As a relatively newer medium, podcasting is still frowned upon or not utilized by many publishers.
It’s similar to how many companies avoided the internet and digital when they first went live. Like Sharon Harris mentioned in her PubForum Montreal keynote, they didn’t believe in it. However, just as the internet did in its early stages, podcasting is already proving its value.
On average, Podcast listeners stream an average of 7 seven podcasts per week, which is rapidly increasing.
Nearly 51 percent of the US population consumed podcasting content in 2021, and the number of “super listeners,” US adults that listen to 5+ hours of podcasts a week, is also growing.
There’s an opportunity for publishers in this space, but getting started and setting up shop is often more challenging.
Regarding understanding podcast monetization, this year’s Advertising Week in New York was extremely educational. During the “Understanding the Podcasting Ecosystem” session, audio executives discussed what’s to come, initial bumps in the road that have successfully been cleared, and where things still need a little work.
From 2017-2022, Soundrise, a spinoff of the Market Enginuity Podcast Group, generated about 55 percent annual growth in client revenue from podcast advertising sales. Soundrise is a senior team of podcast advertising experts that has tripled in size over the past five years while successfully supporting PRX and podcasts distributed by the public media organization.
Panelists Donald Albright (President and Co-founder, Tenderfoot TV), Conal Byrne (Chief Executive Officer, iHeartMedia Digital Audio Group), and Shelby Schenkman (Agent in Audio, United Talent Agency), along with moderator and multimedia mogul Charlamagne tha God, examined how podcasts are developing into a thriving medium for creative storytelling.
They also explored the industry’s growth, increasing distinct communities that are receptive to the right content at the right time — benefiting advertisers, listeners, and creators/publishers alike.
Here are four reasons why podcasting is on track to be the next best revenue driver.
We May See a Subscription Model Soon
Currently, podcasts are a widely distributed free model where RSS feeds are everywhere and are under creator ownership. Over the last five to six years, platforms began experimenting with only making podcasts accessible to subscribers. According to Byrne, Spotify has tested this, but there needs to be current evidence showing that people want to pay for podcasts.
On the other hand, Albright held an alternate perspective. Instead of seeing the situation as a publisher or creator losing control, it can be viewed as an additive to the entire ecosystem that benefits everyone involved.
“There are no ads on subscription episodes, but the promotion that goes into a Spotify subscription show or an Apple subscription show can boost the overall audience of a show,” Albright explained. “So unless you monetize every impression, you aren’t losing any money on the ad side. Advertisers shouldn’t get shaken up about a podcast with a subscription offering unless it’s completely behind a paywall. Most of the time, it includes a free episode, or offer it a week early, giving incentives.”
If priced correctly, there is still an opportunity for everyone to make money, and it’s also easier to monetize and show that an advertiser isn’t interested in a particular publisher or creator because of their numbers. If you super-serve your core audience with a subscription model, you’ll ultimately make money and build your audiences in time for brands to step in and buy.
You Can Leverage Your Audiences With Partnerships
In many aspects of advertising, we’ve heard that collaborations and partnerships are a significant way to see quicker revenue increases and, for lack of better terms, just getting things done in general. iHeartMedia likes to utilize a strategy they got from TV and film called “office on the lot” or an “imprint” in the book publishing world. With this approach, instead of partnering with a creator on one podcast show, they build a slate together that acts as a creator’s playground. What’s best about this is there is room for trial and error and podcast publishers to screw up a few times before finding that hit.
Five years ago, iHeartMedia launched its first show with TenderFoot TV; they now have 10-15 existing podcast shows. This model allows iHeartMedia to have slate partnerships instead of thousands of podcasts across the board.
“How can we leverage the Tenderfoot TV audience alongside the iHeartMedia audience to make something even bigger?” Schenkman asked. “These are the questions we ask at UTA when connecting companies to establish partnerships. It’s all about leveraging that audience and building more. Those are the best collaborations.”
Podcast Distribution Is Growing; Consumption Channels Are Expanding
Podcasts hit between 110 and 120 million American homes a month, and the most amazing thing about that stat is that podcasts still need to be distributed and consumed on the platforms where people get the most of their content. While they are largely absent on Facebook, they are making their presence known on YouTube. iHeartMedia is starting to see data showing that there might be many more podcasts on YouTube. Still, podcasts are mainly absent from Google search results.
“The search results issue with Google is changing,” Byrne explained. “Google wants to populate search results more with great podcast episodes because they designed a system with the best content and most brand-safe content getting made in the world. Over the next 5-10 years, you will see growth upon growth if Facebook, YouTube, and Google hit, and they will.”
Podcast Technology is Improving
How ads are put into podcasts has improved fast, basically catching up to digital media. Just four years ago, podcast ad technology was pretty primitive. Most ads were baked in, meaning they were a part of the audio file. Today, most podcasting ad serving is dynamic. Publishers and creators can insert and pull out an ad or an impression in a podcast before a download, and they can also conduct geotargeting and audience targeting. Byrne pointed out that at iHeartMedia, the conversations they are having with brands today are similar to those they are having with anyone in digital media.
The podcast industry had to play catch up, and now they are caught up.
“Now I can sit down with a brand and say ok, you’re targeting moms ages 28-54 who intend to buy a car in ten geo territories in the next 90 days,” Byrne said. “We couldn’t have these conversations with brands three to four years ago because the technology didn’t exist. Now that the audience is there, it creates business development, and the ad spend can only go up from here.”
According to Albright from Tenderfoot TV, Baked ads also led to impression discrepancies or instances of having a $250,000 ad in the same episode as a $25,000 ad. The technology improvements have fixed these issues, and now that everything is all impression based, you can monetize that spot with a different advertiser after a certain amount of impressions.
Underrepresentation in the Podcasting Space
While podcasts are a great medium that breaks down the walls between creators and audiences, iHeartMedia sees the same issues in podcasting that we see with multicultural audiences in other forms of media. Byrne mentioned that there had been efforts in the last 1-3 years to tackle this underrepresentation problem. Still, he is also wondering if advertisers feel that brand safety is sometimes in question.
“The question of brand safety that we talk about a lot in the media is starting to get talked about more and more in podcasting,” Byrne pointed out. “In the eyes of brands and multiculturalism, sometimes they consider some shows sponsor worthy and others “not sponsorable” because they are not brand safe. We have to have these conversations because what does that mean? Do you mean it’s uncomfortable content? Because that is not brand unsafe content, just content that doesn’t look or talk like you, that’s different.”
Companies need to hire more Black people because Black content ultimately creates culture and Black audiences are a very targeted market that sets trends. So the answer is more diversity behind the scenes versus only being represented in front of the mic, according to Albright.