Podcasting continues its meteoric rise, creating more opportunities for marketers
Challenges remain for the fledgling industry, but there is ripe opportunity for advertisers to engage with captive and motivated audiences.
Podcasting continues its rise in popularity, and advertisers are taking note. A Nielsen Fanlinks survey last quarter showed that the number of self-identified “avid” podcast fans rose from 13 million homes in 2016 to 16 million in 2017 — a 23 percent increase. An Interactive Advertising Bureau (IAB) survey earlier this year found that podcast revenues topped $314 million in 2017, an 86 percent increase from 2016.
With a growing number of households tuning in to podcasts on all types of subjects in every imaginable genre, there is ripe opportunity for marketers to engage a captive audience. But in the absence of third-party measurement verification and given the other challenges the relatively young sector faces, some marketers have stayed away.
The podcasting world has no audience buying standards like GRPs, but there are third-party sources available to help brands identify which types of podcasts they should target.
For example, Nielsen’s Marketer’s Guide to Podcasting for Q3 2018 ties users’ podcast genre and content preferences to their purchasing behaviors. To take one genre, Nielsen says there are some thirty-seven million avid fans of music podcasts in the US. These listeners happen to index higher for purchases of beer, liquor, pet care, tea and baby food products, according to the report.
The report also notes that podcast fans are heavy grocery shoppers in general — buying $10.8 billion of snacks annually. Also among the top five purchased categories are pet food ($8.8 billion), paper products ($8 billion), cheese, bread and baked goods ($7.9 billion) and carbonated beverages ($7.4 billion).
Tony Hereau, vice president of Nielsen Audience Insights, told me that insights from the report “directly connect [podcasting] fan buying power with brand purchases.”
“The medium is still new and some (not all) advertisers are looking for huge reach vehicles. On the other hand, podcasts provide niched highly engaging environments for advertisers to be present in,” Hereau said.
Advertising intelligence platform Exponential also recently issued a report on podcast listeners that could be useful to marketers. For instance, 38 percent are likely to have children in the household with infants; 21.5 percent are more likely to make investments and three out of five podcast listeners are male.
Some marketers are still tentative
Hereau lamented the lack of podcasting measurement standards, an issue I discussed with Podible Chief Executive Sheldon Smickley earlier this year. The IAB did release measurement guidelines in late 2017, offering guidance to advertisers on how to measure, but no entity such as the Media Ratings Council (MRC) provides third-party standards at this time.
Brands that are engaging in podcast advertising are using measurement tactics as old as direct response itself such as custom codes — in this case URLs created for each podcast — to try to track ad engagement from each podcast.
Hereau said the “lack of independent third-party measurement has been keeping many major national brands on the sidelines from taking advantage of podcast advertising.” Concerns around reach and inventory have also caused marketers to take pause before sending their ad dollars to podcasts, he said.
The medium of podcasting is somewhere between the definition of AM/FM radio and digital media. An advertiser can run the same spot they have created for AM/FM radio but they have no traditional reach, frequency or GRP estimates in podcasting. From a digital media perspective, you can use downloads as a proxy for impressions but you lack demos and addressability. Many national brand advertisers have been able to justify their investment in podcast advertising with brand lift studies conducted at the end of a campaign. This seems to be the one area both buyer and seller can agree on.
Advertisers can also get frustrated with limited ad formats and lack of programmatic platforms through which to buy. According to the IAB, most podcast ads are host-read, which offers credibility and intimacy, but doesn’t scale well.
“These ads are often read as part of the program and may include an endorsement,” said Anna Bager, executive vice president of IAB’s Industry Initiatives. “Other ad types are announcer-read ads, and other pre-produced ads that can be automatically inserted into the program. Lastly, some advertisers repurpose radio ads.”
Programmatic buying is still limited in the podcast space, Bager said. She told me that most ad buys are “made by brands and agencies working directly with sellers, many of whom are platforms that aggregate and sell a number of podcasts.”
A new testing ground that “should be included in any media mix”
Social media speaker and consultant Neil Schaffer says podcasting should be included in any media mix — but said it might take some experimentation to get the balance right.
“Podcasting leverages another medium, in this case, audio, as a way to spread content, points of view, thought leadership and influence to an audience that listens to them,” Schaffer said.
“As for advertising, sure, because so many listen to podcasts, similar to how you might advertise on YouTube, you should consider advertising on podcasts and experimenting to see what results come from it,” Shaffer told me. “A lot of podcasts have sponsorship packages for brands that allow them to sponsor a podcast and, in essence, advertise there. But these engagements could also be considered influencer marketing-type of arrangements where the advertising could be a lot more strategic for the brand.”
IAB’s Bager told me that she doesn’t expect the industry to stop growing any time soon. “With podcast revenues in the US forecast to grow 110 percent by 2020, we don’t see a plateau any time in the near future,” Bager said. “There is plenty of room for continued growth in terms of listeners and listening, as well as in terms of advertiser investments.”
Bager said that that “at IAB we see digital audio exploding in popularity with expanded listening options like smart speakers, connected cars, and smartphones that make listening to our favorite content a constant in our lives.”