Marketers Raise Podcast Volume to Eleven

The format is poised to become a permanent and powerful marketing channel

By Michael J. McDermott

James Fryer/theispot.com

With podcast advertising racking up 48 percent year-over-year growth in 2019, according to an IAB study, the medium’s 14.7 percent projected growth in 2020 might seem anemic. But that slowed growth is merely a pandemic-induced blip on the radar. The longer-term outlook remains stellar, with spending projected to rebound almost 45 percent, to more than $1 billion in 2021, according to eMarketer, and marketers and media companies are making big bets on the format’s staying power.

The podcast market has been percolating quite nicely, as major media companies gobble up the content and look for scale. The New York Times Co., for example, recently acquired Serial Productions, whose hit podcast Serial helped ignite the podcasting craze in 2014, for a reported $25 million.

In a deal put together by Catherine Sullivan, then Omnicom Media Group (OMG) North America Chief Investment Officer and now U.S. CEO of OMG agency PHD, OMG committed to spending $20 million to advertise on podcasts distributed by Spotify Technology in the second half of 2020. And in what’s thought to be the biggest deal to date, SiriusXM is acquiring E.W. Scripps Co.’s Stitcher podcast and internet radio service for $325 million. Expect more industry rollup, as several other deals are in the works or rumored to be.

 

Huge Upside

Sebastian Tomich, SVP and global head of advertising and marketing solutions at the New York Times Co., says the unique nature of the podcasting format is a major driver behind its continued growth. In contrast to the huge investments brands have made in online marketing tools like social video, virtual reality, and augmented reality — in which audience use-cases have yet to be proven — resources allocated to podcasting are going to a channel with a bona fide track record, he points out.

“Podcasts are different because the audience and the distribution are already in place,” Tomich says. “People are consuming more podcasts than ever. Every marketer I talk to is paying attention to this space. There is a huge upside for podcast advertising to capture a growing share of marketing budgets. It’s that rare case where the business is actually lagging behind consumption. I’m very bullish on this from a media perspective.”

The podcasting format has proven itself as both an effective journalistic tool and a way to reach new audiences for the Times Co. Its podcast The Daily, which recently reached the milestone of four million downloads per day, reaches more people than Good Morning America or The Late Show with Stephen Colbert, Tomich points out.

Audio in general and podcasting in particular present a huge opportunity for the Times on the advertising side. “It’s giving us more potential to work with new types of advertisers than any other format we’ve had,” Tomich says. “The ads work, too. Not only is the audience already there, but since a podcast is an on-demand product, listeners are hyper-engaged, which lends itself really well to receptivity to an advertiser’s message.”

Asked if podcasting might be on the verge of a bubble or at least irrational exuberance, with too many ad dollars chasing too few listeners, he says, “That’s outrageous. The use case is so obvious. The market is wide open for marketers, and a billion (in podcast advertising dollars next year) is just a scratch on the surface of what this industry can be.”

 

No Static at All

When it comes to cutting through the proverbial clutter, the ears may have it. Brand stories told just audibly elicited an average of 21 percent higher emotional intensity than brand stories told just visually, according to research conducted by global media and marketing agency Mindshare’s Neurolab.

Such a deep level of engagement stems at least in part from the personal nature of how listeners consume podcast content — mostly through earbuds or headphones.

“That one-to-one relationship drives tremendous results in conversion,” Sullivan says. “Add to that podcasting’s addressability, its ability to stand out in an increasingly fragmented media landscape, and its growing amount of content, and we see a strong future for this format — and so do our clients.” OMG’s client roster includes such marquee brands as AT&T, Pepsico, and State Farm.

Besides advertising to the highly engaged audiences listening to popular podcasts, brands are creating and distributing their own podcasts to support specific marketing objectives.

“Looking at the preferences of our target audience and how they like to consume information, launching a podcast allowed us to not only reach millennials but to be a source of inspiration and information for a range of audiences by inviting a variety of guests on our show,” says Brian Rowley, VP of marketing at Panasonic.

The electronics giant initially entered the podcast game with Rugged Rants, a show that explored how future innovations would transform the mobility market specifically. As its goals and objectives changed, Panasonic repositioned the podcast as RUGGED RANTS; The Big REthink for a broader exploration of how technology and creativity are changing the way work gets done.

Featuring thought leaders from industries ranging from art and entertainment to education and the future of technology, recent episodes have focused on hybrid learning, mail-in ballot signature verification, and restaurant transformation amid COVID-19. “Our intention is that these conversations help our listeners reimagine the world around them and bring new learnings to their own jobs,” Rowley says.

 

Fine-Tuning Performance

Panasonic tracks the podcast’s performance against its goals by focusing on engagement with specific episodes, including the number of listeners and downloads, and by analyzing engagement levels across its social media channels. “We also look at where podcast traffic is coming from, such as which platform is driving more listeners than others,” Rowley says. “It is important for us to benchmark against our goals. That enables us to continuously improve and meet our goals.”

Podcasting is also a growing opportunity for brands to align with their consumers’ niche interests and passion points, says Dan Richardson, managing director of strategic planning at Mindshare. “When brands show up in podcasts in smart ways, they’re communicating that they support unique creators and diverse voices, that they’re innovative and maybe even a bit edgy, and that they understand what their target audiences are really interested in,” he says.

Podcasts can also play a role in helping CMOs stretch their marketing budgets by repurposing and cross-promoting content. Large CPG brands, for example, often have household reach on a par with many media properties.

“Why not include a link or Spotify code on the product itself?” Richardson says. “As with all content that brands create, it’s important to always think of ways to maximize its use by finding ways to connect media to other brand touchpoints.”

 

Long Term Outlook

There is growing evidence that podcasting will become a permanent fixture in the marketing toolkit going forward. Kate Ginsburg, VP of media and content marketing for the Insights Division at Kantar, cites research that shows 35 percent of North American marketers plan to increase their budget and resource allocations for podcast advertising in 2021.

The emergence of podcast programmatic ad-serving platforms is increasing accessibility to podcasting for small and midsize brands, as well. Ginsburg says that developments like these are indicators that “podcast advertising is here to stay and is not just a shiny new object.”

 


 

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