While AI appears to be the buzzword of the year, 2024 may actually be the year of the podcast, as agencies and brands invest their dollars into digital audio as other mediums suffer declines.
IAB Australia’s Audio State of the Nation Report found that 61% of agencies surveyed plan to lift spend in streaming audio in 2024, with 64% of them in podcasts.
ARN's iHeart and Magellan AI’s latest Top Podcast Advertisers report found that the majority of podcast genres continue to see an uplift in investment, with the largest increases coming in the categories of comedy, health and fitness and science year-on-year.
And yesterday’s Infinite Dial research revealed that podcast listenership in Australia has increased by 20% in two years, leading the pack globally, with nearly half (48%) of Australians tuning into a podcast every month.
That growing interest in the space has led industry figures Andy Maxwell and Ralph van Dijk to create EarMax Media, Australia's first specialist podcast media agency.
EarMax, which soft launched in January and is officially unveiled to the market today, offers podcast media buying and sponsorships, as well as creative production through its sister agency, Eardrum.
van Dijk said that the duo felt there was a need to offer a service that was taking podcast advertising more seriously than others in the market.
“We tested it with a few Eardrum clients, as we've been working directly with many brands over the years creating their audio advertising, and they were so enthusiastic that we got a bit of a barrage about why this is necessary, some of the frustrations that they've been having in trying to use podcast advertising more, and in some cases, why they stopped using it because they weren't able to get what they needed - either the creative wasn’t right or the media schedule wasn’t robust enough,” he said.
Maxwell said that measurement is often a central piece that's traditionally been lacking from podcast advertising and has thus made brands reluctant to try the format.
“The campaign that we’re doing with ANZ, we're promoting their podcast series through other podcasts - it's not about impressions and how many people you can get in front of, it’s how many people can we get to listen to their podcast,” he told AdNews.
“The advertising metrics themselves are kind of irrelevant; it's quality over quantity.
“Explore Worldwide was a different one where it was more about brand awareness, but amongst the right people. They have a very specific audience, so it was thinking about the podcast, not just in terms of demographics and reach, but in terms of the content and the listeners and the hosts where you can be more specific.
“That's the beauty of a podcast; you can go so much deeper into the content and matching that with the right creative.”
van Dijk believes that there hasn’t been more interest in podcast advertising up until recently as it hasn't been done well enough as a format.
“Unless you take it seriously and doing the due diligence, you're not going to get the attribution, you're not going to get the results or you're going to run creative that doesn't live up to the brand guidelines or that doesn't sound as good as your brand is," he said.
"Part of the problem is that it's not easy to do well."
Maxwell said that it’s still a relatively new medium to be able to advertise in compared to the other channels, which often hinders early adoption from brands.
“When I first started working in podcast advertising, there wasn't as many podcasts, the audiences were less easy to track, the definitions and the metrics weren’t really there - that’s only in the last year become very accurate,” he told AdNews.
“Now we're at a point where the market has matured; we're not seeing the kind of growth in audiences that you saw at the start of lockdown but they're still growing. These audiences are here to stay, more and more brands are investing and the sorts of campaigns that people are running are more advanced.
“When you go to podcast X, you can see that 40% of their audience is between the age of 25 to 35, you can see if they're male or female, you can look at the podcast hosts and go on their Instagram’s and get a feel for them.”
IAB’s Audio State of the Nation respondents said the greatest opportunities for audio digital advertising growth is its targeting and personalisation, standardising ways to measure incremental reach, attribution, and cross-platform effectiveness along with improving programmatic supply.
Brand building was named as the dominant campaign objective for media agencies using digital audio advertising (80% using podcast advertising for brand awareness), with fewer buyers using it for lower funnel activities such as increasing sales or conversions (30% for podcast).
Audience attention and engagement was seen to be the key driver for audio investment (62%) followed by incremental reach (52%) and ability to complement other media (50%).
Maxwell said he sees that agencies are recognising the benefits of podcast advertising, not just in terms of performance marketing, but also in furthering that brand building objective and creating affinity.
“That’s really not possible to do with a TikTok ad or an Instagram ad; people are dialled in when they're listening to podcasts,” he said.
van Dijk agreed, saying that given the context of a podcast, brands have a real opportunity to make a meaningful impression on a listener.
“Compared with the proximity of some of the other media we see where it’s passive and not really talking directly to the listener, in the podcast environment, your host is talking just to you, so the advertisers should take that same tone of voice,” he said.
“When you do that, you've got the opportunity to really change someone's opinion, because it's conversational and there are enough imperfections to make it sound like this is that person's thoughts.
“That's really the opportunity for advertisers - to actually affect some change in the audience and it's not been done because either the media schedule has been created and then they wipe their hands and go ‘someone else can take care of the creative’ or the creative has been done without really thinking about the environment. Maybe they've written an ad that is ideally for radio and when it's in a podcast environment, it sounds too shrill or intrusive.
“There's no one owning the communication and that's really what we're doing - end-to-end media and creative. We look specifically at the environment, and create the asset and the plan, that's going to generate the best results for the listener.
The latest SMI numbers, despite showing digital audio spend as down 4.5%, highlight that forward bookings data is at the highest level this year (and digital audio’s decline is a far cry from the numbers seen in the linear television [-12.3%] or news publishing [-14.7%] spaces).
Maxwell said that he thinks investment in podcast advertising is going to continue to rise, a sentiment in line with Acast research that found more than half of marketers in Australia anticipate increasing podcast ad spend in the next five years.
“It's one of the few areas that have actually seen year on year growth and growth each quarter in terms of investment, whereas other areas and channels have seen massive drops,” he said.
“Where businesses want to be smarter with their media spend and understand exactly where it's going and make decisions based on more than just metrics and data, they’ll come to podcast advertising.”
van Dijk said that once the client has a taste of it being done right, that competence in the medium just grows exponentially.
“We have noticed that with both Explore and ANZ - they've immediately given us more parts of their business to work on planning the next campaign in more markets, because we’ve cracked the formula, and they are approaching it with more confidence,” he told AdNews.
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