What's Really Driving The Limitless Growth Of Podcasts

At the DigitaLatest Conference at Industry City, Brooklyn this past August, where leading established and recently skyrocketing digital marketing platforms, tools and technologies presented latest capabilities and user trends, two of the fastest growing digital formats were at opposite ends of the time spectrum.  David Rosenberg, head of business development at Giphy, talked about the rapid growth in popularity of short form content: 3-second gifs that often convey meaning and emotions, like different types of love or humor, more effectively, memorably and virally than words, and short-form, 6-second ads that have become widely adopted.

In contrast, Lex Friedman, chief business development officer at Midroll Media, the largest global podcast content producer and a pioneer in the field, talked about the explosive growth of long form podcast listening over the past 12 years to an estimated 67 million people in 2017, approximately the same number that listen to Twitter on a monthly basis.  That was roughly 25% of the U.S. population over age 12 in 2017, up 45% from 2015, and up 180% from 2009.  Podcast penetration is strongest among the 18-34 demo, which can be difficult for many advertisers to reach.  The average podcast is 45 minutes and the average podcast ad is 90 seconds… much longer than traditional ads.  A remarkable attentiveness measure according to Edison Research, is that 85% of people who listen to podcasts, listen to the end.

data-param-cid="62cec241-7d09-4462-afc2-f72f8d8ef40a"
data-player-id="44f947fb-a5ce-41f1-a4fc-78dcf31c262a"
data-playlist-id=3e5e03f9-7925-4400-8f37-b4daede06b7f
data-elements-player="true"
layout="responsive"
width="16"
height="9"
>

Midroll just passed an important milestone, signaling mainstream adoption of podcasting as a marketing tool.  While direct response firms were the first major supporters of the platform, traditional brands now make up 50% of Midroll’s ad revenue.  Podcast listening seems to be habit forming.  According to the 2017 Edison Research study, the average podcast listener listened to five podcasts per week.

Because most podcast ads are:

- Read by podcasters, whom listeners have chosen to hear for the full duration of the podcast, and like and trust

- Much longer than other ads, with more content and information

- Harder to skip

- Less predictable than other ad forms, due to the presenter’s customized “spin”…

traditional ad evaluation and effectiveness scores tend to be high relative to other forms of advertising, for important metrics such as:

• Aided and unaided recall
• Key message registration
• Percent of people listening to the entire message

What’s Behind Podcast Growth and Why It’s Expected to Continue

Podcast growth is a virtuous cycle and aligns with important trends:

• It’s perfect for on-demand, content binge consumption, which users have become accustomed to from other media.
• It’s perfect for customized/personal curation. You listen to what you want, when you want.
• As the audience grows, there’s more incentive for quality content producers and celebrities of all types to jump in with their own shows, which in turn attracts more listeners. This includes a wide variety of A-listers like Dr. Phil, Jonathan Van Ness, Katie Couric, Ricky Gervais, Gwyneth Paltrow and RuPaul.
• Ad revenue is growing rapidly, which in turn attracts higher cost talent and quality production to the format. Element Media Direct estimates growth rates in podcast ad revenue of +72% in 2016 vs 2015, +85% 2017 vs. 2016, +80% 2018 vs. 2017, and +50% 2019 vs. 2018.
• With an average of only 4 minutes of advertising in an hour vs. 16 for TV, there is less annoying ad clutter and less reason to try to ad block, or leave to do something else while the ad is running.
• Podcast CPM’s average $24 according to Bridge Ratings. While these aren’t low relative to other media options, the ROI must be positive, judging by repeat usage of the platform by more and more brands.

Why Podcast Listening Is Expected to Keep Growing

• Going forward, many new cars (where a lot of podcast listening happens) will have internet connections, making the podcast download process much quicker
• There will be a podcast button on your mobile phone and computer that can synchronize with your car’s internet or Apple Watch so if you start on one device, you can continue where you left off with another
• Apps on devices will make podcast listening easier and quicker to access. You’ll be able to more easily access them from @ handles on Twitter and hashtags on TV.
• Growth in Alexa, Google and Siri voice recognition will also make accessing podcasts easier and widespread.
• The new Apple watchOS5 brings Apple’s podcast app to the watch for the first time and the speaker is louder, which will make it easier to hear and more satisfying to listen to podcasts.
• As ad effectiveness measurement for podcasts continue to improve, it’s likely podcasts will show a favorable ROI, which in turn will give advertisers more confidence to invest in the platform.
• Brands like Pepsi, Starbucks, Google, Microsoft and Tinder have jumped in and increased their use of the ad format, indicating they are seeing positive results. These marketing trend-setters inspire other potential advertisers who haven’t yet dabbled with the platform.

Brand Podcast Advertising Done Well

Some of the best, most engaging brand podcasts thematically support and add value to the brand’s positioning and values. A range of examples includes:

• Casper’s In Your Dreams with Chris Gethard and Gary Richardson that helps people interpret their dreams
• Blue Apron’s Why We Eat What We Eat
• Trader Joe’s that explains what’s behind their product development and sourcing
• Slack’s Variety Pack, with stories about work, office culture, teamwork and innovation
• MasterCard’s Fortune Favors the Bold about the future of money

For those brands that have not already jumped in, it might be worth a try.  The content needs to add value to consumers’ lives or it won’t be worth their time to listen.  If the content does add value and engage the target, a branded podcast can be a real win.  I even have a podcast about innovation.  I was interviewed about new ways companies can make their firms more innovative in a Google Partners Partners podcast with Alex Langshur, founder and co-CEO at Cardinal Path, part of the Dentsu Aegis group.