Our top line: Podcasting in the US will cross the $1 billion mark this year, and its ascent will continue. Per our latest forecast, podcast ad spending will exceed $2 billion by 2023. We upgraded our growth estimates due to the 36.8% spike in ad spending during 2020, which will be followed by growth of 38.7% this year and 31.1% in 2022. We previously expected 10.4% growth in 2020.

Driving the update: Podcast advertising in H2 2020 recovered faster than anticipated, audience numbers continued to climb, and digital audio is now a staple in many people’s media diets. Podcasting has also benefited from companies like Spotify, Amazon, iHeartMedia, and others buying and publicizing content studios and ad tech companies alike.

A silent dichotomy: The slew of acquisitions and major moves from top companies has not helped with fragmentation when it comes to advertising in the podcast space. For instance, we estimate that iHeartMedia—which last year brought in more podcast ad revenues than any other company we track—still accounted for only 10.0% of total US podcast ad spending in 2020, with the rest distributed across various creators, publishers, and platforms. Additionally, there’s a quickly appearing dichotomy between platforms focused on building large content libraries to expand reach and those focused on attracting subscribers. According to Conal Byrne, president of the iHeartPodcast Network at iHeartMedia, “There are really two industries underneath this one. There’s the audience industry and the subscription industry. The subscription industry, Luminary, Spotify, etc., is using podcasts as a lead generator to get you to buy something else that’s not a podcast. The audience industry is a very simple business model: Every single thing we make, we will distribute everywhere.”

Looking at podcasting this way can provide some guidance for brands and creators who are seeking an entry point, especially with Spotify’s tear through the podcast world in recent years. However, this is not to pit one option against another, especially given that all podcasts end up being offered across subscription platforms, and Spotify (the most prominent lead-generating platform) reported having 345 million global monthly users at the end of 2020.