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The Download on Podcasts: Arguments for and against brand advertising in podcasts

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As much as podcasting has accomplished in its two-year resurgence as an increasingly popular and mature content business category, there is a preparatory feeling to the young industry. Major challenges seem to stand between the present and a potential future in which “big money” buys into podcasting as a category standing alongside video, display, and radio.

The challenges are related to delivery and measurement. Advertising is a data-driven ecosystem, and podcasting data are rudimentary compared to other categories, especially podcasting’s cousin, streaming audio. (Terrestrial radio’s data is shockingly blunt, but at least its impressive reach is well established in buyers’ minds.)

Data Stranglehold

The data stranglehold in podcasting is the result of its history as a download medium that is indiscriminately distributed. In other words:

  • Podcasts are historically downloaded for on-demand listening with or without a connection.
  • Those downloads can happen in a multitude of consumer apps, Apple Podcasts being the giant among them.
  • RSS (Real Simple Syndication) is how podcasts are pulled into apps for downloading. RSS does not collect any information about what happens after an episode is downloaded.
  • Podcast producers, networks, and hosting companies don’t have much usage information (such as actual ad impressions) to give advertisers.

The “black hole” problem is baffling to data-fluent advertisers who plan their campaigns on sophisticated software dashboards that chart smart impressions to targeted consumers in real-time.

Direct Response

Podcasting has ingeniously built its growth to date on direct marketing (DR) sponsors, where engagement data is created by listeners entering special codes on sponsor sites. That doesn’t track impressions, but does spell out conversion metrics, which is where the rubber really meets the road for online service companies. Mailchimp, Stamps.com, Squarespace, and some other podcast pioneers have become legendary for their successful adoption of podcast marketing.

National brand campaigns often emphasize awareness lift as much as, or more than, lead conversion. Those companies need to understand audience as a whole, existing across podcast networks, each of which is able to tell a network-specific audience story. (Incomplete because of the download problem through distributed apps, but the basic download count can be accurate from server logs.)

Because each network can build its own business in this manner, some do not particularly want to see a measurement standard take hold. That sentiment could remain in play for as long as direct response ad rates remain high for popular podcasts.

No Consensus

Some podcast pundits are also not seeing the religion of brand advertisers piling into podcasts. Nick Quah, author of the Hot Pod newsletter, recently wrote: “Does the podcast ecosystem actually need brand advertisers to function as a legit industry? This question is worth some debate, but I’d argue it isn’t that essential. There’s an entirely plausible future where the podcast ecosystem runs on a rich marketplace of direct and local advertisers powered by dynamic ad insertion technology.”

That vision foretells a content industry that is robust, but held down to a relatively small scale. Even in its maturity process, podcasting retains a kind of chuminess based on the host-listener trust which makes host-read direct response testimonials so effective. national brand advertising, especially if it brought a wave of radio-style pre-recorded generic spots, would change the atmosphere, and likely lower CPMs as it enlarged the general pool of money.

A contrary vision lies in fixing the measurement problem so that advertisers of all sorts can understand what they’re buying, and consider a total audience across networks. That vision was recently articulated to RAIN News by Sean Carr, founder/CEO of the hosting platform Art19. Art19 is developing a new API-based delivery mechanism which potentially displaces RSS and sends back more information about podcast listening. Carr talks about “unlocking the floodgates — buying agencies are held back by lack of listening data.”

Podcasting is at a fork in the road. One trail leads to continuation as a relatively small content industry with specialized marketing opportunities for companies of all sorts that can optimize their messaging for the known aspects of the audience. The other path raises podcasting to compete on even footing with data-rich ad venues like streaming audio and video. Time will tell.

 


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