Apple has traditionally refrained from selling ads on its owned podcasts, but recent developments suggest that the company may be considering a shift in its approach.
Apple Podcasts
Historically, Apple's podcasts have remained ad-free. In July, however, the company announced that State Farm would sponsor the second season of its Apple News show "After the Whistle."
According to insiders familiar with the situation, the company is exploring the possibility of including advertisements in its original podcasts. The move would allow the company to explore new revenue streams and boost profitability.
The possibility of Apple entering the podcast advertising market is in line with the recent trends seen in the industry. As Bloomberg points out, podcasting has shifted focus towards approving fewer, low-risk shows while also prioritizing recovering production costs through advertising revenue.
How Apple plans to incorporate ads remains to be seen. Podcast advertising often targets users based on IP address, which seems antithetical to Apple's privacy-forward approach. At present, it is unclear if Apple will follow a general season sponsor approach.
Recently, Apple introduced changes to how Automatic Downloads are handled. Bloomberg notes that these changes can potentially reduce the expected downloads for some shows by as much as 15%.
This change has also sparked questions about how it might impact the measurement standards of the podcasting industry and advertisers' performance expectations. While overall download numbers could initially drop, it's possible that brands could see a performance improvement without unplayed episodes skewing metrics negatively.