Podcasting turns up the volume as consolidation, mainstream adoption loom
The stage is set for the channel to take a bigger role in media, bringing greater scale, enhanced optimization and promotional opportunities for brands.
Spotify's recent purchase of podcasting firms Gimlet and Anchor for a reported $340 million is the latest sign that the audio channel is reaching a new level of maturity in 2019. Podcasting's ongoing evolution hasn't escaped the notice of big brands like BMW, Busch beer, Nike, McDonald's, American Express and Intuit, all of which have either advertised in or produced their own podcasts. Even celebrities are jumping onboard, with Will Ferrell as character Ron Burgundy and Dr. Phil McGraw as himself, making podcast debuts this year.
The Spotify deal could set the stage for a wave of consolidation in 2019 which, in turn, will likely provide the scale and quality that advertisers seek, several experts told Mobile Marketer. For digital agency Ruckus Marketing, podcasts are bubbling up in conversations with brands more frequently, even if they don't end up as a major focus of a campaign, said Micah Freedman, senior business development director. Research bears out the interest, with podcast ad spend reaching $314 million in 2017, an 86% increase year-over-year. Spend is projected to more than double to $659 million by 2020, according to an Interactive Advertising Bureau and PwC report. Brands are also increasingly creating their own podcasts to engage with a target audience.
"Podcasts feel like the early days of YouTube. Low cost of entry, high volume, many individual creators, but difficult to surface the good stuff," Christine Chen, director of communication strategy at Goodby, Silverstein & Partners, told Mobile Marketer. "The biggest thing I see — and hope for — is centralization. The Spotify-Gimlet deal is a bellwether for better curation and promotion of podcasts."
As the podcasting space evolves, better optimization opportunities could be just around the corner, according to Sean King, SVP of operations at Veritone One.
"There is scale, but it is not massive," King said. "But as the medium continues to mature, all the data and generated recommendations are going to allow for the cream to rise to the top."
While audiences per podcast may be small, the channel is already attractive to marketers because the listener sought out and actively engaged with the content. There is a shared common interest in a subject matter and the podcaster, making it relatively easy for marketers to pinpoint cohorts.
"Podcasts feel like the early days of YouTube. Low cost of entry, high volume, many individual creators, but difficult to surface the good stuff."
Director of communication strategy, Goodby, Silverstein & Partners
Mobile is currently the device of choice for listening to podcasts, but with the rapid expansion of smart speakers like Amazon Echo and Google Home, more consumers are expected to tune in to podcasts. This also presents opportunity for dynamic placements, a development most marketers cheer. Already some 50% of U.S. homes have podcast fans, while 69% of listeners said they learned of a new product or service from podcast ads, according to Nielsen Digital Media Lab. Moreover, the research found a 14% lift in intent to purchase for brands advertising on business podcasts, the highest lift across measured categories. The lowest, 7.3%, was in comedy shows.
Curiosity in the content is climbing across demographics, though women are currently driving growth in listenership, according to the Infinite Dial study, produced by Edison Research and Triton Digital. Sixty four percent of Americans age 12 and older are now familiar with the medium, up from 60% in 2017. Forty-four percent have listened to a podcast, up from 40%, while those who listen at least monthly rose two percentage points to 26% since 2017.
Choosing the right approach
There are two primary routes for brands to get into the podcast arena. One is as an advertiser or sponsor, which typically takes the form of inserted spots or host involvement. The other option is for brands to create their own podcast centered on content designed to resonate with customers.
While many of the standard media strategy criteria apply to pinpointing the right approach in podcasting, the channel also provides some unique characteristics, according to Goodby, Silverstein & Partners' Chen.
"But one of the secret sauces of great media strategy is to understand how the content might make people feel, and how the emotion, tone and context illuminate how we're trying to make people think, feel and act," Chen said. "And what's wonderful about podcasts is that we have the opportunity for the host to get involved. Their role and delivery can augment your message."
Anheuser-Busch's Natural Light Naturdays beer recently took the sponsorship route when the company tied in with former NFL star Pat McAfee's popular podcast. Naturdays is the name of the new strawberry and lemonade-flavored malt beverage. On a recent episode, McAfee, who's known for his personal stories, talks about the new beer and his brand partnership.
However, if a host tends to go off script or shortcut a brand's message, the better course may be inserting a 30- or 60-second spot. With that in mind, another development for marketers to consider is that about 80% of listeners stay for all or most of a podcast episode, down from 85% in 2017, according to the Infinite Dial Study. This highlights how timing of the insertion is critical.
"... One of the secret sauces of great media strategy is to understand how the content might make people feel, and how the emotion, tone and context illuminate how we're trying to make people think, feel and act."
Director of communication strategy, Goodby, Silverstein & Partners
In addition to format, subject matter must be considered when deciding how best to work with podcasts, according to Leah Forsyth, managing director of HarrimanSteel.
"Podcasts can take various formats, from interviews to conversations between hosts to self-contained stories and personal anecdotes," Forsyth told Mobile Marketer. "It's important to consider what format lends itself best to what the brand is trying to convey."
Simply stated, the right partnership matters.
"You have to know who your advertiser is and who the audience is and align it with hosts of shows with a shared voice," Veritone One's King said. "That is where it has become a powerful medium."
Doing it yourself
When it comes to brands creating their own podcasts, HarrimanSteel's Forsyth said they need to ask themselves some tough questions, such as: What do they have to say? Does this topic add value to the audience's life? Why would their target audience want to listen to them as an authority on this? Selecting the right host is also of paramount importance to effectively communicating a brand message.
"This person needs to be credible, confident and represent the same values," Forsyth said.
One option for finding a host is to tap an internal expert. For example, Nutrition Made Easy! is a new podcast series from supermarket chain Giant Food that's hosted by its in-house team of nutritionists and dietitians.
Looking outside an organization for a host can also work. The Our/Los Angeles premium vodka brand, headed by partners Rupert Runewitsch and Anton van der Woude, opted to craft a podcast that would highlight the personalities, art and culture of Los Angeles. They hired two local influencers, a male film director and a woman who runs a pop-up dining app, to host the episodes. The pair also led in curating the content. The first series features interviews with local colorful characters including Jess Phoenix, a congressional candidate and volcano scientist, and Alex Evans, executive director of the Bob Baker Marionette Theater.
"It is important for us to develop relationships with people who already have big communities and right communities," explained Runewitsch, who previously worked in brand marketing. "We wanted to partner with people, where one plus one equals five."
A launch party for the podcast and its complementary magazine was held in late February at its distillery in L.A.'s Arts District. A second Our/Los Angeles podcast series will center on Los Angeles places, encouraging people to more deeply experience the city.
"Podcast is on the rise, not just in the industry but within our agency," said Veritone One's King. "It is not brand new, it has been around. But it is growing in popularity. It is a great opportunity for brands and advertisers to find new audiences in new ways. And the best part is we have seen this as completely incremental."