Next Up For Podcasts: Programmatic Native Advertising

155When “Serial” broke the record for the fastest series to reach 5 million downloads, it created new interest in podcasts as an advertising forum.

Though podcasting still has measurement hurdles to clear, it’s attracting more attention from larger advertisers.

“Early on with any kind of new advertising medium, there are going to be institutional advertisers who are hesitant because they want to see things proven,” said Lex Friedman, EVP of sales for Midroll, a podcast ad network. “We’re at the point where we’re hearing companies like Heineken, Ford, Random House, Dropbox and The New York Times on podcasts.”

There are two types of advertisements you’ll likely hear on your favorite podcast. The first is injected at the time of download or while people are streaming. This method solves some of the common measurement problems associated with podcast advertising, and it’s also cost efficient and scalable.

But that’s not the type of ad that’s going to turn MailChimp into MailKimp. If you want audio’s version of native advertising – that is, the podcast host doing a live read of the ad (and this is Midroll’s area of expertise) – that’s going to be more costly and more time-consuming.

“We’re largely immune to banner blindness because the ads are written to be more engaging,” said Friedman. And because they’re baked into the content, they’re not easily skippable.

“Podcasts are a tremendous way to get folks to hear your name,” said Lain Shakespeare, marketing manager at MailChimp, a Midroll client. “Beyond that, brands have an opportunity to develop relationships with audiences in a really intimate and meaningful way because audiences that choose to listen to podcasts tend to be passionate about what they’re listening to.”

In a recent poll by Midroll – which represents north of 200 podcasts and 240-plus active advertisers – 100% of survey respondents would recommend podcast ads. Those respondents represent 20% of Midroll’s advertisers.

But that underscores another big problem with live reads: There’s a premium inventory crunch, according to Friedman. Sixty-second spots on “WTF with Marc Maron” have sold out for November, for example, and though there are 14 sixty-second spots left through the end of year, producers don’t want to increase ad loads.

“Pricing will always be high and inventory will always be tight with the most popular personalities,” said Michael Dougherty, CEO of Jelli, a programmatic audio platform.

“If you look at programmatic across broadcast and streaming audio, there’s less inventory available than there is demand from advertisers,” said Dougherty, adding that this year will be about bringing more inventory online.

Limited ad inventory isn’t the only concern. Podcast personalities sometimes steer into controversial territory and large advertisers may shy away from investing in the medium to safeguard their brand’s image.

But the bigger elephant in the room is measurement.

“Digital advertisers would love to have impression-based measurement, and we can’t do it,” said Friedman. “We can only measure download figures.”

So can advertisers have both?

Using programmatic platforms to serve pre-recorded messages tailored by radio personalities is the next stage of programmatic audio, according to Dougherty.

“What that entails to facilitate it at scale is the ability to handle a significantly larger number of ad creative copies per campaign and the ability to ensure that the creative was produced properly,” Dougherty said.

“Its almost a programmatic creative problem as much as it is a delivery problem,” he added.

It’s early days, according to Dougherty, but once solved the programmatic platforms would in theory serve all the creative being crafted by personalities to the right audience in the right location at the right time.

“Programmatic audio that is pre-recorded can be tailored to audience segments, said Dougherty. “It has scalability because you can tweak ad content and push it out to large segments in a rapid fashion without having to coordinate with talent or local resources to be able to execute the campaign.”

Midroll does have tools for advertisers to build their own plans, but the number of advertisers leveraging programmatic options is “a very tiny sliver of our business,” said Friedman. For now, “A single-digit percentage of our advertisers are doing that.”

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