US podcast ad revenues hit record $314 million in 2017

The U.S. podcasting industry had a record year in 2017, reaching $314 million in revenue – a figure that’s up 86 percent from the $169 million in 2016, according to new study out this morning from the Interactive Advertising Bureau (IAB) and jointly conducted by IAB and PwC U.S.

The firms are also estimating podcast revenue will see triple-digit 110 percent growth between 2017 and 2020, when revenues will then reach $659 million.

The study also examined what sort of podcasts were benefiting the most from the increased interest in the audio format, as well as what sort of advertisements were preferred.

As you may have guessed (if you spend any time listening to podcasts), host-read ads were the more heavily used ad type, accounting for a whopping two-thirds of all ads in 2017.

Direct response ads transacted on a cost per thousand basis made up the majority of the campaigns, followed by brand awareness ads at 29 percent.

In terms of placement, ads that were inserted or edited into programming accounted for 58 percent of the ad inventory last year, the report also found.

Top advertisers included financial services (18% share of ads), direct-to-consumer retailers (16%), and arts and entertainment (13% of all ads).

However, certain types of podcasts are doing better than others when in comes to raking in the ad dollars.

In fact, the top four content genres, out of the 14 measured, generated over half the advertising revenue in 2017. These were: Arts & Entertainment (17%), Technology (15%), News/Politics/Current Events (13%), and Business (11%).

IAB has particular insight into the podcasting market, thanks to member companies like Audioboom, Authentic, ESPN Radio, Gimlet Media, How Stuff Works, Market Enginuity, Midroll Media, National Public Media, Panoply, Podcast One, PMM, Turner Podcast Network, Westwood One, WNYC Studios, and Wondery, who underwrote the industry study.

And in case you’re suspicious that an ad bureau claiming ads are doing great, the numbers here back up other industry reports confirming the podcast explosion. Nielsen, for example, claims that half of U.S. households listen to podcasts now, including big consumer groups – like beer buyers or new parents – who advertisers want to target.

ComScore, meanwhile, claims 1 in 5 Americans aged 18-49 listen to podcasts at least once per month.

And podcast startups are benefitting from the increased consumer interest in the format, as well. Wondery, for instance, raised $5 million earlier this year from Greycroft, Lerer Hippeau Ventures and Shari Redstone’s Advancit Capital. At the time of the raise, IAB was forecasting $220 million in podcast ad revenue.

HowStuffWorks also raised $15 million last year, as did Gimlet Media; radio broadcaster Entercom bought 45 percent of podcast producer and network, Dgital Media, home to “Pod Save America.” Podcast platform Anchor raised $10 million in 2017, podcast platform Art19 raised $7.5 million, and, this spring, Castbox raised $13.5 million for its podcast app.

Investors wouldn’t be throwing money at the business if there wasn’t potential for more money to be made. And to some extent, those increased opportunities to reach consumers via audio are attributed to the changes in how we listen to audio content – that is, on mobile devices instead of radio, and on smart speakers in the home.

PwC also credits smart speakers and mobile as contributing to the opportunity here.

“The growing trend toward ‘anywhere and everywhere’ media engagement has created tremendous opportunity for digital media, of which podcasting is a significant component,” said David Silverman, a Partner at PwC U.S.m in a statement about the new report. “Whether at home on a smart speaker, at work on a PC, or somewhere in between on a mobile device, more and more Americans are listening while they live, providing a robust podcast platform where advertisers can connect with today’s consumers,” he said.

Facebook’s new authorization process for political ads goes live in the U.S.

Earlier this month – and before Facebook CEO Mark Zuckerberg testified before Congress – the company announced a series of changes to how it would handle political advertisements running on its platform in the future. It had said that people who wanted to buy a political ad – including ads about political “issues” –  would have to reveal their identities and location and be verified, before the ads could run. Information about the advertiser would also display to Facebook users.

Today, Facebook is announcing the authorization process for U.S. political ads is live.

Facebook had first said in October that political advertisers would have to verify their identity and location for election-related ads. But in April, it expanded that requirement to include any “issue ads” – meaning those on political topics being debated across the country, not just those tied to an election.

Facebook said it would work with third parties to identify the issues. These ads would then also be labeled as “Political Ads,” and display the “paid for by” information to end users.

According to today’s announcement, Facebook will now begin to verify the identity and the residential mailing address of advertisers who want to run political ads. Those advertisers will also have to disclose who’s paying for the ads as part of this authorization process.

This verification process is currently only open in the U.S. and will require Page admins and ad account admins submit their government-issued ID to Facebook along with their residential mailing address.

The government ID can either be a U.S. passport or U.S. driver’s license, a FAQ explains. Facebook will also ask for the last four digits of admins’ Social Security Number. The photo ID will then be approved or denied in a matter of minutes, though anyone declined based on the quality of the uploaded images won’t be prevented from trying again.

The address, however, will be verified by mailing a letter with a unique access code that only the admin’s Facebook account can use. The letter may take up to 10 days to arrive, Facebook notes.

Along with the verification portion, Page admins will also have to fill in who paid for the ad in the “disclaimer” section. This has to include the organization(s) or person’s name(s) who funded it.

This information will also be reviewed prior to approval, but Facebook isn’t going to fact check this field, it seems.

Instead, the company simply says: “We’ll review each disclaimer to make sure it adheres to our advertising policies. You can edit your disclaimers at any time, but after each edit, your disclaimer will need to be reviewed again, so it won’t be immediately available to use.”

The FAQ later states that disclaimers must comply with “any applicable law,” but again says that Facebook only reviews them against its ad policies.

“It’s your responsibility as the advertiser to independently assess and ensure that your ads are in compliance with all applicable election and advertising laws and regulations,” the documentation reads.

Along with the launch of the new authorization procedures, Facebook has released a Blueprint training course to guide advertisers through the steps required, and has published an FAQ to answer advertisers’ questions.

Of course, these procedures which will only net the more scrupulous advertisers willing to play by the rules. That’s why Facebook had said before that it plans to use A.I. technology to help sniff out those advertisers who should have submitted to verification, but did not. The company is also asking people to report suspicious ads using the “Report Ad” button.

Facebook has been under heavy scrutiny because of how its platform was corrupted by Russian trolls on a mission to sway the 2016 election. The Justice Department charged 13 Russians and three companies with election interference earlier this year, and Facebook has removed hundreds of accounts associated with disinformation campaigns.

While tougher rules around ads may help, they alone won’t solve the problem.

It’s likely that those determined to skirt the rules will find their own workarounds. Plus, ads are only one of many issues in terms of those who want to use Facebook for propaganda and misinformation. On other fronts, Facebook is dealing with fake news – including everything from biased stories to those that are outright lies, intending to influence public opinion. And of course there’s the Cambridge Analytica scandal, which led to intense questioning of Facebook’s data privacy practices in the wake of revelations that millions of Facebook users had their information improperly accessed.

Facebook says the political ads authorization process is gradually rolling out, so it may not be available to all advertisers at this time. Currently, users can only set up and manage authorizations from a desktop computer from the Authorizations tab in a Facebook Page’s Settings.

Google announces ban on cryptocurrency ads

A little over a month after Facebook updated its advertising policy to include a blanket ban on  cryptocurrency, Google is following suit. Shortly after reporting that it had removed 3.2 billion “bad ads” in 2017, the search giant issued an update to its advertising policy page, highlighting a ban on:

  • Binary options and synonymous products
  • Cryptocurrencies and related content (including but not limited to initial coin offerings, cryptocurrency exchanges, cryptocurrency wallets, and cryptocurrency trading advice)

The company notes that it’s making the decision out of an abundance of caution around the admittedly volatile space.

“We don’t have a crystal ball to know where the future is going to go with cryptocurrencies,” Google ad executive  Scott Spencer told CNBC in an interview published last night, “but we’ve seen enough consumer harm or potential for consumer harm that it’s an area that we want to approach with extreme caution.”

In spite of that caution, the rules aren’t slated to go into effect until June. Even so, they appear to have already had an impact, with Bitcoin dipping below $9,000 after the announcement. The fluctuation echoes a similar change in price after the Facebook announcement back in January, which caused best known cryptocurrency to drop 12-percent.

While some enterprising companies have reportedly worked around Facebook’s ban through intentional misspellings of words that might otherwise send up a red flag for the social media site’s ad police, a spokesperson for Google tells Bloomberg that the company is working to address that issue.

That, one imagines, will be in place by the time these polices go into effect over the summer.