Advertising experts, of course, advise that brands keep marketing in the face of economic uncertainty—like the months-long anticipation of a potential recession that has loomed over the summer months.
Not everyone takes that advice, with brands like Microsoft axing entire channels from their marketing plans. Plus, companies like Meta and Snap reported a slowdown in ad spend during Q2.
Podcasting, at least, appears to be safe from the ad budget cuts for now.
“Our clients are certainly not reducing their investments into the space,” Steven Abraham, president of audio ad agency Oxford Road, told Marketing Brew. “If anything, they’re doubling down because they can afford to,” given that podcasting doesn’t have a “high ticket entry.”
Some of the biggest audio companies reported growth in podcast ad revenue for Q2 despite a softening ad market, and buyers responsible for major audio budgets told us they’ve yet to see a significant retreat from podcasting, indicating that the sector could continue growing regardless of the state of the economy.
Status quo
Even so, audio ad buyers are certainly preparing for the possibility of economic-related budget cuts.
Jennifer Laine, head of marketing, innovation, and special projects at Oxford Road, which works with clients including Constellation Brands, Zocdoc, and Quip, said the topic has been “reoccurring” in executive meetings. Jacob Schwartz, associate director for national audio investments at Mediahub, told us he’s fielded questions about potential budget shifts dependent on the economy, but that “no one’s actually really done anything.”
Lisa Jacobs, VP of media at radio and podcast agency Ad Results Media, which counts Molson Coors, FanDuel, and ZipRecruiter as clients, said she’s seen some shifts in her clients’ marketing plans in the past few months, but that things have “pretty much remained status quo.”
The most notable change, according to Jacobs, has been a shift from growth-oriented campaigns to ones that have more to do with performance, as brands “tightened spend” to focus on podcasts that were delivering the highest ROAS [return on ad spend] in order to “weather the storm.”
“That’s the biggest thing we’re seeing…‘How do we restructure our podcast plan or focus in certain areas to make sure that we’re getting the most out of those dollars?’” Jacobs said.
But one of the biggest names in the podcast advertising game hasn’t even gone that far. Athletic Greens has been advertising in podcasts since at least 2017, when CRO Jonathan Corne joined the team, he told us. The company ranked No. 5 on podcast media planning platform Magellan AI’s list of top advertisers in Q2, spending $5.8 million during that time, down from $7 million in Q1.
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Over the years, Corne learned that podcast advertising, unlike paid search or social, is all about “the long game,” he told us.
“So we’re gonna have some podcasters that might not be right in our sweet spot for the performance metrics, but we know that they’re in front of an audience that we feel like are going to take ownership of their health, so we continue to invest there and just assume that there is some sort of branded overflow,” Corne said.
Overall, the threat of a downturn hasn’t impacted its investment in podcasting, he noted. For Athletic Greens, podcast advertising is about finding “that sweet spot between brand and performance,” he added.
No new friends
Major podcast advertisers like Athletic Greens aren’t likely to retreat from the space at the first sign of economic trouble, Jacobs explained.
Abraham said one client—a company in the recruitment space with an advertising budget of hundreds of millions of dollars—even “redeployed” its budget to funnel money from other channels into podcasting, upping its spend from 5% to 8%.
“They’ve said flat out to us, ‘We are taking a pause, we are cutting back, we want to see what happens, but the returns and the attribution we’re seeing on podcasts means it doesn’t matter. It’s not cost-prohibitive enough to warrant us shifting the dollars,’” Abraham said.
That being said, there don’t seem to be any signs that brands just testing the waters of podcast advertising—or those that have never played in the space—will ramp up their spending any time soon.
“The brands that we’ve seen dominate the space are going to continue to dominate the space,” Jacobs told us. “There’s a pretty large discrepancy between those top five to 10 players and the rest of the pack.”
For some brands, audio just isn’t a must-have in their marketing mix. Restaurants, for instance, rely heavily on visuals in their advertisements to entice consumers, Schwartz noted, even though audio buys tend to be more efficient from a cost perspective than video spots.
For others, that efficiency, or “more bang for your buck,” as Abrahams put it, will keep them spending on podcast ads, even if they have to make other cuts to their marketing budgets.
“We’re going to continue keeping our ears close to the ground on the recession and just monitor everything,” Corne said. “We measure and track everything quite meticulously, but at the same time, we are going to play the long game in podcasts.”