A decade later and podcasting is still a rising medium. About 45 million Americans listen weekly and 70 million do so monthly. That’s higher than movie attendance. And with 350,000 podcasts to choose from, there’s a podcast for any interest or obsession.
There have been some legitimate breakout stars, too. The first season of “Serial” became a national obsession, with more than 230 million downloads. Marc Maron’s “WTF” has become a must-have promotional spot for everyone from President Obama to Norm MacDonald. The podcast “Missing Richard Simmons” briefly launched hundreds of news reports about whether the former exercise mogul had been kidnapped by his own housekeeper.
Advertising on podcasts is also growing fast, albeit from a minuscule to a tiny level. According to report by the Interactive Advertising Bureau and PricewaterhouseCoopers, podcast ad revenue has grown by 85% since last year and is on track to reach more than $220 million in 2017. But that’s only about 1% of the total ad market — not much penetration for a decade-old medium. How, then, do we increase the value of those ads and make podcasting more profitable?
I’ve been listening to a lot of podcasts, which means listening to a lot of podcast ads. There are two trends that demonstrate this is still a nascent medium. First, there’s a remarkable dearth of ads from traditional mainstream advertisers. I’ve recently noticed that American Express and Gillette have started to dip their toes into podcast advertising, but most advertisers are e-commerce companies or low-end brands: Squarespace, Stamps.com, Harry’s.com, Blue Apron, etc. All great products, I’m sure, but nothing you’d expect to see advertised on a network TV show.
I also can’t help but notice that almost all the ads are read by the show hosts. The previously cited study claims that these host-delivered ads are the “most effective,” whatever that means. I doubt the research is definitive and it wouldn’t surprise me to learn that same argument was made back in the 1950s, when TV hosts routinely plugged advertisers themselves.
To me, a medium in which the hosts still read the ads reeks of amateur hour. And to make matters worse, most of these ads direct listeners to a website where they can plug in a promo code to make a purchase and give the podcast credit for the sale. This is like the early days of the internet, when pop-ups were judged by their click-through rates.
Podcasts won’t be a mature advertising platform until major brands like Coke and Procter & Gamble decide that podcasting is a good space for professionally produced brand-building ads. And that won’t happen until there is good ad measurement to ensure that people are actually listening to their commercials.
Today no advertiser knows what the audience is for a podcast. The standard measurement is downloads, but that doesn’t tell you anything about actual consumption.
I subscribe to both “Fresh Air” and “Serial,” two of the most popular podcasts. I listen to about 10% of the “Fresh Air” interviews, but have consumed every second of both “Serial” versions. But that’s me. Maybe there are others who dote on Terry Gross’s every word. Only a metric that actually measures listens will tell us.
Podcast ads face another challenge too. In television and radio, you can more or less assume that the ”average audience” for a show (which is the average number of people listening at any time during the entire episode) is more of less the number of people consuming the ad. That’s because TV viewers and radio listeners are constantly tuning in and dropping off, so consumption is roughly the same throughout the entire length of the show (unless there’s a large amount of DVR playback.)
But hardly anyone will start listening to a podcast halfway through playback. And in certain genres, like celebrity interviews, the drop-off can be pretty significant. I’ve almost never made it all the way to the end of a Marc Maron interview, for example, and have no idea whether there are even any ads at the end of his show.
The most obvious company to measure podcast consumption is Apple, which provides the major platform for podcast downloads. If the company could capture podcast playback on
iPhones, it would have the closest thing to a census-based (as opposed to panel-based) measurement that the media industry has ever had.
The next most obvious candidate to measure podcasts is Nielsen, which has the experience, methodology and technology for the job.
As it turns out, both companies are working on some form of measurement. Apple has announced it would begin giving creators consumption metrics and Nielsen has begun to offer general insights on the buying habits of podcast listeners, with more detailed numbers reportedly on the way.
If these two
companies can come up with reasonably credible metrics, then podcasting might finally take off as an advertising medium. Ironically this might mean fewer podcasts as advertisers flock to the
biggest shows and leave the scraps for everyone else.
But more money in the medium can only mean a higher overall standard for all. Bring it on!
Podcast business is increasing, that's for sure. Even for small podcaster like me. Lately, many tools provide great ways for monetizing shows, without needing for large number of downloads. For example, Voxnest Dynamo is a kind of Google Adwords for podcasts: the tool inserts ads during podcasts, and the showrunner get paid based on number of downloads. You just have to choose were to place the midroll, and Voxnest will add starting roll and end roll to any podcast you have.