Situation: brands spend more and more money on advertising in podcasts - we understand why

Published on November 23, 2018

Situation: brands spend more and more money on advertising in podcasts - we understand why

    Podcasts are ceasing to be small independent media: more and more popular online audio shows are being released by large media companies. They attract more and more sponsors. According to the assessment of IAB and PwC's, by 2020 the income from advertising in podcasts on one only the US market will grow in relation to the 2017 th 110% -. To $ 659 million relates how brands work with podcasts and audio can develop in any way.


    Photo by Sergey Galyonkin / CC

    How does advertising in podcasts change


    Direction of advertising in the podcasts on the rise. And in terms of maturity, it is gradually approaching the digital advertising industry as a whole.

    Internet giants are once again interested in podcasts, and this is a positive signal for the market. As we wrote earlier , Google plans to introduce a service with podcast recommendations. Apple is definitely looking in the same direction: last year, a corporation from Cupertino bought a startup that created a technology for automatic speech recognition in podcasts.

    Developed in a niche and targeted audio advertising. The number of services for targeted automatic placement of audio ads is increasing, and some of them work in accordance with programmatic mechanics . Meanwhile, the Google DoubleClick platformbegan to collaborate with streaming services and broadcast brand ads in audio format, including podcasts on the Spotify and TuneIn platforms .

    Another tool for advertising targeting was created by the analytical company Nielsen: Auto Cloud is a marketing platform for the automotive industry that provides contact with potential buyers. Two podcast companies that already work with this service are Panoply and Westwood One.

    New opportunities for promotion through podcasts attract large companies. Advertising is bought by car and clothing manufacturers, such as BMW and Chanel.

    Some companies create their own shows.

    And if the original podcasts were mainly produced by technological and financial organizations, such as Netflix, eBay and State Farm Insurance, the company now has its programs at the Gucci fashion house and the cosmetic brand Sephora .

    Why brands place ads on podcasts


    Podcast audience continues to grow. According to 2018, 26% of Americans over 12 (73 million people) have listened to a podcast at least once in the last month. 83% of students in the age group of 18+ have at least incomplete higher education, and 54% work full-time. This is a solvent audience that is interesting to brands.

    However, most people listen to the recordings to the end and do not rewind advertisements in order not to miss anything in the program itself. In addition, they usually have a high degree of loyalty to the show: according to the Midroll advertising network, the average Net Promoter Score for podcast listeners it works with is at level 70 - even higher than that of Netflix.

    The most common advertising presenting model in our time is when the presenter reads the message from the brand himself: it is used in 67% of the ads. The audience, as a rule, calmly treats them, since they do not contrast much with the main content of the release. Such close to native integration, according to Ad Results Media , is on average three and a half times more efficient than those dynamically inserted from ad networks.


    Photo by Tommy Lopez / PD

    Another format that does not annoy the audience is branding of podcasts (both individual episodes and the whole show). The public knows that the podcast is sponsored by the company, but continues to listen to it for content and appreciates brand unobtrusiveness.

    For example, Blue Apron delivery service for delivery of cooking sets does the transfer Why We Eat What We Eat. She is led by Cathy Erway, the author of culinary books, who tells about the history of various dishes and trends in cooking. Such a show is not perceived as an advertisement by Blue Apron, although it directly serves the purpose of its promotion.

    Which way can the development of the industry


    Representatives of advertising services in podcasts and leading such programs in 2015 showed a desire to cooperate with major brands. Three years later, their aspirations begin to come true. True, the flagships of the market (FMCG giants, automakers, etc.) are only being mastered at selected online audio shows, for example The Daily from The New York Times.

    However, advertising from large companies do not always like users. The insurer GEICO, one of the largest advertisers of American radio stations, ran into such a public reaction . He launched an ad in the Dan Le Batard Show podcast, which angered his fans: now they say they will notuse the services of the company because of its "terrible" promotion.

    According to media investor Eric Peckham (Eric Peckham), cooperation with corporations limits the creative freedom of the creators of audio content. At least because they have to adjust the content of the programs and their style to the wishes of advertisers.

    Another problem with advertising in podcasts is the automatic placement of ads. From the point of view of the columnist of the Folio edition of Steve Smith (Steve Smith), the ways of promoting brands in podcasts are getting worse. Pre-recorded third-party announcements interspersed in the program sound much less sincere than when the presenter speaks about the brand. Also the content of advertising often falls out of the context of the show.

    New advertising tools do not like many authors. The creators of the HowStuffWorks podcast at the end of 2017 decided to completely abandon the automatically placed ads, because the audience did not like them: they felt “as if they were shouting at them”.

    According to Packham, podcasts will move to a different model of monetization. A possible way for independent authors is to introduce a paid subscription to their shows; such functionality may appear on several podcast terminals in the next two to three years. However, a single “Netflix for podcasts” has not yet been created , so it is not yet clear which way the audio content industry will follow.



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