That podcasts have successfully staked their ground in the downtime habits of tech-savvy, time-pressed and—crucially—enthusiastic individuals in an environment filled with smart tech and screens is remarkable, to say the least.
Podcasts offer listeners curated, relevant content to be consumed at leisure. For hosts, the medium brings opportunities to reach listeners with similar interests, while unencumbered by the need to cater to any one geography, interest group or time slot. To brands and marketers, therefore, podcasts offer targeted and engaged audiences. Yet despite this format being around since the early 1980s, podcast analytics remain in their infancy. With the US leading on the research front, and APAC slowly delving into the subject, there are many learning curves ahead.
In recent decades TV guides have swelled to hundreds of channels. The next wave of viewers, however, is demanding a return to simplicity: fewer options, more control and a mutually agreed arrangement between paid services and advertising.
As TV moguls race to navigate this disruption, using data to learn more about the modern viewer, one might expect audio programming to be left behind. Not so. Podcasts offer listeners the luxury of ‘tuning in’ to hear what they want to hear, when they want to hear it, playing directly into today’s tastes. This represents a massive opportunity for marketing creatives.
The Interactive Advertising Bureau (IAB) and PwC anticipate that by 2020 the global market will be worth US$650 million, up from US$314 million in 2017
“Podcast audiences are highly engaged, tuning in for both the programming and the adverts within it,” explains John Rosso, New York-based president of market development at digital audio technology and advertising company Triton Digital. Triton Digital is based in Los Angeles and works in over 35 countries with audio publishers including Spotify, CBS Radio and ESPN Radio. “Listeners tend to put trust in their favourite hosts, making podcasts an effective channel for delivering messages and furthering their receptiveness to the brands that the hosts decide to endorse,” he adds.
While podcasts and radio programming both give hosts a platform to reach their listeners aurally, traditional radio advertising messages may not necessarily translate perfectly across to podcasts. Radio broadcasts reach people within a certain geographical area, battling for attention against multiple other adverts.
Podcast adverts, however, can target narrow interest groups. They can also be delivered personally by the host, and shows are rarely saturated with adverts. According to US-based podcast advertising management platform AdvertiseCast, radio listeners can expect to hear one minute of advertising content every six minutes, compared with one minute of advertising for each 30 minutes on podcasts.
“Brands should strongly consider advertising in podcasts as it enables them to reach more of their desired audience in a targeted, resonating manner,” says Rosso. “By aligning their brand with a like-minded podcast host or programme—for example, an exercise apparel brand advertising on a health and wellness podcast—they can rest assured that their message is reaching the right audience, on demand, at a time and place of their choosing.”
Brands should also consider which type of podcast advertising spot will best suit their message and overall goal, whether an endorsement read by the host during the show (a ‘baked-in’ advert’), a feature spot within the show, or a pre-, mid- or post-roll advert, played before, during or at the end of the recorded podcast.
“‘Baked-in’ adverts will live within the show’s content in perpetuity, without risk of being replaced or removed at a later date,” explains Rosso. “‘Dynamically inserted’ advert spots are stitched into the podcast content and can be replaced, allowing for the continuous monetisation of back-catalogue content as it keeps the adverts within each podcast episode from ever going stale.”
Great – but how effective is podcast advertising?
Data about podcasting is more scarce than other mediums. Little is known about how listeners interact with podcast episode files after downloading them from podcast platforms, which include the familiar—Spotify, SoundCloud and iTunes—and the less so, such as Buzzsprout and Blubrry.
“Because podcasting is an inherently digital medium, some are expecting traditional digital attribution and success metrics to apply,” says Rosso. “Due to the unique nature of podcast technology, those tactics generally don’t work.”
There is, however, “a wealth” of offline research that supports podcasting’s efficacy, and a “very high” return rate for direct brand marketers, he notes. (Most studies are based on US shows, listener habits and advertisers: while listeners from APAC could have been represented within this data, APAC-centric studies are yet to materialise.)
In December 2018, for example, independent advertising evaluator Advertising Benchmark Index (ABX) conducted a study analysing the effectiveness of the podcast adverts of five US brands, comparing them against the brands’ own TV and online video adverts. For the research, which was carried out in collaboration with US mass media company Westwood One, each advert was assessed and assigned a score relating to the clarity of branding, messaging, reputation and call-to-action effectiveness.
Podcast and TV adverts widely gleaned comparable scores for their call-to-action effectiveness, a reflection that fewer TV commercials are being seen these days. “With eyes on a second screen or the audience literally being out of the room, the importance of visual cues carries less weight than what an ad sounds like,” explained Pierre Bouvard, chief insights officer at Westwood One’s parent company, Cumulus Media. “The ABX data proves that podcasts can do it just as well as television can.” The two adverts rated top in call-to-action effectiveness were both podcast adverts.
Last month, meanwhile, media company Panoply Media and audio analytics platform Veritonic launched a partnership in the US aimed at making podcast advertising more effective and sophisticated. Through the union, Veritonic’s machine listening and learning technology will be employed to discover what resonates best with podcast listeners across different demographics and advertiser categories.
An initial survey, in which listeners evaluated a sample of ads run across the Panoply network, found that announcer- and host-read ads scored similarly across the board, though announcer-read ads proved more effective at pushing up purchase intent, driving a 61% boost.
The companies noted that the connection between host and listener is paramount, with high-performing adverts perceived as more authentic, innovative, and modern, and adverts targeted based on demographics and psychographics scoring higher than those targeted based on context.
Podcasting’s continued growth
Music streaming service Spotify acquired two podcasting start-ups in February 2019, an expansion it characterised as the next phase in its ‘audio-first’ growth strategy. In a blog post, Daniel Elk, Spotify founder and CEO, noted that the purchase of podcast producer Gimlet—whose branded podcast division has developed shows for eBay and Tinder—and podcast platform Anchor made Spotify “the leading global podcast publisher,” with more shows than any other company. “With the world focused on trying to reduce screen time, it opens up a massive audio opportunity,” he said.
So what will the future of podcast advertising look like? The Interactive Advertising Bureau (IAB) and PwC anticipate that by 2020 the global market will be worth US$650 million, up from US$314 million in 2017. And with media companies and marketers jumping into research on podcast adverts, the space seems poised for rapid change. “The medium is growing in every dimension, including content creation, audience engagement and advertiser support,” says Triton Digital’s Rosso. “The IAB and others are predicting continued, rapid growth of podcasting revenue, which is only likely to accelerate further given the increase in audio listening across a range of connected devices such as smart speakers and connected TVs.”
Video may have killed the radio star, but it seems its younger sibling—the podcaster—is here to stay.
Podcasting in APAC
As yet there have been no substantial studies focusing on the nature and behaviour of APAC’s podcast producers, marketers and listeners. There are encouraging signs, however. According to Statista, the projected value of podcast advertising revenue in Australia by 2022 will be AU$110 million (US$78.7 million), and an Australian podcasting study bu Southern cross Austero and MarketingMag found that 93% of Australian podcast listeners get to the end of most podcast episodes they listen to. 63% have taken some type of action based on advertising or a sponsorship within an episode.
The Reuters Institute for the Study of Journalism at the University of Oxford also found in their ‘Digital News Report 2018’ that the following percentage of surveyed adults had listened to a podcast in the month prior to the study:
This compares to numbers in the high 10s and low 20s across Europe, a difference Reuters puts down to strong smartphone penetration in the Asian markets, along with high levels of social sharing.