Brieuc Verwilghen, VP, Publisher Partnerships & Development EMEA & APAC, at AdsWizz, looks at the booming podcast market, and the opportunities it presents for advertisers, as podcast advertising and targeting become more automated.
It's no exaggeration to say that the podcast market is booming. Figures from Edison Research suggest that 68m people listen to podcasts each week in the US, while IAB UK puts the weekly figure for UK listeners at 8m. AdsWizz’s own data shows global podcast advertising has grown 44 per cent from January to June 2020.
Listening habits are increasingly directed to podcasts, which can be enjoyed on-demand, at whatever time the listener chooses. And because the listener makes an active choice to seek out and listen to the podcast, the podcast audience is much more engaged with the content than the average, passive listener. It’s worth noting too that the audience for podcasts is much sought-after by advertisers, skewing towards well-educated and affluent.
All of these factors have led to parallel growth in the podcast advertising market. Podcasts are the fastest-growing audio channel, growing at a rate of 35 per cent year-on-year, with the medium expected to generate over €50m (£45.5m) in ad revenues this year in Europe. The UK leads the way, but Germany, Italy and France are growing fast.
While podcasts present a great opportunity for brands to engage with consumers in a very intimate way, there remain some challenges with podcast advertising. The market is extremely fragmented, including independent content creators focused on one podcast at one end of the spectrum, and at the other, large newspaper publishers, who see an opportunity in podcasts to replace some of their decreasing revenues from print.
This is not an ideal scenario for advertisers craving scale. Up until recently, if an advertiser wanted to target, say, people who listen to true crime podcasts, they would need to manually seek out all the podcasts on that subject, and negotiate deals with each individual publisher. For advertisers, and their agents, used to a world where display and video ads are bought and sold automatically through programmatic platforms, it’s hardly an efficient way of working.
At the same time as demanding scale, advertisers also want the reassurance that their ads will appear in brand-safe environments, which is a challenge the programmatic world has sometimes struggled with.
There’s also a challenge with data. The nature of podcast listening means that the content tends to be consumed via aggregator platforms, making it easier for the listener to access a range of content in one place. The complication here is that very often, these platforms do not make advertising identifiers available to advertisers. Nor do they pass the listener consent for the use of personal data, as per the framework defined by the IAB (TCF), making traditional, data-driven targeting challenging.
Over the past couple of years, we have been working hard to address these issues, striking partnerships with the world’s major podcast publishers to enable advertisers to buy targeted ads within podcasts in a more automated way, at scale, in a brand-safe environment.
A key element of our platform is a tool called PodScribe, which addresses both targeting and brand safety concerns. PodScribe uses advanced content analytics capabilities on thousands of podcasts, enabling advertisers to target podcast listeners contextually. Contextual targeting only delivers ads to podcast shows or episodes that have specific topics as a central theme. Targeting at this granular level is especially important when you consider podcast content can vary episode to episode.
Through our partnership with Comscore, PodScribe also offers the assurance of brand safe inventory by combining our full text analysis and Comscore’s trusted content segments. This joint solution allows advertisers to target away from any content containing specific topics or contextual segments they don’t want to be associated with – such as weapons, negative news and pandemic content. And for publishers, it enables them to segment their content in a way they haven’t been able to before, unlocking new revenue opportunities.
PodScribe only launched six months ago, but we have already transcribed over 30 per cent of the podcast inventory in our US marketplace. This figure will grow rapidly in the coming months as more publishers come on board.
In addition to PodScribe, we are developing deal discovery functionalities, enabling the buy- and the sell-side to specify, respectively, the audience they want and the content they have, and automatically match the two. This function automates the process of putting the right ad in front of the right listener in the right environment.
One of the most popular podcast ad formats is the host-read ad, where the host of the podcast reads an ad before, during or at the end of the podcast. The trust invested in the host by the listeners makes this a very engaging and successful format. But again, it comes with its challenges.
First challenge: the process associated with host-read ads is very manual, as it requires a close collaboration between the brand or the agency, the publisher, and the host. As you can imagine, this typically requires a lot of back-and-forth communication. To solve this problem, we have recently released a feature in beta that automates the booking, approval, and delivery of host-read ads. A brand or an agency that wants to buy a host-read ad can now supply podcasters with a script directly from the AdsWizz buying platform, AudioMatic. The supplied script is recorded by different hosts, generating the “host-read ad”. Each ad is then made available in the buying platform, allowing the advertiser to set up and run the host-read campaigns directly from their platform, with the ability to add targeting criteria.
Second challenge: traditionally, the host-read ad would remain in the podcast forever, which is not ideal if it’s for a time-sensitive promotion. Now, using Dynamic Ad Insertion, publishers can replace the ad, offering them an opportunity to resell the inventory several times to different advertisers looking for the same audience.
Another key format in podcast advertising is dynamic creatives. Our dynamic creative feature allows brands to personalize messages to the varying listeners based on a multitude of targeting criteria – such as time of the day, day of the week, geo-location, weather, age, gender and more. For example, when the temperature reaches a certain degree, you can promote a coffee shop’s new iced coffee to listeners within a certain radius of the shop.
Another format worth mentioning is ads with voice- or motion-activated calls to action. Listeners often enjoy podcasts while exercising, cooking or driving, where they aren’t always able to stop and unlock their phones to engage with an ad.
Our voice-activated ads let a user respond to an ad with a spoken command such as “Give me more info”; “Call this number”; “Book me a test drive”; or “Get directions”. This format is also very effective when the listener is enjoying a podcast at home via a Smart Speaker.
Motion activated ads via ShakeMe let a listener complete a call-to-action simply by shaking or tapping their phone. The motion can trigger whatever action the advertiser pre-sets, like a coupon or app download, or opening a webpage on their device. ShakeMe campaigns typically deliver 5-7x the engagement rate of a traditional call-to-action, but for something like a coupon download, advertisers have seen as much as 40x the usual engagement rate.
Looking forward, the podcast ad market will continue to mature and gather speed, with increased automation. Today, depending on the market, we’re seeing 10 to 15 per cent of podcast inventory in Europe being traded programmatically. That figure will rise to 50 per cent within the next few years. In addition to the obvious desire from podcasters to grow ad revenue, they are increasingly seeking to gain more control and visibility over their inventory and ad sales.
We see our role as enabling this as we continue to develop more sophisticated tools to allow podcasters to diversify ad revenue sources between their own sales teams, specialized resellers, programmatic buyers and premium podcast marketplaces to maximize yield, while keeping control over their sales strategy and listener experience. This will let them decide which ads are being delivered on their content, who gets the first look at their inventory, and who else can see it down the line.
For brands who have not yet dipped their toes in the podcast waters, the message is clear: the podcast opportunity is becoming too big to ignore.