The world’s biggest podcast platform is focusing on making ads easier to buy, its chief executive revealed amid plans to scale back on content acquisitions and improve its bottom line.
In its latest quarterly results, Ross Adams, Acast CEO, said it would “reallocate resources” from acquiring new shows in bulk to expanding ad sales in its existing portfolio of 92,000 podcasts.
This would make it easy to buy podcast ads, he said, and also increase Acast’s revenue at a lower cost.
Adams said “a key strategic move” for the global independent podcast platform to achieve this was to develop scalable tools to help advertisers of any size of budget reach relevant and engaged podcast listeners.
Some examples of these tools are Acast’s self-serve ad platform, and its Keyword targeting tools (part of its contextual advertising offering), which were both launched in Q4 2022.
In addition, Acast is eyeing “continued positive development” in automating buying and selling podcast spots through programmatic ad sales. By the end of 2022, programmatic sales made up 13% of total revenue, up from 10% the previous year.
Adams highlighted the podcast platform experienced 35% organic growth in Q4 2022 compared to Q4 2021, while the average advertising spend per advertiser on the Acast Marketplace increased by 46% year-on-year.
He also mentioned “diversifying monetisation routes”, namely its agreement with Amazon Music which delivers podcasts ad-free to Amazon Prime members and Amazon Music Unlimited subscribers. Amazon has “effectively purchased all the ad slots” in these podcasts on the Amazon Music app, which improves Acast’s sell-through rate on its Acast Marketplace inventory “without requiring further manual resources.”
These strategies mark a shift away from the company’s previous focus on cutting costs as the company laid off 15% of its workforce last year.
Adams said these cost reductions were “now complete” and that Acast would enter 2023 with “a solid foundation to continue developing Acast as a global independent market leader in revenue creation for podcasts.”
However, he noted the impact of economic uncertainty on certain advertisers and their decisions around their spend.
“We are seeing many advertisers move from successfully testing a medium, that is new to them, to now capitalizing on this established, incredibly interesting channel by investing larger and larger advertising budgets into our podcasts,” Adams said.
“This is an important trend for the long-term positive development of podcasts as an advertising medium. At the same time, a weaker economy means that more advertisers are more cautious than before, which has a countervailing effect in the short term.”
There is also an increasing importance given to proven return-on-investment to optimise ad investments
Adams explained: “Campaigns that show good, measurable conversion become more important than more holistic brand-building efforts. This development benefits us as a marketing channel in the long term, as performance marketing returns from podcasting tend to surpass traditional media such as TV and radio.”
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