Podcasts, episodic audio programmes that are subscribed to and downloaded by users, have been around for more than 15 years. They predate even the smartphone boom, having risen to prominence with the first wave of iPods – hence the name, a portmanteau of ‘iPod’ and ‘broadcast’.
But while digital advertising has evolved considerably over this period, with marketers keen to exploit every avenue of communication for brand purposes, the humble podcast remains relatively underdeveloped in terms of its marketing potential. So, what can this channel offer to brands and marketers, and are ad tech providers supplying the necessary tools to monetise it?
The power of narrowcasting
There’s no denying that podcasts remain something of a niche channel. Even Steve Jobs, when introducing new software for downloading digital audio shows back in 2005, struggled to sell the format, describing it as “sort of like TiVo, for radio, for your iPod”, and insisting that “it’s not just the Wayne’s World of radio, but real radio is jumping onto this”. Faint praise indeed.
Unlike the explosive booms we’ve witnessed in channels like live video, podcasting has seen slow but steady growth. In its 2016 US ad spend report, the IAB broke out audio ads for the first time. $1.1bn was spent on digital audio, with around 80 per cent of that on mobile. While specific numbers weren’t given, the report made it clear that, in this category, podcasts take a back seat to music streaming services.
On the content side, there have been plenty of successes, but nothing that has gone viral to the extent that it drives mass adoption of the format. The closest we’ve come to a breakout hit was Serial, an NPR real-crime show that saw its first season downloaded 250m times.
The 2015 show prompted many to declare it ‘the year of the podcast’, and indeed monthly podcast listenership in the US grew 23 per cent year-on-year between 2015 and 2016, with 21 per cent of Americans aged 12 and up listening to a podcast within the last month. That is the same percentage of the US that uses Twitter, and equates to 57m Americans.
Much of that growth is being driven by mobility. In 2013, with the iPod’s moment having passed, most podcasts were downloaded and listened to on a computer, which restricted consumption windows significantly. However, by 2016 that majority had flipped, with 71 per cent of podcasts being listened to on a smartphone or tablet. Changing data consumption habits have also meant that more podcasts are now streamed rather than downloaded, gving consumers greater flexibility in what they listen to, and when.
Podcasts are also capturing the youth audience that marketers are so keen to reach, with 27 per cent of Americans aged 12–24 saying that they have listened to a podcast in the past month, up from 11 per cent in 2013. The typical podcast listener is affluent – 41 per cent earn over $75,000 (£58,000) a year, compared to the US population rate of 33 per cent – and highly educated, with podcast listeners more likely to have completed a four-year college degree or undertaken postgraduate study.
On top of that, podcast listening is much more likely to be an active choice compared to live radio. Consumers have to select the shows they are interested in, either download them or subscribe to a feed, and then choose to listen to them, making podcasts the radio equivalent of Netflix or iPlayer. In the age of micro-targeted advertising, this means that podcasts can offer marketers much richer demographic and behavioural data than a live radio broadcast.
“Its core strength at the moment is in narrowcasting,” says Matt Hill, co-founder of the British Podcast Awards. “It creates audio content for niche groups of people, but it does so really effectively. Even though the audiences are quite small, those shows do very well with advertisers because those listeners are interested in one specific area – it’s exactly who they want to market to.”
Dave Van Dyke, president of media analysis firm Bridge Ratings, agrees. “Podcasting’s marketing strength is its targetability and beneficial advertising environment,” he says. “As long as mass reach is not an issue for advertisers, podcasting’s place in the marketing mix is right alongside digital platforms that target passionate lifestyle consumers.”
A question of format
Podcasts may be growing steadily and boast an attractive core demographic, but there are a number of issues to be addressed when it comes to using them as a marketing channel.
After all, with the growth of video over the past few years, advertising remains a visual game for most marketers. Research tells us that 85 per cent of mobile video is being watched without sound, while video ads with auto-playing audio are generally regarded by consumers as disruptive and annoying. In this environment, why would brands want to pay out for a format with no video, and only audio?
On top of that, while the demographic and behavioural data associated with podcasts may give marketers insights into their audience for targeting purposes, audio ad formats are much harder to customise to individuals compared to the flexibility of display and video advertising, where content can be tailored down to an individual level.
The final issue is one that has been part of podcasts since their earliest days: the limited number of audio ad formats, especially when compared to the kaleidoscope of options available online and in-app.
For the most part, advertising on podcasts falls into two categories: pre-recorded audio ads similar to those found on traditional commercial radio stations, and native ‘live-read’ sponsorships and adverts, where the presenters of the podcast integrate advertising directly into the show, performing the ads themselves. While the former can be bought using programmatic methods to target specific audiences, it’s the latter that is usually held up as the most effective format for podcasts to embrace.
“It is a huge benefit when you have live-read ads that the hosts of a show you’re a fan of are reading out, especially where they’re trying to make it a fun and entertaining thing,” says Matt Wilson, co-host and producer of War Rocket Ajax and Movie Fighters, two pop culture-focused podcasts hosted by Blog Talk Radio. “It’s a far more memorable ad than what you put an ad blocker on your browser to avoid seeing, or something pre-recorded that you might also hear on the radio.
“I tend to remember the ads I hear Paul F. Tompkins read on Spontaneanation far more than, you know, the pre-recorded AutoZone ads on The Steve Austin Show. I think there’s a real benefit and weight to a live-read ad. I think that’s the real strength.”
These ads play into what is often held up as one of the key strengths of the podcasting format: the intimate relationship created between the host and the listener. Much like YouTube personalities used by brands in influencer-based campaigns, podcast hosts are often seen as trusted friends by consumers, and that relationship can maintain the value exchange of advertising at a time when much of digital marketing is struggling to. That high level of trust carries through to results, too, with podcast campaigns reporting engagement levels two to three times higher than radio ads.
“In general, I don’t think people mind advertising,” says Wilson. “They may not love it, they may not love having to either listen to an ad at the beginning of the show or skip over it. But I think they realise that, if we’re going to remain a going concern, we’ve got to find ways to have it pay us back a little bit. I think most listeners can do that calculus in their head.
“It’s not foreign to them or weird to them to think ‘Okay, there are real human beings who make this podcast, and they have to figure out a way to make it worth their while to do it.’ So I think that even if they don’t necessarily like having that extra 30 seconds at the top of a show, they can justify it in their minds.”
Some podcast distribution networks have been experimenting with bringing pre-recorded ads more in line with other mobile advertising. Stitcher, whose app allows users to access over 65,000 podcasts and radio shows, has enabled advertisers to present visual information on mobile screens alongside audio content, with in-app links to create a smooth customer journey. Ad tech company AdsWizz launched PodWave last year, enabling marketers to purchase audio ads on podcasts, including native live-read, in a ‘quasi-programmatic’ way.
However, with the intimate relationship between host and listener being the real goal for most marketers, some brands have begun branching out. They’re no longer advertising on podcasts, they’re creating them.
The Message is the key
Just as the success of Serial helped introduce podcasts to a wide audience, the new wave of branded podcasts that are emerging can probably be traced back to The Message, a science fiction podcast created by GE and podcast network Panoply. The show, which was compared to Orson Welles’ iconic radio production of War of the Worlds, won gold at the 2016 Cannes Lions in the Entertainment category, and served as a showcase for the potential power of branded podcasts.
Since then, podcast publishers and networks have been racing to open branded studios that can work with marketers to create high-quality content for global firms. Gimlet, Midroll and Gannett have all launched new initiatives, while Panoply, the network behind The Message, estimates that it now generates as much as 25 per cent of its income from branded content. Some industry observers are predicting that 2017 will see the number of branded podcasts more than double.
“A big part of what makes eBay unique are the tens of millions of sellers around the world that make their living on our platform. Our success is predicated on their success, and we are constantly looking for ways to bring their stories to life,” says Annie Lupardus, director of leadership and seller communication at eBay. “We had experimented with video and written profiles, but hadn’t found a medium that really let us explore the nuances of who they are and why they are so central to our brand. With podcasting, we discovered a way to develop a more intimate relationship between the stories and our audience that was perfect to tell our sellers’ stories.”
eBay teamed up with Gimlet Media to create Open For Business, a podcast that explores how to build a business from the ground up. Hosted by John Henry, founder of the startup accelerator Cofound Harlem, each episode is centred around an interview with a business owner, but uses a narrative approach common to podcasting to combine practical advice with compelling stories of hard work, ingenuity and success. The show has had two six-episode seasons so far, and follows a ‘curriculum-style’ approach meant to provide listeners with a comprehensive guide to establishing a business.
“We were thrilled with the download numbers and reviews. We more than doubled the number of downloads from our original expectation and debuted as the number one business podcast on iTunes following the season one launch,” says Lupardus. “We also saw a 16 per cent lift in unaided favourability of the eBay brand overall, which was a great vote of confidence for us, and a big reason we opted for a second season.”
This success comes at a cost, though. Branded podcasts aren’t cheap to make, and in order to build and maintain an audience, companies can’t simply focus on promoting their products and services – listeners need a compelling reason to come back week after week. Too much direct promotion, and audiences feel like they are listening to a 30-minute advert.
“We didn’t want to shove the brand down people’s throats and make them feel like they were listening to a commercial,” says Lupardus. “We wanted to tap into the universal truths and human realities of starting a business, and build an audience based on being both interesting and helpful. We have plenty of traditional marketing efforts in place to attract and scale sellers – this programme was more about having people think about eBay in the context of entrepreneurship and small business, as well as providing a resource to entrepreneurs.”
“Branded podcasts that steer away from the obvious commercial tie and create content that is highly useful for the subject matter are making the most headway here,” says Bridge Ratings’ Van Dyke. “2017 holds great promise as a breakout year for podcasting. However, much of the growth we are projecting still rests on the shoulders of the content creators, because ultimately a flood of more audio consumers to the podcasting platform will be short-lived if the presentation, production and focus of the content cannot hold listener interest.”
Balancing brand needs with creating content that consumers will engage with means giving over a lot of creative control to the podcast studios who have expertise in these areas. Together with the costs associated, many smaller brands will not be able to generate this sort of high-quality audio content without a significant time investment, and even then they may lack the scale and infrastructure to properly reach consumers with their finished podcast, which often requires marketing efforts of its own.
“We’ve promoted the podcast through many of our seller marketing channels: emails, our seller-facing blog, as well as through interviews and ads on eBay Radio,” says Lupardus. “That said, because the goal of the podcast is really around relevance and consideration for eBay, we’ve gone a bit heavier on marketing Open For Business to other podcast listeners through Gimlet’s network of shows, as well as through social and traditional media. We’ve also experimented with live events, hosting entrepreneur meet-ups and learning sessions in New York and Austin, Texas.”
However, much of the appeal of the podcast undoubtedly lies in its do-it-yourself, punk rock spirit. The barrier to entry for creating content is remarkably low; all the aspiring producer needs is a basic laptop and an internet connection. And for a little more investment, even the smallest brand can create a programme that sounds professional, as long as it has a compelling story to tell. The intimacy and trust that brands are so keen to capitalise on is hard-baked into even the smallest show.
“I’ve had numerous people tell me, ‘It is so weird to hear your voice come out of a person, because I hear your voice in my ears all the time’,” says Matt Wilson. “Which is a weird thing to hear. I don’t know how to react to that really, but it’s also flattering, in a way, and it means that my voice carries weight.”
In an age of ever-more disposable media and filtered-out advertising, that kind of voice may be worth its weight in gold to brands.
This article first appeared in the June 2017 print edition of Mobile Marketing. You can read the whole issue here.