How To Make Podcasts Profitable

It’s been about ten years since smartphones, iTunes and the popularity of yakking personalities like Ricky Gervais, Bill Simmons, and Adam Corolla turned podcasting into a mainstream activity.

A decade later and podcasting is still a rising medium.  About 45 million Americans listen weekly and 70 million do so monthly.  That’s higher than movie attendance.  And with 350,000 podcasts to choose from, there’s a podcast for any interest or obsession.

There have been some legitimate break-out stars too.  The first season of “Serial” became a national obsession, with more than 230 million downloads.  Marc Maron’s “WTF” has become a must-have promotional spot for everyone from President Obama to Norm MacDonald. The podcast “Missing Richard Simmons” briefly launched hundreds of news reports about whether the former exercise mogul had been kidnapped by his own housekeeper.

President Obama on Marc Maron’s “WTF”

Advertising on podcasts is also growing fast, albeit from a minuscule to a tiny level.  According to report the IAB and PricewaterhouseCoopers, podcast ad revenue has grown by 85 percent since last year and is on track to reach more than $220 million in 2017.  But that’s only about one percent of the total ad market, not much penetration for a decade-old medium.  How, then, do we increase the value of those ads and make podcasting more profitable?

I’ve been listening to a lot of podcasts, which means listening to a lot of podcast ads. There are two phenomena that demonstrate this is still a nascent medium.  First, there’s a remarkable dearth of ads from traditional mainstream advertisers.  I’ve recently noticed that American Express and Gillette have started to dip their toes into podcast advertising but most advertisers are e-commerce companies or low-end brands: Squarespace, Stamps.com, Harry’s.com, Blue Apron, etc.  All great products, I’m sure, but nothing you’d expect to see advertised on a network TV show.

I also can’t help but notice that almost all the ads are either read by the show hosts.  The previously cited IAB and PricewaterhouseCoopers study claims that these host-delivered ads are the “most effective,” whatever that means.  I doubt the research is definitive and it wouldn’t surprise me to learn that same argument was made back in the 1950s, when TV hosts routinely plugged advertisers themselves.

To me, a medium in which the hosts still read the ads reeks of amateur hour.  And to make matters worse, most of these ads direct listeners to a website where they can plug in a “promo code” to make a purchase and give the podcast credit for the sale.  This is like the early days of the Internet, when pop-ups were judged by their click-through rates.

Podcasts won’t be a mature advertising platform until major brands like Coke, General Motors and Procter and Gamble decide that podcasting is a good space for professionally produced brand-building ads.  And that won’t happen until there is good ad measurement to ensure that people are actually listening to their commercials.

Today no advertiser knows what the audience is for a podcast.  The standard measurement of a podcast’s popularity is downloads but that doesn’t tell you anything about actual consumption.  I subscribe to both “Fresh Air” and “Serial,” two of the most popular podcasts; I listen to about ten percent of the “Fresh Air” interviews but have consumed every second of both “Serial” podcasts.  But that’s me – maybe there are others who dote on Terry Gross’s every word. Only a metric that actually measures listens will tell us.

Podcast ads face another challenge too.  In television and radio you can more or less assume that the ”average audience” for a show (which is the average number of people listening at any time during the entire episode) is more of less the number of people consuming the ad.  That’s because TV viewers and radio listeners are constantly tuning in and dropping off, so consumption is roughly the same throughout the entire length of the show (unless there’s a large amount of DVR playback.)

But hardly anyone will start listening to a podcast half-way through playback.  And in certain genres, like celebrity interviews, the drop-off can be pretty significant.  I’ve almost never made it all the way to the end of a Marc Maron interview, for example, and have no idea whether there are even any ads at the end of his show.

The most obvious company to measure podcast consumption is Apple, which provides the major platform for podcast downloads.  If they could capture podcast playback on iPhones they would have the closest thing to a census-based (as opposed to panel-based) measurement that the media industry has ever had.

The next most obvious candidate to measure podcasts is Nielsen, which has the experience, methodology and technology for the job.

As it turns out, both companies are working on some form of measurement.  Apple has announced it would begin giving creators consumption metrics and Nielsen has begun to offer general insights on the buying habits of podcast listeners, with more detailed numbers reportedly on the way.

If these two companies can come up with reasonably credible metrics then podcasting might finally take off as an advertising medium.  Ironically this might mean fewer podcasts as advertisers flock to the biggest shows and leave the scraps for everyone else.  But more money in the medium can only mean a higher overall standard for all.  Bring it on!

 

 

 

 

 

“I’m A Reader” and Other TV Snobberies

Thank you Shailene Woodley for insulting all TV viewers and creating a moment of national unity that has eluded our national leaders.

Appearing on the red carpet of last month’s Emmy’s she announced that she hasn’t owned a TV since she moved out of her parents’ house when she was 18 and thus couldn’t watch any of the nominated shows.

But even if she did own a TV, Woodley implied, she wouldn’t have watched the nominated shows anyway because she’s too busy pursuing more intellectual pursuits: “I always ask [friends who watch TV] — when do they have time to? When do people have time to? I’m a reader, so I always read a book instead of checking out my TV.”

The reaction was swift and unified, setting off a Twitter-storm, which boiled down to:  how could someone who was richly compensated for being on a TV series (“Big Little Lies”) and then nominated for said performance appear on a TV awards show to insult everyone tuned in on the very household appliance she found so time-wasting?  If TV is such a brain-suck why didn’t she just stay home that night and read Tolstoy?  Apparently one of the books she WASN’T reading was “Miss Manners’ Guide to Excruciatingly Correct Behavior.”

We can all laugh at the cluelessness of young actresses, but who among us hasn’t encountered that same anti-TV attitude at a cocktail party or around the office watercooler? Is it really possible that these people missed the memo that the most important work in the visual arts is being done on TV? I mean, isn’t that why Shailene Woodley, Nicole Kidman, Reese Witherspoon and Laura Dern were all in “Big Little Lies” in the first place – because TV is now the place where actors can really stretch?

I don’t know if Shailene Woodley thinks she’s special because she doesn’t own a TV, but she’s actually a conformist in her demographic. Of course she doesn’t have a TV! She’s 25 years old. I’d be more impressed by her originality if she didn’t have a smartphone.  In fact, what I’d really like to know is the proportion of time she spends reading vs. looking at a smartphone.  The iPhone, not the television, is what rots brains these days.

The anti-TV snobs like Shailene Woodley have always been with us – and in certain decades there was some justification for that attitude.  But what’s new these days are people who watch TV but actively disdain legitimately good shows – the anti-snobbery snobs.  I guess they think that viewers of “peak TV” are looking down on them so they get preemptively defensive, as in, “I watched 15 minutes of ‘Mad Men’ and thought it was boring.  I can’t understand why you like it.”

Somewhat related to the anti-snobbery snobs are the anti-popularity snobs – those who brag that they never watch the highest-rated shows.  A few weeks ago, some of us in the office were discussing “Game of Thrones” when our CFO, who was not part of the conversation by the way, felt it necessary to interject that he’d never watched it.  Now there are many legitimate reasons not to watch “Game of Thrones,” but he definitely left the impression that the fact that so many others were watching was a factor in his avoidance of it.

Of course he then undercut himself by then telling us that our highly regarded outside counsel had recently admitted that he was a “Game of Thrones” fan and that because this well-known lawyer was watching the show, well, maybe he’d check it out too.  Which prompted the rest of us to observe that when WE said we were watching “Game of Thrones” you weren’t interested but when the lawyer said he was watching you were willing to give it a try.

The bottom line is that people today are too quick to define themselves by what they don’t like on TV.  Maybe it’s time we all just stopped judging each other for our TV choices.  Instead of airily dismissing what someone else watches, maybe you could ask why they like that particular show or genre.  We might learn something about each other for once.