Written on 02/18/16 8:27 PM
I like podcasts, a lot. From long-form comedic discussions on The Joe Rogan Experience to in-depth and captivating historical analysis on Dan Carlin’s Hardcore History, there are a thousand varieties of the growing network known as podcasting. Currently, podcasts replace all other forms of media (TV, terrestrial radio, etc.) in my life. After some forced, albeit needed, self-reflection, I estimate that I listen to around 5 hours of podcasts each and every day. And I’m not alone. Podcasts are no longer a novel sub-genre of streaming radio, but an entity all their own. So what does this rapidly expanding conglomerate mean for advertising? Are larger companies shaving their broadcast budgets and reallocating funds towards podcasts? While the once underground media outlet has broken into the mainstream, why is there such a lack of diversity when it comes to podcast advertisers?
It is important to first understand why podcast advertising is so successful. Unlike your traditional :30 spot in Dancing with the Stars, podcast advertisements are relatively unobtrusive (often worked into conversation in a comedic/entertaining fashion). Additionally, and possibly more importantly, podcast advertisements are almost universally host-read. Think about it, if an individual finds a podcast that he or she enjoys and is loyal to, they will also form a personal connection and loyalty to that podcast’s host. It’s inevitable. Advertisers have begun to capitalize on this loyalty and it is paying dividends. Even when these endorsement style ads stray from the script, hosts often times poke fun at the advertisers themselves, companies see a strong return on investment. Simply put, these advertisements don’t take themselves too seriously, they reach a very loyal audience and they don’t beat you over the head or interrupt your programming. Oh, and that loyal audience I mentioned, 67% of them fall into the much sought-after 18-34 demo, while an additional 36% of podcast listeners also live in households with incomes above $75,000 (only 25% of total population has household income over $75k).
Podcasts are here to stay. However, like so many emerging technologies before it, podcasts were initially viewed as a niche outlet for those on the outskirts of mainstream media. While much of the general population has come around, traditional advertisers and organizations are still somewhat hesitant. A majority of podcast advertisers are mid-sized online product/service companies with a focus on direct response. Think Squarespace, Naturebox, Stamps.com, etc. It’s only fitting that those innovative and contemporary businesses would invest in an innovative, contemporary and evolving form of media (podcasts). Larger, non-direct response focused companies have only begun to dip their toe in the podcast pool, and understandably so.
Data and measurability are two vital components that often determine the success of an ad campaign and it is here where podcasts stumble. Impressions are almost exclusively gathered based on the number of times a podcast is downloaded. But what about those who listen to it live as it streams? And what about the listener that downloads a podcast and never listens to it? For podcasts to truly appeal to large brands, they must ditch data based solely on downloads and incorporate a mix of streaming data as well. From a media buyer’s perspective, setting up a meeting with a podcast representative to go over download data is out of the question. We media buyers need information and we need it fast. The measurability available on streaming podcasts allows media buyers to access information immediately and even gives insight into the listening audience’s behavior and patterns.
Like any emerging technology, podcasts are still ironing out the details when it comes to advertising and garnering advertisers’ interest. While podcasts have emerged from their humble beginnings as far as the general public is concerned, they still have work to do before Kleenex and Coca-Cola start investing. As podcasts continue to push a focus on clear and representative data (Triton just launched an ad platform for podcasts), media buyers and advertisers alike will begin to fall in line with the general public. It’s only a matter of time.