Podcasts are an ideal technology for the always-on-the-go lifestyle of millions of consumers. As their popularity continues to grow, businesses are turning them into revenue-generating marketing tools.
— By Karen White
Podcasting has been a technology waiting to grow in popularity for over a decade, and its time has come. Statistics show that a majority of Americans have heard podcasts, and some people listen every month. It is an ideal scenario for reaching a multi-generational marketplace, and even more enticing is the potential to generate revenue. There are already multiple options for placing ads or directing podcast listeners to a company website, including direct advertising, branded content, and subscription services.
Podcasting is expected to experience continued phenomenal growth because they deliver information quickly and in a way that can be integrated into other activities. There is no need to dedicate time to sit and watch a video or television or to read information. Consumers can listen to podcasts while driving, eating lunch, waiting in line, cooking or relaxing.
From Audio Blog to Advertising Venue
Podcasting has been on a more than a decade-long path to popularity, and now it is barreling toward its zenith. Digital age consumers like their information delivered quickly and efficiently via technology, and they also prefer mobile accessibility. Podcasting fits every requirement.
Podcasts were first posted primarily as short audio blogs by individuals. Since then they have become big business. Edison Research and Triton Digital consumer research found there are more than 62 million Americans listening to podcasts on a weekly basis; 70 percent of Americans over 12 years old are familiar with podcasting; and 90 million people listened to a podcast in the past month.
The same research identified that 87 percent of respondents are listening to podcasts because they can do other things while listening. Eighty percent enjoyed them because podcasts are portable, and 78 percent said they like them because a person can listen wherever they are located at the time.
Podcasts really exploded in popularity when people and businesses understood they could make money via podcasting through advertising. When Edison Research and Triton Digital asked how listeners related to commercials in podcasts, 17 percent said they were much more likely to consider the brand and 37 percent said they were somewhat more likely, meaning over half the listeners are paying attention to the ads.
From Ads to Revenues
Brands have an enormous opportunity to grow revenues through podcasts and already have a number of ways to monetize them. Projections in the June 2019 “Podcast Ad Revenue Study” found that self-report revenue will grow to $694 million in fiscal year 2021 and more than $1 billion in market value. Podcasters are charging advertisers more than the ad rate for broadcast radio but significantly less than television ads. A popular podcaster has a big market presence.
The message is clear: Podcasts are a gold mine for potential monetization. For businesses, the key is to choose the right podcasts or podcast network for their target market and/or to develop their own podcasts that drive market interest.
Like most technology tools, its uses for business have evolved, particularly in the area of monetizing. There are a number of ways to monetize podcasts to obtain direct listener revenues.
The most obvious way is to identify podcasters who have a large audience of consumers the business typically targets in its marketing campaigns. The business pays the podcaster to advertise their products and services, mostly via host-read ads, but other forms of advertising are emerging. AdvertiseCast helps companies develop creative messages with key talking points. When podcast ad space is purchased, the ad is heard on all major publishing platforms and podcast players – Google Play, Apple Podcasts, Pocket Casts, and Overcast.
For businesses, the key is to choose the right podcasts or podcast network for their target market and/or to develop their own podcasts that drive market interest.
Sponsoring or Subscribing
Another option is for a business to sponsor one or more podcasters. The sponsorship enables the leveraging of the podcaster’s expertise to build audience trust.
For example, the podcaster talks about using a particular virtual private network (VPN) and notes the company has sponsored the episode. Then she goes on to explain how she uses it and the value it delivers, which in this case is privacy when using a computer, smartphone, or tablet. This is a clever way to tie a topic of interest (technology) and marketing together without overtly selling.
Branded podcasts are a type of sponsored content. The business pays the podcast production team to develop podcasts that discuss a topic of importance in an industry. The topic is not about the product or service though. The podcast host briefly identifies the brand that sponsored the podcast and may describe the product or service.
A paid interview is another sponsorship option. The podcaster interviews someone in the company in exchange for sponsorship dollars. Usually the topic is related to the mutual interests of the company and the podcaster.
The subscription model for podcasts is gaining popularity. Subscribers pay a monthly fee to a company to access podcasts covering a wide range of topics. The Athletic, a podcast publishing company, offers a mix of free and subscriber-only podcasts. Companies pay The Athletic for podcast ads on a CPM (click per thousand) basis. It is conceivable that businesses could produce subscription podcasts that share expert advice of professionals on relevant topics, especially in highly technical fields.
The Language of Podcast Advertising
There is a lot of terminology in podcast advertising.
For example, a baked-in ad is an advertising message that is part of the podcast content so is always there over the life of the podcast. Listeners will hear the ad no matter when they listen in the future. It does limit ad content because ads for deals like special pricing with a limited timeframe are not suitable for the baked-in ad.
A dynamically inserted ad is when a podcast file request to insert an ad is delivered to a file server, adding the flexibility of having fresh advertising continuously inserted into podcasts.
A native ad is developed by the brand for the podcaster and will promote a product or service. They run at the beginning or middle of the podcast.
A product placement is a casual mention of a product during the podcast, while a direct response ad is when the host reads an advertising script and at the end tells the listeners to take some kind of action, like visit a website or use a coupon code.
Ideally, a brand will advertise on multiple podcasts to get the broadest market exposure.
As podcasts continue to grow in popularity, new revenue generating models will develop. Tracking the metrics of each ad campaign is important to ensure resources are invested in the podcasts and podcast networks with the highest ROI. Metrics can track factors like demographics, revenue generated, podcast listenership, and some listener behaviors.
There are limitations right now as to the data available, but that is likely to change over time. As the podcast industry grows, measurement capabilities will get more sophisticated.