend was up 3.9 per cent year-on-year. Podcasts were one of the category’s star ­performers, with advertising spend on the channel hitting almost $100m and representing growth of 21.7 per cent.

True-crime podcasts have also emerged as particularly effective environments for advertisers, new neuroscience-backed research from IAB also revealed last week.

It said listeners of true-crime podcasts approach the content with a mindset of curiosity, learning and problem solving when they tune in.

Advertisements placed within true-crime podcasts, therefore, can increase brand memorability and influence consumer decision-making, especially when the advertising creative also matches the mood and mindset of listeners.

A growing number of brands are also investing in owning their own podcast series entirely. Some brands are doing so either through partnering with digital news media brands, or via their own platforms.

Adore Beauty keeps the conversation real
ASX-listed online beauty retailer Adore Beauty launched its Beauty IQ Uncensored podcast in 2019, and it has since consistently ranked in the top five beauty podcasts on Apple.

The podcast tackles taboo beauty topics in a highly conversational tone, with a “no topic is off-limits” approach.

The podcast has been downloaded 6.7 million times as of December 2023 and forms part of the retailer’s broader content and marketing play to become a media brand in its own right, which includes content on its website and mobile app, plus Facebook, YouTube and TikTok channels. Not only does Adore Beauty “own” its own podcast, it is also selling advertising spots on the channel.

The company’s half-year FY24 financial results released last week offered a window into a small but growing slice of the company’s overall revenue of $100.7m, which grew by 7 per cent. The nascent category appeared on its results presentation as part of “other revenue”, which includes retail media and other advertising revenue.

The category generated $2m in revenue, which has more than doubled since its prior results (half-year FY23), and includes revenue from brands that are purchasing advertising space across Adore Beauty’s channels, including the podcast.

Dan Ferguson is the chief marketing officer at Adore Beauty. Aaron Francis / The Australian

Adore Beauty chief marketing officer Dan Ferguson explained that its goal stems back to part of the company’s original mission: “To avoid that graveyard of products on the bottom of your bathroom shelf”. The content that the company produces, he said, “is about helping our customers choose”.

He said that products that it mentions in its digital content can often drive sales. However, he has some words of caution.

“The challenge as a retailer is not to get carried away with the commercial benefits. It’s almost like a double edged sword,” he said.

“If you focus only on the commercial benefits, you’ll forget that you’re actually making media.

“And we are not competing against Mecca or Sephora or David Jones or Myer in that media. They can release their own podcasts by all means, but we’re not competing with them.

“We’re competing with TikTok, Mamamia, and Shameless and those guys are fantastic at what they do. They make compelling content. And if we’re going to have a hope of our audience giving us their time, it needs to compete against that at the very least.”

CommSec targets young investors 
Content has been at the heart of growing digital trading platform CommSec’s brand and audience over the past 25 years, and it is also among a wave of companies growing their podcast presence.

It launched a nine-episode podcast titled CommSec Invest in January in partnership with audio streaming platform Listnr as part of its goal to reach young investors.

CommSec Invest builds on the company’s existing audio ­presence with its Market Update podcast.

CommSec’s managing director Richard Burns told The Growth Agenda that its investment in its podcast is part of a long-term play to reach new audiences.

“As a market leader, content and education has really been a key cornerstone of who CommSec is,” he said. “And this is just another way for us to help prospective new investors really ensure that they’re getting started in the best possible way.”

He said young audiences face barriers to investing, and that trend is likely to continue in the long-term.

“I think in five or 10 years, many customers will still feel it’s either too complicated, or ‘I don’t know what to invest in’, or ‘I’m worried about losing money’. I don’t think that’s going to change. So this is more around how to make the content really contemporary and really reach the ­audience at the right time in the right place.”