Money talks: how are podcasting’s biggest players monetising aural’s allure?
Will audio ads soon be bought programmatically? We take a look at the increasingly popular podcast, finding out how its biggest players are monetising their content.
Apple may slowly be euthanising the iPod, but the tech icon’s aural spawn – the podcast – is far from dead. Recent figures from podcasting platform Acast show a leap in ‘listenings’ from 450k in October 2014 to 11m in 2016, and while the rise into the mainstream has been slower than the proliferation of Snapchat or the hype of Pokemon Go, its popularity has grown steadily since its emergence in 2004 (or 2005, depending who you speak to).
While listenership figures have progressively increased throughout the last decade, it’s only in the last couple of years that both the media and brands have taken a real interest in the audible format. Many would attribute this magnetism to the weekly podcast Serial which, from October 2014, told the untold true story of high schooler Hae Min Lee, her murder in 1999, and her ex-boyfriend Adnan Syed’s conviction. The podcast from WBEZ and This American Life was the fastest to pass the 5m downloads mark; as of February 2016 it had been downloaded 80m times.
The relatively low production cost and ease of distribution involved with podcasting has meant the format has burst beyond the confines of traditional radio stations and audio brands. Thousands of hobbyists record and upload their musings to app stores from their bedrooms. On the other end of the scale, personalities such as Gary Neville, Dawn O’Porter and Scroobius Pip (pictured) use the medium to broadcast their views, either via traditional brands such as the BBC and Sky Sports or through their own independent set-ups.
Podcasting has also been a new opportunity for publishers to explore. Heritage titles such as Private Eye and the Guardian regularly release their own sub-series alongside newer brands such as Vice and Buzzfeed.
“You can’t read while you’re listening to a podcast, which is why it’s unrivalled as a premium audio product,” explains Ross Adams, UK country manager of Acast.
“It’s something that works really well for the commuting, time-poor, C-suite audience who don’t have time to read. For example, the Economist has seen shelf performance drop because people are saying they don’t have time to read the whole magazine. But you can easily plug in and take podcasts with you to a lot more places. That’s why the Economist – as well as the Financial Times – are turning more towards audio.”
The Times and the Sunday Times have also begun experimenting in the field, producing the PanDolly podcast as a companion to its Style supplement, football show The Game and Red Box, which explores politics. And parent company News UK’s recent acquisition of the Wireless Group is, amongst other things, a vow of commitment to the format, according to Oliver Lewis, director of digital strategic sales and partnerships at the publisher.
“Podcasts have been experiencing a rebirth at the Times and the Sunday Times as an emerging entertainment, comment and analysis format that is in keeping with the high dwell times we experience across all platforms,” he says. “We’re only just rediscovering the format so brand integration is, at this stage, proof of concept while we test and learn how best to integrate brand messaging. However, we’re always mindful to respect our readers and will be conducting research on brand placement and integration, which will then inform our future ad strategy.”
Ad strategy is not just something crucial to the successful big players anymore. Amateur and independent podcasters raking in listening figures have also started to monetise their content. Elizabeth Laime, comedy writer and founder of the Totally Laime, Totally Married and Totally Mommy podcasts, recently jumped aboard the commercial train with her projects.
“We were finally reaching a tipping point with our time invested [in the shows] and realised we really needed to be making a bit more money from them,” she says.
“We try to maintain our same free-flowing chit-chat even in the advertisements as much as possible, but at the end of the day, our listeners are supportive and get that we are providing hundreds – or thousands – of hours of entertainment, so if they have to suffer through a few short ads it’s a small price to pay.”
Like many smaller podcasters, Laime works with a podcast-specific media network – in her case, Midroll – to link with advertisers. These shops broker the deals to serve pre-recorded pre-roll and traditional ad break slots, as well as the prized host-spoken sponsorship deals where the podcast presenter breaks to chat openly about the sponsor’s product or service. It’s a unique offering, as strict regulations in radio broadcasting prohibit this natural style of advertising.
For Craig Jackson, head of UK marketing at mattress brand Leesa Sleep, the host-spoken option is what elevates podcasts as an ad format above others.
“We see podcast advertising more as influencer marketing, rather than as straightforward advertising,” he says. “We look at the podcasters that we like, and that align with our brand and our values, and we approach them. If they agree to work together, we give them a mattress to try, and a lot of creative freedom in terms of how they promote the product.
“We’ll ask them to talk about our brand and brand values but when it comes to content, they know their audience better than us; they know how to engage with them.”
Steven Ryan, co-head of acquisition and optimisation at male grooming brand Cornerstone, adds that the host-read approach – and to a certain extent, audio ads – also come with economic benefits. He explains: “It’s a way of getting really big scale without having to pay for really expensive creative campaigns. It’s also quite a responsive channel – we can easily get something turned around quickly to test it out.”
But while podcast marketing may be easy to create, test and distribute, it is notoriously difficult to measure. The online to download to offline nexus means play-through listening data is tricky to collate, while the multiple streaming and distribution platforms (namely iTunes, Soundcloud and embedded players) exacerbate the problem. Both Cornerstone and Leesa attempt to work around this challenge by promoting bespoke URLs and coupon codes in podcast ads, making it easier to track who has converted from a listener to a customer. However, as Jackson puts it, “it doesn’t give a true picture”.
Other issues arise from a deficiency in audience data, Adams explains. “Platforms such as iTunes don’t share user information such as listener age and gender, and that’s the data people are used to buying now.
“However, we counter that by offering clients contextual data – for instance we know someone is into football if they download an Arsenal podcast. We can tell a lot about a person by which shows they download. But data is the piece that needs to get better.”
Looking ahead, Adams reckons the industry has already proved it can shoulder big corporate spenders as well as the likes of Leesa, Cornerstone and MailChimp (which, as Serial’s sponsor for two seasons, almost garnered a fan base for its quirky pre-roll ad).
“The likes of Vodafone, BMW and Direct Line are coming to us now,” Adams says. “This year it’s switched to more mainstream brands and that’s only going to continue. They tend not to look at the host-read sponsorships, but they’ll be interested in ad slots that they can buy in a group of podcasts.
“For instance, if a brand wanted to target people who are interested in sports, we could group together all our sports podcasts, almost like a mini radio station, and sell them slots across that network.”
And bigger brands are right to be exploring the format, as bigger and bigger audiences are beginning to download. Podcasting may have once been the preserve of an affluent, BBC-loving audience, but now the genre welcomes all, with audio offerings exploring hip-hop, booze, etymology, human rights, sex and everything else in between. So what’s the next step?
“Spotify is investing heavily in programmatic right now, and I can see audio being bought that way moving forward,” says Adams. “We have the adtech to plug into, so I think from early next year you’ll start to see a lot more talk about programmatic within the podcast world.”
This feature first appeared in the 12 October issue of The Drum magazine