What is it?
A little history, the concept of podcasts arose in 2004 from the combination of the iPod and broadcasting. RSS feeds were instrumental in the development of podcasts. In short, an RSS feed acts as a web feed to push updated online content from the website to the user rather than the user having to for the content. This was important for podcasts because it was a method to move MP3 files to subscribed audio players resulting in the current digital broadcasting format. Now, marketing makes its way into the combination. “Baked-in” and “Dynamically Inserted Ads” disseminate an advertisement either by the host during the show or inserted as a pre-recorded bit by the company respectively. While these direct response ads account for the majority of podcast advertising, branded podcasts are on the rise increasing their $69 million revenue in 2015 to $220 million in 2017 according to Target Marketing. Branded podcasts are the collaboration between a brand and a media company to produce a podcast that grows to market the sponsoring brand. They give the audience an affinity for the brand as they can “create a deeper connection to consumers that is hard to come by in a 30-second” advertisement, as explained by Fast Company’s Melissa Locker.
These forms of advertising are not only applicable to United States. While the US falls into the top 5 podcast-listening countries, Statista shows that South Korea tops the list with 58% of respondents who listened to a podcast in the past month. Spain, Sweden, and Australia follow in the 33%-40% range of listeners. Podcast advertising may serve as an important channel worldwide, not just domestically.
The Big Picture
Now: Baked-in/dynamically inserted ads are on the rise and branded podcasts are becoming increasingly more popular.
Next: Most big brands capitalize on podcast marketing and create their own content.
Future: As they continue to gain channel share, podcasts may become the main channel (edging out the radio and tv newscasts) to share information, tell stories, and disseminate news, etc. and thus, the best way to reach users.
Podcasts are a very engaging and versatile form of media in a time where millennials bounce from one platform to another. Millennials have become somewhat unreachable because they have a “mobile-first mentality” and they gravitate to more “streaming, on-demand programming, and self-curated content,” according to Forbes. However, podcasts seem to be attracting the most difficult to reach. As The Mission explains, “podcast listeners are the smartest, most educated, most affluent…AND represent some of the hardest to reach millennials on the planet.” Thus, with proper branded podcasts or effectively placed advertisements, a brand can access and capitalize on the most difficult demographic to reach.
By the Numbers
- Podcast advertising spending is likely to more than double as we approach 2020 from $200M to $500M following the growth of podcast listeners in America (9% to 40% since 2009) – The Mission
- 48% of monthly podcast consumers follow companies or brands on social media, whereas only 31% of the general US population do (ages 12+) – The Mission
- “Podcast Listeners Have Spectacular Brand Recall” → 80% could recall at least one brand advertised in an episode and 51% were somewhat or much more likely to buy from the target brand – The Mission
- NPR found that 75% of listeners acted on a sponsored message such as visiting the sponsor’s website, considering the product or service, purchasing the product or service, etc. – Fast Company
- 65% of podcast listeners more likely to purchase a product if they heard about it on their favorite podcasts – JWT Intelligence
Millennials have a buying power of $1.3 trillion in the United States and as they become more difficult to target, our ability to capitalize on their potential deteriorates. Podcast audiences are attracted to the ease and efficiency of podcasts. But further, podcasts offer an in-depth and authentic presentation of the news that takes you further into the story than traditional newscasting can. Podcasts not only attract the niche crowds that appreciate these takes, but they lock them in. If presented in an he honest and intimate nature, podcasts keeps listeners drawn in and as marketers, we can capitalize on this loyalty. Through branded podcasts, “baked in,” and “dynamically inserted ads,” we can work to create more effective and comprehensive targeting and marketing strategies. Not only are podcasts a channel for HZ to explore, but further a medium we can use for our client content creation.