Transcript: Heather Osgood at Podcast Business Lunch: “We have to go to programmatic”


Brad: Heather, thanks so much for joining me today.

Heather: Thanks so much for having me! I’m excited to chat.

Brad: Great!. You are the founder of True Native, a podcast ad repping business that you started in 2016. In addition, you are an active, articulate advocate for the unique values of podcast advertising. I see you all over the internet speaking about this in other shows, so I’m particularly happy to grab a half hour of your time to talk. Thank you.

Heather: Thanks! It’s been so much fun — the podcast industry, and of course, podcast advertising in particular,are just such fascinating. It’s a fascinating business and fascinating topic, so it’s a whole lot of fun to talk about.

Brad: Well, we’re going to get into the weeds. But before we do, let’s go back to 2016 and tell me what you were doing then, and what motivated you to start True Native.

Heather: I had sold a trade show production company that I had for about 10 years, and for the first time in my life, I didn’t have anything to do. [chuckle] Which was very strange for me. And so one day my husband said, have you ever listened to a podcast? And I was like, “Well, no, it’s like such a pain, blah, blah, blah.” He’s like, “I know you’ve got that app on your phone, just listen.” So I started listening to podcasts, and I very shortly discovered that there were all of these podcasts that didn’t have ads in them, and I, of course, questioned why that was. I investigated the industry and found that the top 1% of podcasts didn’t have problems getting advertisers, but there were all of the other shows! I knew from my background selling radio and newspapers for advertising that I had the ability to sell ads, so I decided to go ahead and help those podcasters get advertisers. And here we are six years later.

Brad: That’s interesting. You came from radio; I didn’t know that. So you migrated to podcasting … and I’ll say more effectively and more enthusiastically than the radio industry as a whole has.

Heather: I loved radio, it was really how I started my career, and it’s a great industry, I know it’s changed a ton in the last several years, but being in podcasting is a lot like being in radio, and with audio there is… It’s not always as tangible as we would like it to be, and I think that the struggles can be similar in that, obviously, they’re both audio.

Brad: Let’s talk about True Native’s culture, if I can call it that. Your website mentions authenticity, and you mentioned strategic development. So in those general terms, what are you pitching to advertisers?

Heather: It’s both. It’s the advertiser as well as the podcaster, and in representation of many, many shows, one of the conversations that we have a lot — especially with the prospective podcasters — is about a more personalized relationship. You’ve certainly have marketplaces and very large organizations that are wrapping thousands of different podcasts, and having an authentic real relationship with them is important. That’s something that content creators want. They’ve built this really large audience, and they want to know that someone is going to take care of that audience, which I think is so different from other forms of media. The reality is, is, this podcaster has built a following with blood, sweat, and tears — and they want to protect that following. When it comes to advertisers, we can help walk them through this process. Most advertisers that come to us have never advertised in a podcast before. They don’t know where to start; they don’t know what kind of expectations to set. So when we look at it from a strategic perspective, we want to see what kind of matches we’re making and how do we create a really strong relationship between that advertiser and the podcaster, so that both sides benefit.

Brad: Okay, so it’s mostly newcomers to podcast marketing who are your clients, and on the other side of the fence is it also podcasters who have not yet built sponsored relationships on their own, with whom you’re working?

Heather: That’s a really good question, and it really does vary. We have some podcasters who’ve been doing sponsorship ads for many years, and then we have many who come to us who have never had advertisers, or maybe they’ve had a few advertisers, but they’ve never really been able to get in a rhythm. I had one person tell me the other day, “I’ve been emailing this agency over and over, and they bought from us in the past, but for some reason they are not interested in even responding to our emails.” Our job is to smooth out those paths for them, and to make those connections. So it just really depends on the show, whether they have or haven’t had advertisers.

Brad: What are the advertisers who come to you looking for, if they’re new to podcasting? Are they looking for reach? Are they looking for a topic? Are they looking for a basic education, like “What is this and how will it benefit me”? Are they looking for demographics?

Heather: Really, it’s all of those things. Every advertiser, of course, has a different goal in mind. I think really what we get when we work directly with advertisers is: “Man, podcast advertising is so amazing and everybody says it’s amazing, and I should check it out.” So it’s almost like there’s this intrigue into how can we really capitalize on a platform that we’ve not tried before. I think that’s really the motivator in most cases; they want to get a piece of the action that everybody’s talking about. Oten, they are looking for a response — they want to have a return on their investment. But we also try our best to educate them by saying that, “Hey, this is going to be a great campaign for you, and we know that it’s going to deliver great results, but we also need to use this first campaign as a test, because we don’t know for sure which podcasts are going to resonate best with your product.”

Heather: There can be some good opportunities where, for example, you’re a supplement and we put you on a health podcast. But really there is a lot of trial and error and there are many genres that maybe don’t feel like an automatic match out the gate. And we want to see what is going to work for them. If we can really set the expectation that the first campaign in particular should be about learning lessons, and understanding the podcast industry, and how advertising can work — that’s my top goal, typically.

Brad: OK, you’re the first gate of entry for most of your clients. That’s cool. You’ve got a kind of responsibility and an opportunity to frame the discussion. Now, do you find that some advertisers have fears around it? I’m thinking of brand safety, which comes up in the news over and over again, or any other kind of apprehension that you have to neutralize?

Heather: Yeah. We do all host-read endorsement and ads, and what we’re looking for are these very authentic organic ad reads. A conversation that comes up more and more for us is a proofing of the ad. Typically we have not proofed the ad reads — we get talking points from them, they tell us what they want said, or maybe what they don’t want said, and we send those to the podcaster. Then it’s the podcaster’s job to create a good ad read. Now, we don’t really want to send that ad over to the advertiser and say, “Hey, what do you think before it goes live?” Because what is the first thing everyone does when they get something to proof?

Brad: They change it.

Heather: Right, they find something wrong with it. Exactly.

Brad: Or even if there is nothing wrong with it, they change it.

Heather: Exactly. Even if there is nothing wrong they change it, because their job is to make it better! So we’re trying really hard to get them to understand that we can’t do proofing. That is a big point. Brand safety is certainly is something that is being talked about a lot, and I think that there is a level of apprehension of not knowing what is this host boing to say and whtehr it will align…

Brad: Honestly, they’ve got a point. If I were an advertiser and I were paying for a spot, and I can’t even hear what it’s going to sound like … It is a good point.

Heather: It is! So we ask them to take a leap of faith, knowing that we’re going to do our best to take care of them. In some cases we’ll proof ads internally before they go live so that we know, gosh, did they hit all the points? Because it is important… Those are definitely obstacles that advertisers face.

Brad: Now, I’m going to ask you a question that you might not want to answer, but I’m curious from the podcasters’ side what they get. Can you talk to me about CPMs at all?

Heather: Oh sure — I don’t mind talking about them. So AdvertiseCast, which is a marketplace that I’m presuming most people here are aware of, they have started publishing their average CPMs, which I find really fascinating and kind of interesting to watch because they do fluctuate slightly. Last I saw they were reporting about a $23 CPM. We, I would say try for 30 — that’s our goal. So we usually come in at $30 and then if we need to, we’ll negotiate down from there. My goal is always not to ever go lower than a $20 CPM because I feel like at some point it’s just too low, but really it also does depend on the podcast. So this year, more than any other year, we have podcasts that are sold out for the year. When you have all of your inventory filled, you have look at increasing your rates. Last year we had some shows that were six months into the year and filled up — we probably should have increased the CPM sooner. So we really do try to keep an eye on where our inventory levels are and increase pricing where appropriate. It’s challenging because advertisers are looking for a specific return, and if you increase your rate, it can decrease the overall effectiveness of the campaign, so we try to really keep that in check as well.

Brad: Well, you brought up inventory, and that leads me to a question, can you give me an idea of what your entire network inventory is in any way that you care to frame it — number of shows that you represent or inventory across the whole set, or whatever.

Heather: Absolutely. True Native media represents about… Gosh, we just hired a podcast recruiter and he’s been doing an amazing job, I would say that we’re at about 80 podcasts now, and our shows range in size. We typically like our podcasters to have at least 10,000 downloads per episode in a 30-day period. And we do have some really large shows that are getting over a million downloads, but some smaller shows as well. So we try to aim in that mid-sector, and my goal is for our company to move toward representing larger shows.

Brad: Does that mean I should think of 10,000 downloads as a kind of an entry level that podcasters need to attain before they approach you, or any company like yours, to build sponsorship?

Heather: That would be my recommendation. There are certainly lots of different ways that you can go about getting sponsors for your podcast, and I’m happy to discuss those different options if anyone is looking for a representation firm. I think that 10,000, or 5000 in some cases — there are some rep firms that’ll take you on a 5000 downloads per episode. But 10,000 is a really good benchmark because it means that your show is going to be large enough that it makes sense for someone else to really get involved in pitching your podcast. When you are smaller, it’s harder because there’re just aren’t as many dollars — gosh, when I first started, I was like, “Hey, you’ve got a thousand downloads, that sounds great!” But then I realized pretty quickly that I was working for less than I might be at McDonalds! Yeah, so I was like, let’s change this. Trying to make sure you have a big enough audience makes sense for everyone

Brad: And was that benchmark developed partly by the advertisers too? Are they saying, “Hey, give me a show with at least 10,000 downloads”?

Heather: Yeah, that is some of it, and it’s interesting. We deal with a lot of agencies as well, and you know some of the bigger agencies are like, “Hey, if your show isn’t getting over 700,000 downloads in a month, then we’re not even really wanting to talk to you.” It’s brand advertisers are at that level. A lot of times, smaller shows can be much more effective, especially when you are looking at a return. If you’ve got a show at a million [downloads]. We’re talking about $25,000 for a month of ads. That’s a big investment for companies trying to get into the space. You have to get a lot of new customers for that kind of an investment, so sometimes the smaller shows can be more effective. But there is a tipping point, because if the audience isn’t large enough, your audience is going to get overwhelmed by this advertiser…

Brad: I’ve had that experience. Who hasn’t had that experience!

Heather: Right. You don’t want to over-saturate. And that can happen with smaller shows.

Brad: Now, so far in this discussion, I get the idea that you mainly sell host-read ads. Do you ever then work with campaigns where they are recorded? and how does DAI (dynamic ad insertion) play into your business?

Heather: We’re getting closer to 75-25, so about 75% of the podcasts we work with are doing dynamic ad insertion. Instead of putting an advertiser in one specific episode, we’re putting ad insertion points across a full catalog of episodes, and then ads are digitally inserted into the podcast for a specific period of time. We definitely can look at what I would call a programmatic buy, where there are announcer-read ads that can be dynamically inserted, also host-read ads that can be dynamically inserted. I’m a really big proponent of dynamic ad insertion for many different reasons, not the least of which is that you’re always going to get a current ad read, and you have the ability to deliver a much higher number of impressions. Now, you don’t want to get over saturated, you don’t want to over-deliver impressions to one audience, but there’s a lot of opportunity with dynamic insertion. I really encourage podcasters to look at that. But always, I’m a huge proponent of that host-read endorsement ad.

Brad: Do you get resistance then from podcasters more than you do from the advertisers, who I imagine might not only expect it but actually request it?

Heather: It’s very interesting. Maybe four years ago, when I was talking to my agency relationships, they were like, “We’re never doing dynamic insertions, we don’t like it.” They really wanted embedded ad reads because of course there’s a nice long tail. They’re not paying for all the impressions they get, but now dynamic ad insertion is becoming prevalent and many people are doing it.

Brad: And it happened so quickly.

Heather: Maybe … I don’t feel like it did I feel like it’s been quick … [laughter]

Brad: Well, maybe I’m wrong about that, it just seems to me looking at the IAB annual revenue report, it just seems that number has shot up.

Heather: Yes, it has, it has. I feel like it’s been a long time coming but yeah. It has shot up, and I think that it’s a really good thing. Now, what’s really interesting is bigger brands, bigger agencies, they really like dynamic ad insertion, and it gets back to the point you were saying about brand safety. If you’ve got a podcast that maybe today you enjoy their content and you’re happy with their content, you have an ad that is inserted. Well, let’s say six months from now that host goes off the rails, suddenly you’re still associated because your ad is still there. But when we’re talking about dynamic ad insertion ads — here today, gone tomorrow. I think it’s the way to go. Podcasters are most resistant to it because you have to have a hosting provider that allows for dynamic ad insertion, and while there are more and more hosting providers moving toward DAI, all hosting providers are not created equal. There’s also a price tag that goes along with it most of the time.

Brad: And what’s the outcome then of that situation, do podcasters switch their hosts sometimes in order to get those deals to get those sponsors.

Heather: Yeah, absolutely, and we have a short list of hosting providers that we enjoy working with. At True Native Media, we are hosting provider agnostic, meaning that if you come to us and you have an IAB-certified hosting provider that we like, we’ll work with. Often when shows come to us, we will recommend that they make a shift because we know that they could be better served at a different hosting provider.

Brad: Now, you mentioned before that 10,000 downloads per month, or per episode, is a good benchmark for podcasters to shoot for if they want to be represented. For podcasts that haven’t reached that and perhaps aren’t even very close to it, do you have audience building advice that you dispense, or is that really not part of your business?

Heather: I do, I dispense a lot of advice. [Laughter] It’s not part of our business per se, but I definitely have some recommendations. One of the big points I like to make is that podcasters listen to podcasts, and I think what happens often is someone perhaps has a nice social media following, or they have a good newsletter, and they think, “I’m going to start a podcast! All of my following in these different arenas are going to come over and listen to my podcast.” It just simply is not the case. One exception is YouTube. We certainly are seeing more and more podcasters who are creating video along with their podcasts. Video views are happening, so there can be a lot of opportunity to work in both video and podcasting.

Heather: There are certainly strategies that work best for building an audience, and I would say that all of those strategies really have to do with getting heard on other shows, because those listeners tend to come over and check out your show.

Brad: There is a lot of promotional trading going on.

Heather: Cross-promos are really important. This sounds harsh, but one of the things that I think does happen a lot is: Your podcast gets 100 downloads. Let’s do cross promos. Well, is that really going to help you grow an audience? Probably not, so you do have to think, I think further ahead. I would recommend ads that [are inherent] on podcast players — Castbox, Overcast, are players where they have the large headings of podcasts that come across, and those are ads, so those are a really good place to go to get exposure I do know that with the increased number of podcasts, those ad spots are becoming more expensive and harder to get, but they are very effective. I think last week, Apple released information about how to get an Apple recommendation. If you can get featured on Apple, obviously, that really goes a long way. I also think that it’s not a bad idea to look at actually purchasing ads on other podcasts.

Brad: Heather, in the five or six years that you’ve been doing this, what are some of the most … I won’t even say the biggest changes, but the most significant changes in the whole industry that you’ve experienced, and which you think will influence the future?

Heather: Dynamic ad insertion by far is the biggest change that I’ve seen. I know I already spoke about it, but the reality is that we had thousands, hundreds of thousands, of ad impressions that were not being taken advantage of when we were doing embedded ad reads. That single shift is so significant because it opens up so many more ad impressions, which of course accesses many more dollars. The other thing we haven’t talked about, but is an important piece, is that programmatic ad placement. And when we look to scale the podcast industry, we have to rely on programmatic to some degree. Of course, I’ve mentioned that I’m a big host-read endorsement proponent, and the reason I’m such a big proponent of that is because they are less intrusive, they’re more effective, and I think they improve the overall listening experience. But the reality is that without a computer operating ad impressions, you’re never going to fill 100% of your ad impressions with host-read ads.

Heather: So, if you can come up with a system where your first line of defense are those hosts-read endorsement ads that [offer] a higher rate than programmatic (and in my opinion should be priced cheaper) but if you can solve those at a higher rate and then you can back-fill with programmatic ads. That is going to allow the podcasters to really maximize revenue. But when we look at it from an industry perspective, if we really do want to exceed a $2-billion mark, or if we want to just continue to really have more money come into the industry.

Heather: We really do have to go to programmatic at some level in order to really scale it, so I think that has been the biggest change. Other changes really are just in listening, the quantity of podcasts out there has just exploded. That is not to say that I think that it’s saturated, because I think we’re far from a saturation point with podcasts. But really seeing the number of podcasts that are out there and how mainstream it has become. Just in conversations or TV shows or whatever, where people refer to podcasts just like they do anything else, has really been interesting to observe.

Brad: Getting back to the host reads — do your podcasters prefer one or the other? Would they rather be doing a fresh riff every week on the ad copy, or do they appreciate being able to record it once?

Heather: There are very, very few podcasters out there who actually do true live reads. There are a handful of them that still do it. There are hosts out there who are able to weave an ad read into a conversation. But I venture to say that 95% of all ads have been pre-recorded at some level. Now, the hope is that they have been recorded in such a way — the podcast is formatted in such a way — that the ad is just a next transition into more content and the listener is going to still listen and be interested and excited about the advertiser. It doesn’t necessarily have to be live, and it doesn’t have to feel like it is part of the content, but it should feel like it’s formatted in a similar way to the content so the audience will listen.

Brad: Or ideally, in my opinion, be entertaining in some way, like Conan, the SmartLess guys — that kind of thing.

Heather: The hard part though, is that writing an ad and performing an ad is not second nature. Most hosts aren’t that great at it, especially when they start. It takes some practice to get good at doing those ads, so yeah it’s a skill.

Brad: How do you think advertiser expectations and demands will change going forward?

Heather: I think there are a few levels to that question. I really believe podcasts are more of an offline medium than they are an online medium, and there’s so much complexity in advertising in general, right now — as we look at doing away with the cookie, as we look at privacy and people not wanting their individual information to be out there anymore. So a lot of the targeting that’s happening in digital advertising is going away. But currently, there are a lot of expectations that podcasts will deliver the same kind of rich data that digital marketing does. So as we look at really where podcasts sit within performance marketing, or direct response, or brand advertising, that question really is up for grabs. Are we a performance medium or are we not? And my opinion is that we really do need to try and grow away from performance, and grow more into brand advertising. It is currently a direct response platform where many, many advertisers get a great return on their investment, so it really has more to do with where we’re positioned. All of the advertising vehicles out there are shifting and adjusting right now as the whole eco-sphere is changing. Where we land, and how long we stay there, are the important questions for us to ask.

Brad: Okay, this has been a marvelous conversation, thank you so much for agreeing to be with me today and best of luck with your business.

Heather: Well, thank you so much, Brad, I really appreciate you having me here. It’s been fun to chat about podcast advertising.

Brad: Great, thanks again.


Brad Hill