Blog: Is podcast advertising tone-deaf or in-tune?

"One of the besetting sins of the ad industry is that we try to fit old models and behaviours onto new media, and we’re seeing that happen to podcasts," says Sarah Ivey.

By Sarah Ivey

Who knew that voice-driven media, particularly podcasts, would have such a moment in 2019?

As with any new-ish medium, the landgrabs are under way, the talent marketing machine has kicked in and, of course, the ad platforms are on the rise. My question is: are we, as an advertising industry, going to do to podcasting what we’ve done to practically every medium since time began? Is it going to become a medium in which ads are resented and avoided?

It’s hard for the ad industry to avoid the temptation. This year, according to Infinite Dial, marked the first year that “ever listened to a podcast” crossed the 50% of population threshold in the U.S. for Adults 18+. In 2019, monthly listening numbers reached 32% of all adults. And the selection of podcasts has exploded at the same time: there are now more than 800,000 active podcasts and more than 54 million podcast episodes currently available worldwide.

That’s a lot of consumer attention – and where attention goes, ad dollars follow. This year, according to the Podcast Revenue Report by the IAB and PwC, marketers spent $479 million to advertise on podcasts in the U.S., an increase 53% from $314 million in 2017.

Based on market trends and surveys returned by significant podcast companies in the U.S., the report projects that revenues will top $1 billion in 2021. When a medium has this kind of momentum, the hysteria starts.

One of the besetting sins of the ad industry is that we try to fit old models and behaviours onto new media, and we’re seeing that happen to podcasts. There are publisher/influencer models emerging, like midroll, where podcasts hosts will endorse your product, like the radio programs of yore. Then there’s the “creator” model like Wondery, which represents its artists and curates the ad creative, like a cross between creator model with product placement. Then, of course, there is, and will be more ad platforms like Spotify.

Spotify has emerged as the most bullish players in this space, and the one to make podcasts most accessible to advertisers. The company has made some significant acquisitions in both the content space, Gimlet Media and Parcast, as well as technology like Anchor which provides the platform to help people create podcasts. Spotify has not so quietly become the number-two player in the podcast market behind Apple.

Most significant of all is Spotify’s podcast ad platform, which allows advertisers to target listeners by demography, fan-base, and genre.  Seems like old times, doesn’t it? Let’s create an ad and place it in something that’s a lookalike for our customer, and we’ll hope for a good response because we would sure hate to miss out on the “eyeballs?”

Here’s where I think we’re getting it wrong: we’re not asking why podcasts are so popular in the first place, and why the experience is so compelling for customers.

First, you have to hunt for podcasts. They’re not easily discoverable. According to the Podcast Host Discoverability Survey, 43% of listeners find podcasts by asking people online, 23% by asking a friend with similar interests, and so on. Effort is required, and when consumers expend effort on something, they really want it.

Second, when you find a podcast you enjoy, you give it your full attention. Podcasts are personal, and if earphones are used, they’re an intimate experience. Storytelling in all its forms is the attraction of podcasts. Interruption with an ad that doesn’t add to that experience is far more repellent than in other media.

In other words, the same old “vanilla to the middle” approach to podcasting may be the worst approach of all and runs the risk of turning listeners off wholesale. But curation of each message to each podcast is also difficult to scale.

Here’s where the craft of media I think becomes the critical factor. Understanding mood, mindset and context combined with killer creative can harmonize or enhance the listener experience. And here’s where I think Spotify has an edge.

In addition to the usual targeting options, Spotify has launched targeting by interests and real-time context. Cleverly, they’ve leveraged their existing playlist behavioural data around moods, moments and activities and they can do it in real time. That’s the power of podcasts – they’re immersive in a time and mindset and anything advertisers and their clever media planners can do to empathize with that experience will win them, literally, active listeners.

The data is already showing that response to ads within podcasts has a much higher buy rate. We’re already ahead in this new, really resonant medium. Clever, empathetic media craft will go a long way to ensure that this medium truly wins customers over to better, smarter advertising.

Sarah Ivey is CEO of Agents of Necessity Inc., a global insight, communication planning and strategy agency.