“The Sell Sider” is a column written by the sell side of the digital media community.
Today’s column is written by Jon Stephenson, Founder and CEO of SoundStack.
Have you ever experienced a multicourse meal prepared by an amazing chef and realized you can’t go on because you’re too full? There’s more value to get out of the experience, but natural limits dictate you’ll only go halfway.
While podcasting is projected to hit $3.1B in revenue in 2023, a different stat may wow you even more: podcaster adoption of dynamic ad insertion (DAI) increased from less than 50% in 2019 to a whopping 84% in 2021.
Why? Efficiency. Automation makes it easier to manage advertising. It’s also because podcasters realize that DAI gives them options that make serving the best possible ad more likely.
But for podcasters to get the most value out of DAI, they need an open environment. More openness means more options. Using DAI within a walled garden makes it harder to get the full benefit of great innovation. It’s like getting just half of a great meal.
DAI breeds flexibility – in open environments
The rise of DAI and programmatic go hand in hand – both are predicated on the idea that open access to more demand means more chances to maximize the value of every ad impression.
Dynamic ad insertion makes podcast advertising more flexible and efficient by serving an ad automatically when an episode is streamed or downloaded. In that case, variables like a listener’s location or the timeliness of a message are taken into account and increase the chances of a “better” ad than one that’s been prebaked into an episode.
Part of the reason why podcasters work with the largest platforms like Spotify and iHeart is to get access to great tools like DAI. After all, there are gardens within those walls! But the irony is that, as the biggest platforms are built to increase their own value by locking in supply and demand, their flavor of DAI naturally limits the variety of takers for a given ad.
Recent news has reinforced that exclusivity has its downside. After all, walled gardens represent just part of the podcast market. For many podcasts, limiting options to reach people outside the wall means they won’t survive.
And it’s not just about access to certain shows. Just as the “big three” podcast platforms have acquired content, they have also acquired technology to deliver and monetize it. As a result, these platforms exert a great deal of control over the technology their publishers can use.
Take display advertising. Publisher sites that run Google Ads don’t have to host their sites on Google even though it serves their ads. Podcasting is different. People typically listen to an entire episode with ads already stitched in. Delivery and monetization are intertwined.
While a podcaster’s walled garden host might allow dynamic ad insertion, that hosting platform controls what gets served. If the best ad for a given impression lives outside the wall, your listener won’t hear it. And you’ll arguably earn less revenue. It’s DAI half-realized.
Unifying disconnected gardens
Wouldn’t it make a podcaster’s job easier and options for monetizing content more abundant if multiple platforms were connected seamlessly through common protocols?
Standards like VAST and openRTB do exist and are growing programmatic podcast advertising. But due to how podcasts are delivered and consumed, interoperability between platforms isn’t easy. Each of the big podcast platforms has its own unique interpretation of how standards should work.
Plus, technical challenges like ad timeouts become further rationale for big platforms to keep inventory within their walls.
Nevertheless, the podcaster – the creator – must be nurtured. Embracing programmatic and the technologies that support it, like DAI, gives podcasters more avenues to grow. But innovations are only as valuable as our ability to make the most of them.
It’s time the industry matures beyond walled gardens in favor of an open garden party where podcasters flourish.
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