Podcast ad market needs sophistication at scale to capture brand budgets
Opinion
We need curated, scalable media buys for podcasts. The market shouldn’t have to wait too long for this to become reality.
It was recently suggested that podcasts are a long-tail medium that need a long-tail ad solution. Marketers are familiar with the concept of Pareto’s Law, stating that 80% of the effects come from 20% of the causes. It’s fair to say that the contemporary podcast ad market is like Pareto’s Law on steroids.
Huge numbers of listeners – and advertisers – are concentrated around a handful of popular shows. If I had a penny for every time a client mentioned Joe Rogan, I’d be a rich man.
Edison Research has estimated that advertisers could reach a third of all podcast listeners in the US simply by placing ads on the 10 biggest podcasts. With such a tiny number of massive podcasts driving the volume of listeners, there’s then a very long-tail of moderately popular podcasts which, as it stands, are not cost effective for advertisers to buy individually.
I agree the ad industry needs to find a way to package that long-tail (of often excellent podcasts) into a scaled commercial proposition that can then attract the deserved ad spend.
Listen up
Podcasts are an appealing format for advertisers for a variety of reasons. In the first place, they deliver a highly engaged audience in an environment where, typically, there isn’t a huge volume of ads.
It’s also a completely lean-in active choice for listeners. Noone listens to a podcast by accident. You have to go and look for it and, usually, it’s a topic that particularly interests someone. For example, if you’re listening to a cooking podcast, we can logically assume that you enjoy preparing home-made meals.
Placing your brand message into that sort of environment with improved cut-through, super engaged audiences, and on a welcome topic, amplifies the message’s power immensely. Make no mistake, as an advertising medium, podcasts are exceptional, and all the indications are that the public will continue to consume more podcasts than ever before over the next few years.
The challenge from an ad perspective is how marketers can scale their buying of podcast inventory and get all of those wonderful advantages in a quick and efficient way.
Putting it in context
Right now, there’s a lot of buzz about podcasts in the ad industry, but if you compare the reach of podcasts to broadcast radio or TV, it’s still relatively small. Advertisers recognise the cut-through and the excitement of the podcast proposition but want to be sure they are reaching the sort of numbers to make their efforts worthwhile.
Fortunately, technology is emerging that will allow advertisers to buy podcast inventory in a scaled and efficient way by categorising quality long-tail podcasts around context and genre. For example, most advertisers would consider it reasonable to group football, rugby union, and F1 podcasts into a ‘sports’ category. It becomes more difficult when you try to categorise more generic podcasts, however, which can vary massively in terms of tone, content and target audience.
The acceleration in technology has made podcasting an even more attractive proposition to advertisers. First-party data can help with understanding listening behaviour, which can be complemented by smart technology to understand the context of any given podcast. In turn, transcription technology allows publishers to understand the content of each podcast episode, enabling advertisers to target conversations within podcasts that are more relevant to their brand KPIs.
It is right to call for the ad industry to better present podcasts in the form of genre and context packages, while leveraging technology to create curated, scalable media buys. However, my addendum would be the market won’t have to wait too long for that to be a reality.
Charlie Brookes is chief revenue officer at Octave, a digital audio joint venture between Bauer and News UK