Podcasting is officially on the radar of media buyers.
The Interactive Advertising Bureau’s (IAB) second annual Podcast Upfront in New York City – held Wednesday with twice as many presenters and attendees as last year’s inaugural event – underscored the growth in the sector.
Yet measurement beyond the download metric still poses a major challenge – one of the reasons why direct-response advertisers have largely dominated the space, said Matt Turck, chief revenue officer at Panoply, a podcast network created by Slate.
The IAB took a step toward solving that issue Tuesday by releasing a set of podcast advertising guidelines to help clear up discrepancies around podcast measurement nomenclature.
“For brand advertisers to be successful they need to compare apples to apples,” Turck said. “Their digital teams are looking for KPIs in measurement and data that they can take to clients to see what’s working and what isn’t. It’s more difficult to show.”
Podcast ad net Midroll Media can measure listen-through on podcasts served by Stitcher, which the company acquired in April, said Midroll CRO Lex Friedman. But that’s only a small chunk (2-7%) of all podcasts to which users are listening. About half (42-53%) of listeners access podcasts through Apple, which doesn’t share listen-through data.
Despite gaps in measurement and reporting, publishers are launching podcasts like crazy. Time Inc., for example, has announced a host of new podcasts it will launch next year.
These shows have considerable reach. HowStuffWorks, for example, is on track to break 50 million monthly downloads across its six shows by 2018. WNYC sees 30 million downloads per month across its shows, with 80% ad recall.
“I’m not concerned about reach,” said Charlie Fiordalis, chief digital officer at agency MediaStorm. “There should really be no concerns about the size of podcasting. It’s a medium that has grown up very quickly.”
Podcast advertising is dominated by direct response, and it’s effective. According to research released Wednesday by the IAB and Edison Research, 95% of listeners take action after listening to a spot.
Sixty-five percent of listeners are more willing to consider purchasing something they learn about through a podcast, according to the IAB and Edison Research. Sixty percent prefer to buy products from companies that advertise on their favorite podcasts, 45% will visit a sponsor’s website after listening to a podcast ad and 43% consider making a purchase.
Agency Performance Bridge, which represents direct-response clients in podcast advertising, has seen a huge uptick in competition in the past couple of years, said CEO Stephen Smyk.
“Ten years ago if we wanted to be on the show, we could be on the show and we could set our own pricing,” he said. “Today there are a number of folks buying podcast advertising, so we certainly see more competition.”
And for MediaStorm, the value of podcast advertising is clear.
“Podcasting is an area where there’s a lot of value to be had because it’s not an oversaturated environment and there’s a lot of audience authenticity,” Fiordalis said. “I want all of my brands to be in podcasts.”
Programmatic Podcasts: Not So Picture-Perfect
But podcast advertising needs to strike a certain tone.
“The ad has to be authentic and transparent,” said Jason Hoch, chief content officer at HowStuffWorks. “Once you are super honest with your audience, they move quickly into the content. There’s a higher expectation around authenticity.”
Podcasts aren’t yet ready for programmatic buying as there’s not enough inventory to justify it. But a handful of podcasts use a data-driven serving mechanism called dynamic ad insertion, which stitches in ads based on listener data at the moment of download.
But even dynamic ad insertion can be risky.
“We are typically hearing from advertisers who are the biggest, longest-term folks in the space [that they] are concerned about insertion,” said Midroll’s Friedman. “The networks that force them to move to insertion are seeing performance worsen.”
Fiordalis is also a skeptic: “You have a much better chance of having a positive experience aligning yourself with a couple of podcasts rather than Stitcher or dynamic insertion. Take advantage of the fact that you have someone’s attention.”
Clarification: This piece previously referred to dynamic ad insertion as a precursor to programmatic. Dynamic ad insertion doesn’t involve the media buy, it’s the mechanism by which an ad is served based on listener data.
