It is no secret that podcasts are booming. The medium has been growing for years, and analysts once skeptical are now reporting that this growth is expected to continue. More than half of the US listens to them regularly, and 65% of listeners have only started in the last three years.
With such popularity among consumers, it’s no wonder that brands are taking notice. Research suggests that podcast listeners are unusually loyal, with 80% listening to every episode in its entirety.
Amidst these recent successes, there are two camps forming. One says this format is poised to become a necessary part of any successful marketing mix, because the audience is particularly engaged, and the growth is clear. The other questions this excitement, pointing out that “the next big thing” can often be a distraction not worth chasing.
So which is it? Are podcasts a silver bullet for revenue generation, or a distracting red herring?
Beware ‘The Next Big Thing’
With all this attention on podcasts, it’s no wonder our digital revenue panel at Lineup System’s 5th Annual User Conference began with a podcast question. The panel’s digital experts, Ellie Edwards-Scott (The Advisory Collective), James Rooney (The New York Times) and Bedir Aydemir (News UK) all agreed podcasts are worthy of discussion – but their advice suggests publishers and brands alike should take the time to understand their goals before jumping on the podcast bandwagon.
Ellie spoke enthusiastically about podcasting’s potential from the brand perspective, but she followed this excitement with an immediate caveat: “There’s always a ‘next big thing’. [Podcasts] may be brilliant but look at how they fit into an overall plan. Don’t look at podcasts as siloed – they have to fit into your overall objectives.”
As brands scramble to get into podcasts (directly or through sponsorships), publishers would be wise to step into the gap and show brands how to fit podcast sponsorship into broader multichannel campaigns. After all, a brand-new podcast is only a reasonable revenue opportunity if aligned with advertiser (and audience) needs.
The New York Times has modeled this well with their popular podcast “The Daily.” James Rooney explained how a single story becomes a revenue generator across multiple channels:
We publish several hundred articles a day, and one of those articles each weekday becomes the basis for The Daily podcast. During that podcast, one of our esteemed journalists, Michael Barbaro, gives the story behind the story, interviewing the journalist who wrote it and other people who were involved in that piece of content. So from that one piece of content, that original journalism, we actually have two more degrees of revenue opportunities, and within those, we can diversify the revenue streams even more.
Is Podcast Revenue Scalable?
To assume that The New York Times’ podcasting success would easily be replicated by smaller publishers is unrealistic. Bedir Aydemir (News UK) raised the question of podcast scalability during the panel for this reason, saying:
Everyone’s talking about voice now and I know podcasts are being seen as a sort of golden opportunity. I think that one of the problems now being addressed is around tracking [and attribution]. But I do have [another] concern with audio, in terms of the monetization of it. I’ve not seen a scalable solution beyond sponsorship. How many ads can you inject into a podcast?
Though podcasts have become ubiquitous, monetization has not kept pace, revealed the Interactive Advertising Bureau earlier this year. Simply put, there are limits to a sponsorship model. Some publishers are looking to AI-enabled voice technology to solve this problem. Bedir pointed out to the panel:
Google, Amazon, and Facebook have developed the ability to turn any piece of text into voice in real-time. Suddenly you then have to think: what is a podcast? What is audio? If every single article can suddenly become an audio piece, does that massively scale it out? If people choose to consume [the same media] by audio rather than by print, great. That’s a massive opportunity.
But for others, it’s hard to believe that the “Hey Alexa” and “Okay Google” style of voice search will rival the success of the podcast format. Michelle Manafay (Digital Content Next) wrote in Inc. Magazine:
Unlike its audio predecessor, radio, podcasts offer unrivaled intimacy. Often a headphones-on experience, a podcast isn’t background noise, skimmable, or swipable. Podcasts provide the kind of lean-in experience that actually harkens back to radio’s early days when families would gather around and listen to breaking news or serialized entertainment with rapt attention.
Podcasts are neither a one-size-fits-all revenue generator nor irrelevant. Their growth potential is undeniable, but as the medium booms, some publishers will successfully add it to their media mix and others will fail. The keys to success? Have clear goals, focus on quality content, and be sure to communicate to advertisers how your podcast offering can fit into their overall multichannel strategy.