The Interactive Advertising Bureau recently released a research report written by PricewaterhouseCoopers. According to the report, in 2023, industries related to the media and entertainment sector were affected due to the overall challenges of the U.S. advertising market, with podcast ad revenue growing by only 5% to $1.9 billion. Compared with the 26% increase in 2022 and the 72% increase in 2021, the decline is significant. Due to the slowdown in growth, podcast ad revenue growth was slower than the 7.3% increase in digital advertising as a whole, which is the opposite of what was the case in previous years.
Only a handful of podcast companies have been able to maintain their previous growth rates, but quite a few mid-sized companies have lost money, dragging down the growth of the industry as a whole. In the context of a declining market, well-known podcast companies such as Spotify and Audacy have taken measures to lay off employees and cut their programming schedules.
In the U.S. podcast industry in 2023, comedy podcasts account for the largest share of the industry's total revenue, at 17%, up from 14% in the previous year. Comedy podcasts are the most listened to podcast genre in the United States. In the fourth quarter of 2023, 268 new advertisers were added to the genre. Meanwhile, comedy and sports podcasts led the industry in terms of listeners for the second year in a row.
Although the growth rate of advertising revenue in the podcast industry has slowed significantly in 2023, industry analysts expect the industry to rebound to some extent in 2024, with advertising revenue expected to grow by 12% to more than $2 billion. In the next two years, it will grow by 10% and 8%, respectively. By the end of 2026, the U.S. podcast industry is expected to generate nearly $2.6 billion in ad revenue.
It is worth noting that in 2022, the U.S. Interactive Advertising Bureau predicted that the size of advertising revenue in the podcast industry will increase to about $4 billion in 2025. At that time, ad revenue growth had not slowed, and today's forecasts have been significantly revised downward. The forecast for continued growth in ad revenue in the podcast industry over the next few years is driven by confidence in improved ad measurement and analytics tools, increased adoption of programmatic buying, and additional revenue from video podcasts and live events.
At the end of 2023, Jen Sargent, CEO of podcast company Wondery, and Conal Byrne, CEO of iHeartMedia Digital Audio Group, said in an interview with the media that recently, the daily listening volume of podcasts has been increasing, and the momentum of advertising buying by major national brands is still continuing, and they are optimistic about the development of the industry in 2024.
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