Podcast Math Problem = Advertiser Opportunity
From the Desk of PodSearch CEO, Dave Newmark
Lately, I’ve been thinking about podcast advertising like Warren Buffett thinks about stocks: the best opportunities are often the ones many people overlook. Podcasts reach more than half of U.S. adults each month, yet advertisers are still disproportionately pouring way more dollars into other media. The numbers don’t lie – this gap is too big to ignore.
The Undervaluation Gap
How much is podcasting undervalued? The number of dollars invested in audio tells the story in a compelling way. When you compare audience size to ad spend on radio versus podcasting, you’ll see that podcast advertising is vastly underutilized:
- Audience Comparison
- Podcast listening now reaches 55% of U.S. adults monthly*
- AM/FM radio listening reaches more than 90% of Americans monthly**
- Ad Investment Comparison
- Podcast annual ad revenue is $2.4 billion*
- AM/FM radio annual ad revenue is now approximately $13 billion**
The clear conclusion: If podcasting was getting the equivalent percentage of ad revenue to the audience it reaches, compared to radio, revenue should be roughly $6.5 Billion. But it’s actually less than half of that ($2.4 Billion).
Why the Math Looks Like This
My observation is that podcast advertising requires more expertise than radio to buy efficiently. Therefore, most audio investment goes to a few big shows that require much less time and labor to buy.
For example:
- Audience Measurement:
- Radio: Nielsen measures across all stations and networks
- Podcasting: There is no centralized database for audience numbers (impressions are tracked through sources such as hosting platforms, player stats – such as YouTube “views”, programmatic platforms, and more)
- Buying Organizations:
- Radio: Stations, networks, and rep firms are well established for selling ads
- Podcasting: There are no rep firms that centralize the buying process for all networks or shows; those ad sales networks and publishers must be contacted individually
- Ad Units:
- Radio: A spot price is based on CPM or Cost per (Rating) Point
- Podcasting: Rates can be based on CPM, flat fee, or custom 360 opportunities, making side-by-side comparisons a challenge
- Formats/Genres:
- Radio: Standardized genres of programming
- Podcasting: Programming for each show reflects the interest and personality of the host
In other words, podcasting requires more effort to place ad buys.
But Effort Brings Reward
And yet, the so-called ‘market’ for podcast ad buying is growing based on pioneering brands and agencies who are unafraid to dive into the chaos and dynamism of podcast ad buying. The revenue figures* over the last ten years demonstrate this.
Beyond revenue, the responsiveness of podcast audiences is another major signal that advertisers can’t ignore. According to Sounds Profitable, when consumers were asked what actions they took in the last six months after hearing ads on various media, podcasts outperformed every other channel in driving immediate purchases:
Podcast listeners were more likely than users of any other medium to
make an immediate purchase after hearing an ad.
(Source: Sounds Profitable “Podcast Landscape 2024”)
This chart shows that 22% of podcast listeners made an immediate purchase after hearing a podcast ad—beating streaming TV, Instagram, YouTube, and every other major platform. That’s not just impressive engagement—it’s proof of performance.
Ad Investment in Podcasts Is Further Rewarded Because of Additional Factors:
- Unmatched Credibility to the Brand Message from a Trusted Voice
The podcast medium sits at a rare intersection of intimacy, authenticity, and attention. Listeners aren’t tuning in passively—they’re actively choosing hosts they trust, stories they care about, and conversations that feel personal. That connection translates directly into advertising effectiveness. - Measurement of Ad Effectiveness
New research from the IAB shows that third-party verification and uniform reporting of ad effectiveness for podcasts are expanding.
Final Thoughts
Podcast advertising isn’t just an opportunity—it’s an arbitrage play hiding in plain sight. The audience is there. The engagement is unmatched. The math screams undervaluation. For advertisers paying attention to the data, the payoff isn’t incremental—it’s exponential.
In Buffett’s words: be greedy when others are fearful. In audio, that means betting big on podcasts—before everyone else does.
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*Sources: Edison Research The Infinite Dial 2024, PwC/IAB FY 2024 Podcast Ad Revenue Study – April 2025
** Sources: BIA, RAB, Radio World, Statista