Get marketing news you'll actually want to read
Marketing Brew informs marketing pros of the latest on brand strategy, social media, and ad tech via our weekday newsletter, virtual events, marketing conferences, and digital guides.
Audio companies aren’t exempt from the impacts of the current economic uncertainty, but they don’t seem to have taken quite the hit that Meta did in the second quarter.
Both Spotify and SiriusXM reported earnings last week, and both said their advertising revenue increased, noting podcasts as a strong spot. Podcast company Acast followed this week, also reporting net sales growth in Q2.
That being said, the broader pullback in ad spend did come up:
- “For advertising, we did see some softening in trends over the last two weeks of June,” said Spotify CFO Paul Vogel, who noted that while the company still expects growth in Q3, the state of the ad market could mean it’ll be slower than previously anticipated.
- “There is growing uncertainty in the advertising market, where we generate significant revenue with high variable margins,” is how SiriusXM CEO Jennifer Witz put it.
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.
The podcasts are alright: Spotify’s ad revenue was up 31% year over year to 360 million euros (~$366 million).
- Though the company doesn’t break out podcast ad revenue specifically, Vogel said there’s been “strong growth on the podcasting side” and increasing advertiser demand for that inventory.
- CEO Daniel Ek added that “we are seeing, despite a very dire macroenvironment, advertisers take to the format really, really well.”
SiriusXM’s Q2 ad revenue for Pandora and its off-platform segment—which includes ad revenue from non owned-and-operated platforms, like fees from its AdsWizz ad-tech tool—combined saw a 5% year over year increase to $403 million.
- Witz acknowledged that “our advertising business is not immune to the macro trends felt industry wide,” but singled out its podcast ad biz as an area of growth.
- Off-platform advertising on its own, which excludes podcast ads sold for owned-and-operated platforms like Pandora and Stitcher, saw a 50% jump to $119 million.
- “As we scale in podcasting, advertising revenue will continue to contribute to growth in 2022,” said SiriusXM CFO Sean Sullivan.
Acast saw a 39% growth in net sales to 315.8 million Swedish krona, or about $31 million.
- “As the ad market softened, Acast has been investing to strengthen its business model and position,” said CEO Ross Adams.
- During the second quarter, the company rolled out new “conversational targeting capabilities” for advertisers that enable marketers to place ads based on the content of a specific episode, upped the number of shows on its platform to more than 66,000 (up 136% year over year), and announced its acquisition of podcast database Podchaser.
Look ahead: iHeartMedia reports its earnings after the bell on Thursday.