All talk, no show: why are podcasts struggling to attract advertisers?

Once touted as the next big thing in audio, podcasts have struggled to attract any substantial amount of advertisers since the medium gained pace. 

For an avid social media user, podcasts have found a place in their online experience, in one form or the other. The algorithm has crafted a way to place clips from popular podcasts from across the world, on everybody’s short-form video feed, distributed across the networking platforms. 

Globally, the interest in podcasts has grown significantly over the past few years. The current consumer count of podcasts stands at 464.7 million in 2023, from 332.2 million in 2020, as per multiple industry reports. However, the space is riddled with roadblocks that the platforms are still navigating through.

A few days ago, audio streaming platform Spotify announced that it laid off roughly 200 employees from its podcast division. Interestingly,  Daniel Ek, CEO of Spotify, had previously told CNBC that podcasts are the future of the company’s revenue stream, prompting over a billion-dollar investment into the medium since 2019.

Despite the strong growth projections, revenue generation and advertiser interest in the medium are still something that marketers aren’t entirely excited about. In India, brand association in podcasts is not a common sight. Only recently, fashion brand AJIO became the title sponsor of the popular 'The Ranveer Show' podcast. 

Also Read: Why fashion brand AJIO came on board as brand partner for Ranveer Allahbadia’s podcast

Sudish Balan, co-founder & Chief Creative Officer, Tonic Worldwide, in a consulting role, wouldn't recommend podcasts to his clientele, and is instead gauging how the medium gains relevance in India. 

"The expectation was that podcasts will be the next big thing in content. But it's not picked up the way it should have picked up. From a marketing perspective, podcasts won't give you instant results. Brand placements are relatively easier within other formats of content than it is with podcasts," he says.

Podcast is a very niche medium for marketers, he suggests. It can be leveraged only when a particular podcast holds influence on audiences in a particular category. Further, in order to effectively reach the audience, the marketing initiative needs to be sharper.

The market for podcasts in India has bloomed fairly late in terms of listenership. In December 2022, a survey conducted by IVM podcasts in association with InMobi Pulse and InMobi group-owned Glance found out that about 81 percent of Indians who interact with audio streaming platforms heard their first podcast only in 2022.

However the agency has also witnessed a spike in brand interest in the medium though. They share with afaqs! that many companies operating in the corporate sector are taking some interest in podcasts. Senior leaderships in many of such corporate houses are developing podcasting. However, the medium is yet to evolve in a way where popular brands would delve into associations.

Popular Indian-origin podcast networks that afaqs! spoke with are also dealing with a dearth of advertiser interest in the medium. However, there might be some light at the end of the tunnel. Amit Doshi, Head, IVM Podcasts- Pratilipi says attracting brand interest for podcasts has been tough in India, but it is growing as more brands come into the space.

“We have seen a steady growth in both listenership and brands in the space. I think the need of the hour is to educate brands about how podcasts can enhance their communications, and that has been a slow and steady process, which is starting to bear fruit now. Marketers need to spend the time to understand the medium and get a sense of what the medium can and cannot do,” he says.

Gautam Raj Anand, founder and CEO, Hubhopper, believes that there is a noticeable shift in brand interest in podcasts, of late. He believes that while the Indian podcasting industry has a considerable audience base, the presence of brands is not as prominent as in top international podcasts due to its nascency by global standards.

If leveraged efficiently, podcasts as a medium foster deep connection and deliver immersive experiences. The revenue potential for podcasting companies from brand advertisers is significant and relies on strategic brand collaborations and targeted advertising placements, as per Anand.

“Entrepreneurs utilise podcasts to differentiate their product offerings and garner consumer recall, while larger organizations leverage the medium to disseminate their cultural ethos, position themselves as thought leaders, and forge deep emotional connections with their audience,” he says. 

Deepak Gopalakrishnan, also known as Chuck, who is the co-host of 'Simblified' podcast, points out that the brand incentives within the podcast space aren't limited to advertising. "The brands are also showing interest in creating their own podcasts, or getting their top executives on popular shows as a means of promotion."

While the segment has seen considerable success globally, Chuck opines that the comparisons with Indian market aren't conclusive. He says, "Being associated with IVM, I've seen brands from different categories such as fintech, D2C, among others showing interest in the space. There is a fair bit of interest, and the segment is growing at its own pace. India is not the West where people are more podcast friendly."