Despite the popularity of podcasts, podcast advertising has not caught on because of their asynchronous nature. However, podcast advertising has huge potential. Paul Kelly, CRO, A Million Ads, discusses how the podcast advertising ecosystem is growing and how several players are helping brands leverage podcast advertising.
Today, the popularity of podcasts has grown so much that September 30th is celebrated as International Podcast Day. For all that podcast production values have skyrocketed, garnering stardom, becoming one of the most profitable categories on Patreon, and sparking cross-platform bidding wars for exclusivity, podcast advertising has taken a long time to catch up.
Perhaps because of this, podcasting accounts for less than 8% of total US audio ad spending at just $1.33 billion. The asynchronous time between when podcasts are released and listened to means they don’t have the personalization mechanisms available for other audio advertising platforms. Programmatic advertising is still the norm, not the exception, and buying podcast ads usually means long Zoom calls and even longer email chains. Moreover, most standard podcasts cannot use creative forms of advertising like other platforms because they are offline and, again, asynchronous, resulting in more limited data sets.
More details: 6 Methods to Monetize Your Podcasts
The potential of podcast advertising
But the rising cost of producing podcasts, combined with the amount of time it takes to really build a podcast audience, even though more than half of all Americans have listened to at least one podcast, means that progress is needed for sustainable podcast growth beyond subscriptions and Patreon. In addition, a standard podcast is usually created using MP3 files, which limits the creativity of advertisers. While in-browser advertising can take several different forms, such as interactive quizzes, the inherently offline and asynchronous nature of podcasting makes it extremely difficult.
But there are also bright moments. Consumers have a high recall of podcast ads and 38% of Americans over the age of 12 regularly listen to podcasts, reports Buzzsprout. (There’s a reason that 18-49 remains the critical demographic that TV networks claim to be the most popular — and it’s about disposable income and advertising.)
And how a recent Forrester reports, the lifting of COVID-19 restrictions (and thus the return to travel and business travel) will inevitably lead to more podcast consumption. It is not only that consumers will have more opportunities to listen, but, as Niemen Lab claimed, it is again possible to create the kinds of reportage, long-form documentary shows that are among the most popular with viewers. Back to normal means more listeners, advertisers, and (importantly) investment in the core mechanics of podcast ad tech.
We are already seeing the first green shoots of this. As a medium, podcasting is a challenge for both brands and the ad tech industry. This is undeniable. But it also has inherent advantages over other mediums that make it an irresistible target, not least its growing audience, and the ad-tech industry is eager to capitalize on them.
The evolving advertising ecosystem
Take Audacy, for example. With a massive platform (over 3,000 podcasts, partnerships with major producers, and a reported reach of 28 million unique listeners), Audacy can provide significant exposure, provided it can actually get the attention advertisers want. This led to the launch of the Digital Audience Network. Rather than focusing solely on show-based shopping, the network allows targeting of listener profiles based on the demographics and interests of those listeners as shown by other podcasts they listen to and available data, even with the limitations inherent to podcasts as a medium.
The proprietary nature of the Digital Audience Network means we don’t know how basic ad targeting works. But the company claims that the solution is fully integrated into its technology suite and allows for dynamic marketing common in other segments of the digital advertising world. Audacy also claims to offer real-time analytics, providing actionable insights into ad performance and providing data-driven rationale for targeting decisions. Simply put, buyers can see how many people have received an ad and what interest group they belong to.
iHeartMedia is also entering a smarter podcast advertising ecosystem. We’ve built a relationship with Sounder, which provides brand safety assessments on podcasts using machine learning to decipher podcasts and identify potential issues. Brands don’t want to be associated with controversial content…and if you remember, podcast ads are usually well remembered by listeners. If podcast advertising is considered safer than it is now, as there is less opportunity to manage brand risk now, then podcast advertising can work for both creators looking to monetize and brands looking to reach new audiences.
Sounder’s technology uses sophisticated AI/ML models to analyze podcast content for brand relevance, topics, segmentation and content. Advertisers and networks get fast and actionable information that ensures they are using their ad spend efficiently and avoid potential brand damage.
The iHeartRadio network is home to a variety of podcasts, from religious programs to raunchy comedy shows. It’s an example of a legacy broadcaster successfully transitioning to a new media format, and the company has spent heavily on original programming. Podcasting allows iHeartRadio to reach a younger demographic that is increasingly alienated by traditional broadcast media.
According to the company’s earnings for the second quarter of 2022, podcasts make up a quarter of its profits. Amid declining traditional radio listenership, the podcast business is a bright spot on the balance sheet with serious potential for long-term growth. To capitalize on this, it must provide a level of brand safety for advertisers, while dynamic analytics and targeting tools reflect the rest of the digital advertising economy.
Competition is growing, interest is growing
Meanwhile, smaller startups are also finding ways around the asynchronous nature of podcasts, capitalizing on the rise of smart home speakers. Content creators can now insert AI-powered dialog-based voice ads, turning listening into an active experience with Instreamatic, which raised $6.1 million in 2021 from Google Assistant investment, among other things.
Podcasting as we know it—which dates back to 2004—is entering a new level of maturity, and podcast advertising is still catching up. a data, as well as other forms of advertising.
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https://www.spiceworks.com/marketing/advertising/guest-article/why-podcast-advertising-should-part-of-your-marketing-strategy/ Why podcast advertising should be part of your marketing strategy