Why You Should Get Into Podcast Advertising, Right Now

Last month, Right Side Up’s Head of Offline, Krystina Rubino, led a session in our Summer Webinar Series to discuss what the current podcast advertising landscape looks like and why now is a great time to get up and running on the channel if you aren’t already. Here’s an overview of the material Krystina covered.

The Foundation: What are podcasts and who listens to them?

Podcasts are on-demand, digital audio. At their core, they’re shows hosted on RSS feed via third-party platforms such as Libsyn, Soundcloud, and others. Feeds are indexed and accessed by consumers through media platforms like Apple Podcasts, Spotify, Google, and other purpose-built third-party apps, like PocketCasts and Overcast. Ads are typically embedded or inserted in feeds by producers, and sold direct, or via publisher or network. If you’re looking for more detail on how ads work, as well as best practices for planning and execution, check out our guide to cracking the code on podcast advertising for customer acquisition.

In terms of podcast listenership, there has been an interesting evolution over the past three to four years: Serial helped bring podcasts to mainstream listeners, and the industry capitalized on the increased listenership by producing content that has made podcasting one of the fastest growing mediums of the last decade. According to Edison’s Infinite Dial, we’re now looking at numbers that showcase podcast advertising’s potential for achieving not only solid reach, but great frequency as well:

• 37% of the US population (~104M people) listen to at least one podcast a month 
• 49% of people who listen at least once per week, listen to four or more podcasts a week
• 50% of podcast listeners tend to be early adopters to new forms of media or trends
• 50/50 gender split, with a skew towards younger, more affluent people with higher education levels than the general US population

Even though listenership continues to increase, the podcast advertising marketplace is still underdeveloped, and we’ve only standardized downloads as a metric in the past few years. As such, brand advertisers cite measurement challenges as the main reason they haven’t invested in the channel to date. Growth advertisers, on the other hand, are able to invest in the channel at a higher rate because they’re much more familiar with backing up to CAC and ROAS; they know how much to pay for inventory because they’re familiar with measuring performance directly and indirectly over time. This has put pressure on the marketplace to move more towards upfronts and annual buys.

How Has COVID-19 Affected the Podcast Advertising Space?

Podcast listenership has been largely flat to up for the first half of 2020. While most people are no longer listening to podcasts during their morning and evening commutes, we’ve found that there is now more steady listenership throughout the day. As far as genres are concerned, we saw a massive spike in news and a major dip in sports, although sports are already starting to recover now that many professional leagues have returned to the fields, courts, and rinks.

Overall, growth for podcast advertising is down about 50% from initial 2020 projections, but conversations with clients, networks, and publishers indicate that the back half of the year is starting to rebound heavily. What this means is that there is ample opportunity and inventory for advertisers new to the space.

The Pros and Cons of Podcast Advertising

Before reviewing whether or not podcast advertising makes sense for your business, let’s take a quick look at the general benefits and challenges of the channel.

The benefits

• Drives good conversion rates of qualified customers
• Reach and motivate niche consumers
• Establish category exclusivity and block competitors
• Host endorsement lends credibility to nascent companies

The challenges

• Little inventory aggregation, i.e. must maintain many relationships
• Manual ad buying process from RFP to invoicing
• Limited performance data is kept primarily by a few agencies

Does Podcast Advertising Make Sense for My Business?

We’ve identified several trends from working with a wide range of clients across industries. In general—though there are always exceptions—we’ve found that you’re likely a great candidate for podcast advertising if your business falls into one or more of these categories:

• Direct to consumer ecommerce
• Nascent brands with broad potential customer bases
• Products that require consumer education
• Advertisers who have already scaled other paid acquisition channels
• Advertisers in a competitive space who are first to market in their category in podcast advertising

On the other hand, you’re more likely to struggle with podcast advertising if: 

• Advertisers late to the medium in overly saturated categories
• Products or services with regional (vs. national) presence or product availability
• CPG without D2C component 
• Products with older (55+) demographics
• Brick and mortar retail 

Again, exceptions abound, and it’s important to remember that there’s no one-size-fits-all approach to podcast advertising.

How Do I Know if My Business is Ready for Podcast Advertising?

There are a number of indicators that can help determine whether or not you’re ready to take the plunge into podcast advertising. If you can check off most of these boxes, you’re ready.

• You have a stable user flow
• You’ve scaled paid social and/or paid search program and are looking to diversify your marketing channels
• You can create conversion rate optimized landing pages
• You have the budget for a meaningful test, ideally $50-150K+ over 7-10 weeks
• You have an established measurement methodology for indirect attribution
• You have internal bandwidth for asset creation (including engineering resources to build landing pages, people to review creative and give feedback, etc.)
• You have realistic expectations for results and you can afford to be patient to let the medium act as it should; if your boss expects immediate results, this isn’t the channel for you

Tips to Succeed with Podcast Advertising

If podcasts are a new channel in your mix, adapt your marketing approach to suit. Here are some tips for success:

• Don’t flight podcasts back to back—give at least one and up to three weeks between spot airings to follow the consumption cure of the medium, ensure your listeners don’t feel bombarded and you don’t lose the magic of the authentic host read
• Prioritize baked-in reads over dynamic insertion inventory if the primary goal of the program is customer acquisition/ROAS driven
• Test different genres and demographics; if you have a D2C food subscription product, food-related podcasts may not provide much incrementality, but news, female lifestyle and male comedy will
• Make the host a brand evangelist; provide onboarding materials and product for trial, if applicable
• Let the hosts’ personality shine through the reads and allow them to sound like themselves (here’s how to do that with your creative)

Pitfalls to Avoid

These are the most common mistakes we see for brands getting into podcast advertising for the first time.

• Don’t get fancy on your first test—stick to host read, embedded, mid-rolls; book multiple integrations per show; and space them out
• Good rule of thumb is 40-50 words of copy for every :15 of audio
• Spending too much or too little; spend in the range of what you normally do to get a clean read on new channels
• Don’t measure results and call the test before reach & frequency has a chance to compound; results often lag spot airings by 2-3 weeks
• Don’t rely solely on direct attribution - there is no quicker path to a false negative

If you'd like to check out our upcoming webinars, we've recently announced our Fall Webinar Series.

Interested in exploring podcast advertising for the first time, or looking for help scaling your current program? We’d be happy to discuss your efforts and see how we might help. Send us a note at hello@rightsideup.co and we’ll be in touch.