Podcasting platform AudioBoom made some pretty astonishing announcements recently.
The company reported H1 revenue of £7.9m, a huge increase on the £2.9m posted in the same period last year. It also slashed its overall losses by almost 50 per cent to £2.2m following a cost-cutting plan.
The figures were buoyed by deals made with advertisers as they seek to cash in on an expanding market.
Research conducted by podcast company, Acast, in March this year showed that nearly a quarter of UK adults had listened to a podcast in the previous month, and significantly, of that number 76 per cent said that they have followed up on an ad or sponsored message from the show.
Additionally, a recent study by the IAB and PriceWaterhouseCoopers revealed that the revenues from programmatic audio ads in podcasts were over £176m in 2017 – a staggering 85 per cent increase on the same figures from 2016.
For advertisers, podcasts offer the chance to speak directly into the ears of a young, well-educated, and often affluent audience. Plus, those listeners are giving their undivided attention, it’s not like the kitchen radio being on in the background.
Originally the habitat of hobbyists and die-hard fans, the podcast market is now big business, and Audioboom’s recent results are incredible proof.
At the moment, I’d argue that podcast advertising is undervalued attention. Specifically, because of the way that ads are delivered in podcasts. The act of the ‘in-host read’, a show’s host reading out the branded content, has become increasingly popular as ads in podcasts become more prevalent. According to Nielsen, personal endorsements increase listener interest in advertising by 44 per cent.
Listeners, myself included, prefer to hear an ad from the host because of the time you’ve invested with them. You build up a rapport and understand the references or in-jokes that might be thrown in.
We all know that ads can be tedious and sometimes misplaced. With in-reads it’s more light-hearted and less clinical than something added in post-roll. Crucially, it means you’re more likely to actually take on board what’s been said, as opposed to getting up to make a cup of tea once the TV ads start.
There are also viable programmatic options in addition to host-reads, where we can dynamically insert contextually relevant ads tailored to specific audiences that are sometimes pre-recorded with the podcast host. Targeting and measurement is only getting better for programmatic digital audio.
As the market approaches maturity, so the opportunity for long-term brand building campaigns is coming to fruition. The price of entry is not cheap for podcasts but due to the embedded nature of the in-reads, and the fact that there is little cost for the creative involved, we would class it as good value for what you receive.
This is being bolstered by the fact that publishers and streaming platforms are improving their services, making it easier for brands to select their audiences and discover how often their campaign is being listened to.
In early July, Spotify recently announced that it was opening up its podcast listener data to advertisers, simultaneously launching a new consumer interface that makes it much easier and clearer to choose between music and podcasts. They followed it up by announcing that Vodafone is confirmed as the first ever sponsor for the UK’s Discover Weekly playlist, one of the platform’s most popular.
The telecoms company is using the slot to promote its new 5G services, which is a perfect fit – they will speak directly to audiences that will likely be streaming using their phone and might be interested in upgrading it, as well as lead the important discussion about what 5G is capable of, creating an early brand association with the new technology.
In another shrewd, but perhaps counterintuitive move, News UK cut the number of podcasts it produces by half last year. Why? To focus on higher quality content and attract larger but more targeted audiences. The results? Double the collective downloads and triple the advertising revenue.
As with video on demand services and publishers such as Netflix, once the consumer attention moves towards a channel, investment will follow, which in turn improves the quality of content and increases audiences. For advertisers it is vital not to get left behind.
Brands need to be where consumer attention is – and if that’s an undervalued channel, more the better.
The brands and agencies that move quickly, and launch clever, dynamic, and well-targeted ads, will generate something that both audiences and CEOs in the boardroom will want to listen to.