“The Sell Sider” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Rachel Reed, senior manager of innovation, and Jessica Roelant, director of ad product, at Meredith Corporation.
As audio measurement and ad tech finally catch up to digital standards, podcast advertising is shifting from an experimental channel to a key pillar for many marketers. But the path to monetization can be challenging, especially for smaller podcast publishers that can’t compete with the scale of large audio networks. These publishers need to capitalize on their brand equity and reach across other platforms to create extended listening networks and effectively monetize their own audio content.
Dynamic Ad Insertion (DAI), introduced in 2014, allowed for podcasts to transact on impressions and paved the way for more measurable ad buys. While this was a step forward for the industry, the financial benefit heavily favored a handful of audio networks capable of supporting meaningful listenership volume.
These networks have focused on building consolidated inventory, capturing growing demand and ad revenue. Podcasters must often agree to a shared revenue model or high ad serving fees that favor the network in order to participate. Networks benefit from their collective scale, whereas a participating publisher can only monetize against their own audience. Scale is key to success in any CPM-based industry, and with 98% of available podcasts receiving fewer than 19,000 downloads, there is a significant barrier to entry for the majority of creators when it comes to achieving meaningful, independent revenue.
A number of big players in the audio space are seeking to vertically integrate, owning all facets of the business from creation and distribution to listenership and monetization. Last week’s news that Amazon is considering an acquisition of the world’s largest independent podcast publisher, Wondery, is just the latest example of this trend.
Spotify has been on an acquisition spree, buying tech and production companies including Megaphone, Gimlet Media, Parcast, The Ringer and Anchor, and signing exclusive deals with the likes of Joe Rogan, the Obamas and Kim Kardashian West. These moves illustrate Spotify’s evolution into an impressive walled garden of more than 300 million subscribers, proprietary data, advanced ad tech and promotional power – which could stifle competition.
Apple, leveraging both its early foray into podcast distribution in 2005, and its pre-installed iPhone listening app, boasts roughly 60% of podcast listenership in the United States. While Apple is mostly a passive distributor leaning into its holistic promise of data privacy, the company would be well-positioned to succeed if it were to dabble in podcast production and data-driven advertising.
For publishers without significant and steady listenership, monetization will likely require joining the ranks of a platform or network. As a participant, independent creators can leverage the network’s advertiser demand and benefit from distribution and promotional power, but this often comes at a high cost. When the creator supplies the IP, premium content, trusted brand name and access to talent, it can be frustrating to face limited options to extend reach and find financial benefit.
This is why publishers need to lean into their cross-channel scale to drive meaningful revenue in the audio space.
One option is to convert digital written content to playable audio. A number of startups are offering AI-powered solutions to do just this, with both increasingly convincing artificial voices and even text-to-speech voice cloning products that generate a “replica” of a specific person’s inflection, tone and accent. Users are becoming more familiar and likely to engage with the option to “read or listen” to an article onsite. That said, AI-driven solutions should not take the place of human conversation and dialogue featured in podcasts. But expanding owned and operated audio networks through low-lift solutions such as these would allow a publisher to bundle their traditional podcast inventory with significant scale via onsite audio players, and extend digital targeting capabilities to their audio offerings.
Publishers can also drive audio revenue by capitalizing on the existing platforms where they have both scale and equity. For instance, they might tap into their brands’ reach and authentic connection with audiences across social channels, delivering audio content directly to targeted users across Facebook, Instagram and Twitter. This strategy enables audio publishers to maximize yield per episode, and find new audiences who may already have an affinity for their brand but who may not have discovered their podcasts organically.
Extending podcast distribution beyond listening apps also allows publishers to capitalize on a true differentiator that separates a direct buy from a targeted or programmatic network buy. Podcast publishers are able to offer host-read, contextually relevant integrations, which have been proven more effective when it comes to both recall and action taken. Partners can also benefit from knowing exactly what content their creative will surround, and can secure sponsorship exclusivity or a guaranteed share of voice. With added social distribution, publishers can incorporate targeting to select audiences, and offer sponsors the brand-lift that comes from aligning with trusted social content.
The future of podcasting will be brighter for creators, listeners and advertisers alike if we continue to push for growth and innovation in the digital audio space, and encourage a broad range of players across production, distribution and monetization to help guide us forward. For publishers and podcasters, creatively diversifying audio revenue should be a priority as we look ahead to a world full of listens, and hopefully, ad dollars.