Podcasts are huge right now. Everyone’s listening to them - in the car, on the bus, on their evening jog - and everyone has their favorite genre. Maybe you’re into politics, comedy, true crime, talk shows or one of the more niche pods out there amongst the 750,000+ shows you have at your fingertips. Podcasts are attractive for a lot of reasons, and chief among them is that they’re usually free to listen to. How is that possible in a digital economy where everything costs money (with the exception of Amazon Prime 2-day shipping)? It’s simple: podcast sponsorship.
For any given episode, listeners can typically expect to hear about a mattress, a food delivery service, a website hosting service or any number of other products inner-mixed with the episode’s content. Podcast sponsorship has exploded in recent years as more and more brands explore this new alternative to radio that is accessible on our smartphones. According to the Interactive Advertising Bureau (IAB), podcast advertising is expected to surpass $500 million in 2019 and reach $659 million in 2020. That may seem like chump change compared to other media channels such as print and television, but what is most eye-catching to us is the rapid growth. In the last two years, investment in podcast advertising has increased by 65% in an era when a lot of other ad spending is shrinking.
Being such a new advertising channel, we are all finding ourselves pondering the same question: is advertising on podcasts actually worth the investment? Podcast sponsorship currently faces the same challenges that audio has faced since the first radio ad aired in 1922 - how do we know it’s making a difference?
The Pros of the Pod
Podcasts are one of the rare media channels where the audience actually approves of ads, which is fantastic for advertisers always looking for new ways to grab our attention. 78% of listeners approve of the ads they hear in their podcasts, probably because they make the content free to consume. On top of being a place where advertisers can feel wanted and needed, podcasts have some other great attributes to consider.
Pods are Popular: The number of podcast listeners has been steadily growing along with the number of new shows available. 144 million Americans (51%) have listened to a podcast as of 2019. And by 2022, the podcast audience is expected to grow 81%, according to Edison Research’s Infinite Dial 2019 study. Not only are they a popular form of entertainment, but they’re also highly engaging for their audience. 80% of the general podcast audience listens to most or all of each episode, and they listen to an average of seven shows each week.
Pods are Mobile: Most people listening to podcasts do so via their smartphones. Apple, in particular, has a long history of nurturing a strong podcast platform. Because of this, most listening happens away from home. 51% to be exact. Whether they’re commuting, exercising or at work, the mobility of podcasts puts the target audience closer to the point of purchase, especially if you have physical locations or stores for them to visit. Similarly, you know listeners are likely using their smartphones, making it easier for them to look up your brand or visit your website.
Pod Listeners are Great People (for Your Brand): We don’t know if they’re all great people in general, but we can be reasonably confident that the people hearing your podcast sponsorship ad are more employed, educated and active on social media than the average American. 45% of monthly podcast listeners have a household income exceeding $75k (compared to 35% of the general population). 27% of podcast listeners have a four-year college degree (compared to 19% of the general population). They’re also more likely to follow companies or brands on social media. The best part, though? They’re actually listening to your ads. 69% of listeners agreed that podcast ads made them aware of new products or services, according to Nielsen.
The Power of the Pod
For advertisers, podcast sponsorship can move the needle on several important metrics, positively influencing consumers’ opinions and purchasing intentions.
Increasing Brand Awareness
The ads can be a memorable part of the episode for listeners, especially when they’re personalized by the hosts themselves. After all, the host or hosts are the reason the listener showed up in the first place. Podcasts create an intimate relationship between host and audience. Both parties in the relationship are interested in the content being shared, and the audience has decided to join the creators of their chosen podcasts each episode to listen in, learn something or just laugh. Any effective advertising is built on fostering loyal audiences, and podcasts succeed.
Having these same people share information about a product or service with their listeners ensures that you’re tapping into the same level of engagement listeners have for the rest of the podcast. The better integrated the ad, the more successful it will be.
According to the IAB Podcast Playbook, 67% of podcast listeners are able to recall the names of products or services featured in ads. Associating your brand with a podcast also creates more favorable impressions for its listeners. They already trust the content or they wouldn’t be listening, so your ad can piggyback on this credibility.
Influencing Purchasing Decisions
It’s not enough to have people hearing your ad and remembering your name. Podcast sponsorship needs to be able to encourage people to buy. If your ad has been well-targeted and paired with the right podcast, you can do just that. With the hundreds of thousands of podcasts out there to choose from, you’re sure to find your perfect match, even for the most niche audiences. The IAB Podcast Playbook reports that 61% of listeners surveyed said they actually paid for a product or service they learned about through podcast advertising. Lesser percentages of listeners reacted in other ways, too, such as doing further product research, talking to a friend or visiting a brand’s website or physical location.
Proving the Power
For all of the potential benefits of advertising on podcasts, advertisers still face the challenge of tracking and analyzing the output of this advertising channel. There are several ways we can gain insight into our podcast sponsorship efforts, but none of them are entirely reliable.
Direct Response: DR is one of the most popular methods for tracking ROI of a podcast ad. Essentially, the call-to-action contains a custom offer code or vanity URL that listeners can enter to receive a discount when they purchase the product or service. With this method, brands can easily attribute which podcast resulted in a conversion by the code they entered or URL they followed. However, since there is no direct link between the ad and the destination, it’s difficult to know how successful an ad or a podcast is at generating conversions. DR depends on consumers remembering a code or a URL, and consumers have terrible memories.
Number of Listens/Downloads: Following the number of listens or downloads is a simple metric that can be a good indication of popularity and audience engagement for a given show. While it can be used to show how many impressions your ad received, it doesn’t give you any insights into the level of impact your ads have on listeners.
Brand Recall Studies: If you have the time and resources, you can always conduct your own brand research. These studies measure consumers’ ability to recall the name of your brand without having to be prompted. Various studies have been conducted around the industry over the years, and they usually indicate high recall rates associated with podcast sponsorship. However, many people don’t have the bandwidth to administer this kind of research themselves.
Finding the Right Podnership
The key to a fruitful podcast sponsorship strategy is aligning your brand with the right shows. By focusing on shows whose audiences overlap with your target, you can be certain your brand’s name is making it into the right ears. Unlike programmatic media buying platforms, most podcast ad spots are sold directly, giving you a great deal of leeway in negotiating the kind of ad you want to run. This also means the process can easily become convoluted with all of the back-and-forth.
To ensure that your ads come out like you want them to, are paired with the right types of shows and result in the kind of measurable ROI you can see and learn from, partner with The Ward Group. Our media buyers and planners have a long history of working with audio and tackling new trends such as podcast sponsorship. If you’re ready to start reaping the benefits of this engaging, mobile, audio format, contact us today.