Advertising dollars, seeking the scent of highly engaged consumers, are now firmly in pursuit of the captured ears of podcasting.
Consumption of podcasts -- seen as a personal experience for each listener and hence more open to commercial messaging -- accelerated during pandemic 2020.
And the audience continues to grow, with more than 50 million downloads a month (compared to 13.2 million in October 2019), as more podcasts are created, meaning more fine-tuned audience segments.
PwC’s Entertainment & Media Outlook 2020-2024: “This growth trend will continue throughout the forecast period, as listener numbers are expected to continue to increase, as the proliferation of content and smart speakers continues.”
Calculating total ad spend on podcasting for Australia is elusive but numbers from the US show a steep climb with podcast ad revenue expected to reach $US1 billion this year .
The SMI (Standard Media Index) shows $12 million on podcasting in Australia in 2020, double that of 2019. That doesn't include sponsorship and direct spend which, anecdotally, are higher.
Media agencies, however, are paying attention to the opportunity of podcasts. IAB’s Audio State of the Nation says 36% of media agencies have podcast advertising as a significant or regular part of their activity, up from 33% last year.
Ann-Claire Paton, digital director at Hearts and Science says uncluttered podcast space gives advertisers the opportunity to stand out and align with content that suits their brand
“It’s a medium where the user is leaning into the conversation or topic at hand,” she says. “Advertisers can also lean on the hosts, to read their ads in a way that is organic, and seamless to the content that a user is listening to.
“You either love listening to podcasts, or they are just not your thing. Advertisers shouldn’t run ads there for the sake of it, but ensure that they have a message that will land well in an audio space and to complement other activity.”
Ben Willee, general manager and media director, isn’t surprised to see an explosion in podcast listenership in Australia.
“Storytelling is the oldest medium in the world and highly engaging when done well,” he says.
“I’ve just been reminded by the team at ARN in their excellent Neuro presentation that if a picture paints a thousand words, a word paints a thousand pictures.
“The pandemic accelerated the shift towards consuming audio digitally and we are now seeing consumers preference to choose their own content when they want on the device they want.
“That combined with the complete explosion of content, genre’s apps and delivery mechanisms creates a lot of opportunities for advertisers.
“I could argue the battle for your eyeballs is well and truly established, but the battle for your ears is just beginning. We are seeing radio networks launch apps, tech companies paying huge sums of money for content creators. Most importantly, every platform is trying to capture as much data about you as possible. Sound familiar?
“We’re already doing tests and it won’t be long before retargeting and personalisation become mainstream in the digital audio environment.”
Mark Henning, executive director – media, Kantar: “We have seen throughout the pandemic that podcast listening has been one of the beneficiaries of changed media behaviours. And it is a trend we expect to continue post pandemic as more content continues to become available.
“From our work on measuring effectiveness we see that podcasts can be an influential media for ad impact. Kantar’s global normative data shows that podcast ads exceed our digital effectiveness norms in lower funnel metrics (brand favourability and Purchase Intent).
“We have also run several studies locally, using our unique combination of Direct exposure integration combined with Opportunity to Hear, and are seeing this trend for higher than ‘norm’ impact replicated in Australia.”
Nick Grinberg, head of strategy, Next&Co: “People who listen to podcasts are engaged with the host and subject matter of the podcast, so if the advertiser message is relevant – this can lead to good ad engagement.
“Listeners have opted-in to listen to that host and are more likely to trust their message.
“Based on the sheer volume of podcasts out there, an advertiser can connect with almost any kind of audience.
“Leaning into the trust and influence wielded by a podcast host can help with the authenticity of an advertiser's messaging – helping tailor the message to be a fit for their audience.”
Podcasts aren’t as plagued by ad avoidance as other advertising channels. 78% of 7000 US consumers surveyed by Nielsen said they do not mind ads or sponsorship messages because they know they fund the podcast itself.
“The best podcasts would be determined by the audience/advertiser fit,” says Grinberg. “Understanding your target demographic and picking podcasts that fit is key.
“Smaller podcasters can have very loyal audiences that may engage with advertising messages better than larger, more subscribed podcasts.”
He says podcasts are like radio’s modern, on-demand sibling so attention is excellent. A study by Acast, which surveyed 2500 Australians, had almost half (49%) saying they pay more attention to advertising when it is read out by the podcast host.
According to Edison Research The Infinite Dial 2020 Australia study, the majority of podcasts are most often listening to podcasts at home, on a smartphone/tablet. It is important to consider these as environments when considering ad messaging.
Sophie Langton, national group planning director at Spark Foundry, says there’s no one size fits all solution for how to use the format.
“Like all channels, you should be executing tactics that both complement your message and deliver upon the intended action or outcome,” she says.
“A podcast’s strength is its ability to engage audiences and tell a story. Audiences are voracious consumers of podcast content for a reason. They are seeking genuine voices of authority, connection to their community and deeper insight into their areas of interest.
“By aligning to content verticals and leveraging presenters, advertisers can use podcasts to help them tell a brand story. You won’t build broadcast reach, but that’s not how you should use this channel. The focus is on trying to connect with audiences in genuine ‘lean-in’ environments.
“To achieve campaign sufficiency, podcasting should be complemented with a broader audio strategy. Tailor your creative messaging to the environment, and build a connected audio ecosystem to achieve impact at scale.”
She says a perceived lack of measurement stops podcasting from becoming a must have for many advertisers.
“Being a digital platform, there is an expectation for more detailed reporting and attribution - whereas the output is more comparable to that of offline channels,” says Langton.
“The one thing missing for planners is the ability to calculate de-duplicated reach and frequency across not just podcast providers, but all audio publishers. Like all channels, the more detail we can extract, the better.
“Measurement aside, we know the inherent value in podcasting. A podcast’s strength is its ability to engage audiences and tell a story. For brands looking to reach audiences in low clutter, contextually relevant and highly engaged environments – podcast placements should be explored."
Podcasts are a personal experience, says Langton. Typically consumed through headphones, they allow a little alone time.
When searching for a podcast, people are generally looking for one of three things; it makes them laugh, it teaches them something they don’t know, or it makes them feel like they are part of a community (such as true crime).
“Engagement often comes at the expense of reach,” says Langton.
“Without a sufficient baseline of media impact, the effort in will not meet the impact out. It is important to diversify the number of podcasts and publishers on the plan to build unique reach. Likewise it is important to build frequency of exposure.”
Nielsen research has found that optimal frequency levels are five to nine times. Exposures at this level boosted message resonance by 51% on average.
Sarah Keith, Involved Media's managing director: “The podcast universe has exploded, both in terms of sheer quantity and in attracting advertising dollars.”
In the US, podcast advertising revenues climbed to $842 million in 2020, up from $708 million in the year prior, and will hit $US1 billion this year and $US2 billion by 2023, according to IAB/PwC calculations.
In 2018, globally there were around 525,000 shows with over 18.5 million episodes. As of April this year, there were more than 2 million and 48 million episodes, according to Podcast Insights.
“But the plethora of choices in itself presents a problem,” says Sarah Keith.
“Like jumping onto Netflix …. where on earth does one start?
“By their very nature, podcasts are a one-on-one experience. A personal choice . To borrow that excruciatingly overused phrase ‘a lean in, engaged experience’. Podcasts can be wide reaching or niche.
“For advertisers however, ‘the best podcast’ is, in my opinion, one (or a few of similar ilk) that can provide content alignment with their brand and, crucially, with enough scale to ensure it achieves reach delivery.”
But why use podcasts as a vehicle for ads?
Ketih says audience attention is one key reason. Local research conducted by NOVA/ACAST/IPSOS in the 2019 Podcast Intelligence Report illustrated that podcasts drive action:
- 61% of podcasters took action after hearing a podcast commercial message
- 76% explored looking for more information online either via branded website or search engine
- 55% shared information about the advertised brand with friends and family in person or online
- 25% purchased the advertised product and/or used a promotional code
This is backed globally by Nielsen’s US study in 2019: Podcast Sponsorship Effectiveness which says audiences generally (68%) engage in order to learn something new, as reported by 68% of listeners.
This is a greater proportion than for TV (39%), social media (38%) and online articles (20%).
Nielsen also found that 62% of listeners correctly recalled a podcast ad, while the same proportion agreed the ad made them consider purchasing the new product.
Almost four in five (78%) consumers said that they did not mind the ads or sponsorship messages because they knew they were a means of supporting the podcast.
“And, as podcast hosts are increasingly being regarded as influencers as they aid in building brand affinity via their in-show reads, there are attribution studies that have proven host reads drive brand lift measures and can push listeners to advertiser’s websites,” she says.
However, there is no unified measurement of impressions delivery across the marketplace.
“Whilst the trumpets heralded a new dawn in podcasting, they did not follow up with a holistic measurement chorus,” says Keith.
At OMD, Katy Eng, director of content marketing, and Mette Breith, head of marketing intelligence, says podcasts are a must consider.
“But it can be more difficult to find the right story angle for your brand and the right show to align that story with,” they say.
“It’s important to take the time to understand a show, its community and its host and how your brand can add value to their listening experience. Can you educate them on a topic that they want to understand? Can you share experiences with them from other people who are experts or advocates? Can you customise your creative to the more personal, intimate listening experience that podcasts are known for?
“If you can do all that, we reckon you’ll see some really positive results and start building a great relationship with that pod community.
“Podcasts are a great medium for marketers for so many reasons, and the list keeps growing! Some of the most common reasons advertisers use podcasts are because of how actively engaged the audiences are. It’s a truly lean-in, opt-in experience for most people which leads to huge engagement figures, a sense of community around a show and a strong loyalty to the hosts. Because of all this, advertising can be more integrated, complex and rich because the audience is there for it.”
Huong Nguyen, business director at Alchemy One: “When COVID-19 happened, we read the news, we watched the news, we cooked, we baked, we exercised, we watched Netflix and Stan, and we started to listen to podcasts - and somehow, that behaviour seems to have stuck.”
Data from the IAB suggests that almost eight in ten (79%) have used podcast advertising (up from 75% in 2019) and it is now a significant or regular part of activity for 31% of respondents.
“The growth of podcast consumption means we cannot ignore it as a media channel for consideration within the media mix,” says Nguyen.
“But, as with a lot of channels, rather than a replacement, we’re seeing it as an extension of both our digital, as well as our radio plans, converging as an important part of an audio play, allowing us to extend our brand and client touchpoints.”
Marcus Betschel, head of digital & performance, Ryvalmedia, co-hosts a weekly podcast Hot Digi Dog.
“Podcasts, as opposed to what some would describe as similar channels like radio, specifically align, and grow audiences around an ideology, thematic or core interests,” he says.
“For that reason, they curate a specific following and loyalty from a trackable and valuable audience segment. They develop an engagement and influence that can be leveraged and tracked (although it is worth noting that this has not been tracked and demonstrated at scale yet by enough podcast practitioners but is expected)
“The radio listening of just about everybody is to stations, not to programs.
“Very few listeners switch on at the beginning of a program and off at the end of it. Additionally, radio listening is time-based, not program based. If you change the time slot of a program, its audience will almost certainly not follow the new time slot.
“But podcast audiences follow programs, not time slots.
“All of this means that if a podcast can quantify and value it’s audience, it stands to reason that their listenership could represent a quality and valuable audience for the right ads and content.'
Betschel says audience attention is generally much higher on podcasts than radio. It’s often quoted that radio listening is defined as “being within earshot of a radio that is going”. Listening to a podcast is usually a defined and purposeful listen of a program that is intended.
“Rather than a 'must-have', they are becoming a normalised part of the general public’s media consumption habits. Therefore, moving from something interesting, podcasts should be part of the media mix to ensure true omni-channel marketing."
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