This week on The Download: Quarterly earnings, more quarterly earnings, Audio is getting its own track at Advertising Week, and Spotify is giving podcasts their own space in its app.
Arielle: Hope you’re ready for some earnings reports, because we’ve got two segments worth of second quarter earnings to go over. First up: the big platforms. Last Wednesday Alyssa Meyers of Marketing Brew posted a roundup of Spotify, SiriusXM and Acast. Things kick off with a silver lining:
“Call it what you want, the ad biz is not looking its best right now. But according to these execs, the growing podcast segment is keeping its head above water.”
Economic uncertainty is undeniably impacting the ad industry. The CEOs of Spotify and SiriusXM both cite ‘macro’ trends as being notably dire but not to podcast ads sales. SiriusXM’s Q2 ad revenue for Pandora and associated platforms reports a 5% year over year increase, reaching 403 million. Spotify posted a 31% year over year gain, earning around 366 million. This time around they neglected to isolate their podcast ad revenue as its own statistic.
Meyers quotes Spotify CFO Paul Vogel as saying they’re experiencing “strong growth on the podcasting side.”
Hosting service Acast has been busy this second quarter, citing new features, a massive increase of podcasts on the platform, and their acquisition of Podchaser as driving factors of their 39% net sales growth. A figure that calculates out to 31 million USD.
While the macro trends are concerning, The Download will never pass up an opportunity to report numbers going up in podcasting. Big or small, names in the industry are increasing ad revenue, and that’s a good thing.
Shreya: Now to cover the Q2 numbers from three large broadcasters: iHeartMedia, Cumulus Media, and Audacy. There’s a few dark spots throughout but, interestingly, their podcast numbers are shining beacons of hope in all three reports.
Overall iHeartMedia reports an 11% year over year increase, despite, in the words of company president Rich Bressler: “the uncertain economic environment.” Podcast revenue is up to 86 million, a 60% year over year increase.
Meanwhile, Cumulus Media joined the macro club during president Mary Berner’s opening statement:
“Despite the challenging macro environment, we increased revenue in the quarter by
more than 5%, driven by our digital businesses whose growth accelerated in Q2 to 20% year-over-year.”
Podcasting made Cumulus around 15 million this last quarter, up 27% year over year. All told, podcasting accounts for 6% of the company’s revenue. Not too shabby.
“After a very strong first quarter in which we grew revenues by 14% and significantly increased margin, our second quarter results were adversely impacted by declining macroeconomic conditions and ad market headwinds which reduced our top line growth to 5%.”
The company made a nice $69m from “digital,” which includes podcasting, and is up 18% year over year. Podcast downloads grew 40% year-over-year. Revenue from podcasts is supposedly in the upper teens of percentage growth, but Audacy didn’t give specifics. Even with the ad market headwinds it seems podcasting is doing well for them.
Arielle: Wednesday of last week was a busy day for Alyssa Meyers, as we cover her second article of the day: “Audio gets its own track at this year’s Advertising Week.”
Advertising Week’s head of podcasting Richard Larsson told Marketing Brew,
“The rise of audio throughout the pandemic, coupled with Advertising Week’s efforts to build its own podcast network, culminated in the decision to give audio a more official spot on the agenda this October.”
Audio representation continues with one of - if not the - longest-running podcast awards ceremony. Yesterday the People’s Choice Podcast Awards announced the nominees for their 17th annual session. The substantive list of nominees can be found on the Podcast Awards website.
Continuing the award theme with one more bit of news: on Monday the newest issue of Adweek dropped with the winners to the 2022 Adweek Podcast of the Year Awards. The full list of winners can be found in the official Adweek post by Kennyatta Collins.
Shreya: Podcasts and music are taking a break from each other soon on Spotify, according to David Pierce’s article for The Verge, posted this Tuesday.
“Spotify has been working on a new design for its home tab that will create separate feeds for your music and your podcasts. The company says it’s part of an effort to give you more and better recommendations, but it also addresses a common criticism of the Spotify experience: with every kind of audio smushed together in the app, it can sometimes be hard to figure out.”
The new layout creates a bar at the top of the app delineating whether the user is in the Music area or one called Podcasts & Shows. Music will continue to feature new suggestions for songs and albums along with recently-listened tracks while Podcasts & Shows gets rid of music and purely focuses on new episodes of subscribed podcasts and recommendations for shows Spotify believes the user will enjoy.
Pierce offers the comparison:
“They’re not so much new home screens as new filters for your home screen. (I’d rather just have them be separate tabs altogether, but I’ll take what I can get.)”
An app redesign with a dedicated area for podcasting provides more opportunities for promotion. Podcast promotion and growth of audience is one of the hottest topics in podcasting.
Spotify providing more of those opportunities for ads in a way that doesn’t step on music-based ads is a big deal. Promotion opportunities are a big enough deal that Dan Misener and Jonas Woost of Pacific Content have left to form Bumper, an agency dedicated solely to promotion.
Arielle: Finally, it’s time for our semi-regular roundup of articles we’re calling Quick Hits. These are articles that didn’t quite make the cut for today’s episode, but are still worth including in your weekend reading. This week’s three great reads are:
Fundamentals of Programmatic Advertising by Evelyn Mitchell. A quick read with a helpful infographic that makes a great introduction for those not familiar with programmatic, as well as those in need of a refresher.
DoubleVerify Grows Q2 Revenue By Expanding Brand Safety To Retail Media, TikTok And Gaming by Alyssa Boyle. Notable in its absence is any entrance into podcasting. Meanwhile IAS, a direct competitor of DoubleVerify, is the brand safety service for Spotify. DoubleVerify not expanding into audio over these other verticals suggests that the IAS and Spotify relationship is more driven by Spotify looking to tend their walled garden. Perhaps the move was more motivated by Spotify themselves rather than actual advertiser demand to have a brand safety partner.
Finally, some self-promotion: Sounds Profitable’s latest research project will debut Tuesday, August 23rd during the Sounds Profitable Business Summit. The Summit, as covered in a previous episode of The Download, will take place in Dallas, Texas during the opening day of Podcast Movement. The “After These Messages” study will present a definitive take on the impact of live host-read ads, scripted ads, and announcer-read spots. This study was designed by podcast and research industry veteran Tom Webster, in partnership with Edison Research, and will be seen as an important new resource for publishers and brands. Don’t miss it.
Arielle: And that was The Download, from Sounds Profitable! I know we went through these fast, so be sure to check out the links to every article mentioned, right in your podcast listening app, or on SoundsProfitable.com/TheDownload. And thank you for sticking with us as we bring you the top stories you might have missed from the past week. I'm Arielle Nissenblatt.
Shreya : And I'm Shreya Sharma. Our producers are Bryan Barletta and Tom Webster. Special thanks to Gavin Gaddis for writing today's script, and to Omny Studio for hosting The Download. And thanks to you for joining us.
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