Why are podcasts so popular – A recipe for success for companies

Why are podcasts so popular – A recipe for success for companies

Ann-Kathrin Habl
Ann-Kathrin Habl
published on July 6, 2022   

Podcasts – The most important in a nutshell

  • Podcasts were implemented by Apple in 2005 through iTunes and can be published on various platforms.

  • Nearly 70 percent of podcast listeners are between 21 and 35 years old.

  • Podcasts are financed by advertising and sponsorship.

  • Advertisements can be placed at the beginning, during or at the end of a podcast episode.

  • In Germany, the podcast platform Spotify is the most popular.

These days, there’s hardly anyone who doesn’t know about them: podcasts are becoming more popular every year. There are few people who have never listened to a podcast. Once you get into it, it’s hard to stop, and you often spend several hours listening to a wide variety of discussions and opinions on specific topics from diverse personalities. But podcasts are not only gaining extreme importance among private individuals. More and more companies are also using this format to draw attention to themselves. The audio content can be used, for example, for exciting insights behind the scenes of one’s own company. Those who do not want to create their own content have the option of reaching users by placing advertisements. Find out what triggered the hype around podcasts and how you can use the format wisely in this blog post.

What is a podcast?

The word “podcast” was created by combining the words “broadcast” and “iPod.” Apple implemented podcasts in 2005 as the first service provider in the music program iTunes and thus laid the foundation.

Podcasts themselves are audio content that is uploaded and published on various platforms. Users can play the content there at any time. They each appear as a “new episode” on portals such as Spotify or Apple Podcast. All these episodes together then form the podcast.

Who listens to podcasts?

While only 14 percent of Germans listened to podcasts in 2016, the number almost tripled to 38 percent in 2021. The trend is rising: other statistics from 2021 are also interesting in this context. Podcasts are particularly popular with younger people. Around 67.4 percent of listeners are between 21 and 35 years old. However, the age groups over 35 have also gained ground. Accordingly, the target group for podcasts has spread out over the years. It’s also worth mentioning that about 60 percent of podcast listeners are male and 40 percent are female, so the gender distribution is relatively balanced.

Development of podcasts listenership from 2016 to 2021

Development of podcasts listenership from 2016 to 2021

Why are podcasts so popular?

So now let’s get to the opening question. The main reason podcasts are so popular is that they don’t require our full attention. While videos only work if we watch and listen to them (subtitles aside), podcasts can be listened to while doing many activities on the side. Whether it’s cooking, cleaning, driving, or falling asleep, podcasts can easily accompany us in all of these activities without requiring a major time commitment on our part.

And there are podcasts for different purposes: the “Falling Asleep Podcast” by Toby Bayer has been released every 2 weeks since 2010 and is still a real classic among podcasts. In the 50-90 minute episodes, Toby delivers monologues and reads chapters by Kant, Goethe and Rilke. With his calm, monotone style, he regularly helps thousands of listeners fall asleep.

Even in times of the corona crisis, the popularity of podcasts became well visible: no sooner did it become clear that the virus would change social life in our country as well, a new podcast found itself at the top of the podcast charts – “The Coronavirus Update with Christian Drosten” by NDR info informed listeners daily about the new developments and challenges brought about by the virus. Today, the podcast is still relevant to listeners, reporting on current infection figures and much more.

How are podcasts funded?

There is a simple answer to this: through advertising. As with television shows, insertions from advertising partners can be added at the beginning or during the episode. In addition, there is the possibility of financing the podcasts through sponsoring. The prices here depend on the number of downloads. The more listeners to the podcast episode, the higher the CPM (price per 1,000 listeners).

In the US, there are standardized amounts: for an episode that has between 100,000 and 999,999 downloads, the host gets $30 per 1,000 downloads for a 30-second commercial. The host in this case would earn between $3,000 and just under $30,000 from a single podcast episode. But few podcasts have that many listeners, so revenues of that amount are very rare.

The advantages of podcast advertising

If you’re a business that doesn’t have the time or budget to create your own podcast, consider investing in podcast advertising. Due to its strong growth potential, podcast advertising revenue is already estimated to reach 171 million euros in 2024. Placing ads makes it easier for companies to reach their target audience. Podcast advertising in particular convinces here with the following advantages, among others:

  • high attention of the listeners
  • high trust
  • high advertising acceptance
  • strong advertising recall
  • selection of the target group

Advertising can take place at the beginning, during or at the end of a podcast episode. Even with a niche product, it is often possible to find podcasts that serve precisely this niche and in which a company can place advertising for its own product. In contrast to classic advertising channels, there is less risk of wastage with podcast advertising. With the right choice of podcast, many listeners of the desired target group can be reached. A company should think in advance about what is to be achieved with the advertising placed. Does the company want more visitors to its website, more social media followers, more sales, or is it more about brand awareness?

Advertising formats in podcast advertising:

  1. Sponsorship: this is where the podcast host mentions at the beginning or end of the episode that the podcast was sponsored by a particular company. An alternative to this is the company’s own 10-second video spot inserted into the episode. Sponsorship can be done for one podcast episode or for multiple episodes. Due to a close bond between listener and podcaster, such an ad comes across more like a recommendation from good friends.
  2. Native Ads: Here the personal character of the advertising plays a major role. In this format, the advertising message is addressed by the podcaster himself. As a rule, the address lasts about one minute. Native Ads are therefore also suitable for advertising products that require explanation.
  3. Audio spots: These 30-second inserts are produced by the company itself and simply inserted at the appropriate point by the podcast host. The use of audio spots is recommended if the sequence has already been produced for other channels or is to be used in several podcasts.
  4. Dynamic Ads: This service, offered by podcast marketers, is on the rise. Here, the advertising spots are played out programmatically and adapted to the user.

So there are a few different options in the podcast advertising space. Due to the special effect of audio on the brain, a higher advertising impact is generated than with classic advertising. Podcast advertising works best when advertised in a podcast that appeals to the target audience that the advertising message is intended to reach.

Spotify Marketing

One platform where countless podcasts can be found is Spotify. The audio streaming service boasts approximately 365 million monthly active users worldwide. 22 percent of these users regularly listen to podcasts here. In 2020, the number of listeners has even doubled according to Spotify, which once again reflects the increasing popularity of podcasts. In Germany in particular, the format is currently very popular. Here, as many as 27 percent use Spotify to listen to podcasts.

The platform is therefore very interesting, especially in the area of marketing. The target group is in a constant state of growth, which opens up new potential. However, it is not only user numbers that play a major role in the relevance of digital audio marketing – users are addressed via podcasts on a completely different level compared to regular advertising platforms.

According to studies, people are particularly attentive while listening to a podcast. A survey by OMR also found that podcast listeners have above-average education and a comparatively high income. Since podcasts serve both to entertain and to provide information, Spotify Ads, i.e. advertisements before or during a podcast, should also be used as a way of providing entertainment or knowledge. In fact, according to the OMR survey, podcast listeners are anything but averse to products or services advertised on the podcast, as long as they match the content. Therefore, companies should consider using the popular platform Spotify as a marketing tool and either upload podcasts here themselves, or place suitable ads.

Why are podcasts so popular - A recipe for success for companies
Do you want to place ads on Spotify?
We show you what options you have and how Spotify Ads work.

4 examples of successful podcasts from companies

The podcast categories give you an idea of why podcasts are so popular: Whether news, comedy, true crime, knowledge, lifestyle, business or sports – there is now a podcast for every field of interest. To find out about Prohibition in the USA, you no longer have to read a 500-page book or surf the net with full concentration: Just put on your headphones, listen to the episode and use the time for something else. Even on the subject of pregnancy and birth, there is an entire category that accompanies parents through their pregnancy. Corporate podcasts are also strongly represented, here are a few examples:

  1. Tagesschau
    If you can’t make it to watch the Tagesschau, you can catch up on the latest news in the Tagesschau podcast.
  2. Techniker Health Insurance
    Techniker Krankenkasse shares its expertise, for example, with the podcast “Is this still healthy?”
  3. Edeka
    Supermarkets also use the hype for themselves. Edeka’s podcast “Eat like this” teaches listeners in a relaxed way how to eat more consciously.
  4. Audi
    There’s also something for car lovers: Audi’s podcast “The Future is Electric” talks about the various facets of electromobility.

The podcast hype is not over yet!

Podcasts now fulfill almost all the purposes for which different media were previously responsible. To get informed, people turned on the TV and watched the news. For entertainment, people zapped through the program or browsed for hours through Youtube videos. To build up one’s knowledge, the Internet or libraries were the main options. But podcasts combine all these categories and have a decisive advantage: they can be accessed at any time. With an Internet connection and a click, the whole world of podcasts is open to the user.

The end of the podcast hype is not yet in sight. No wonder, because this format is a wonderful middle ground between everyday activities and hours of research. Every target group gets its money’s worth here.