Ready, Set, Record: What Podcast Popularity Means for Advertisers

2016 in many ways was the comeback year for podcasts, though listening has been steadily increasing since 2013. According to a study conducted by Midroll, 36% of Americans reported having ever listened to a podcast and 21% had listened within the past month.

Also in 2016, Nielsen announced that it would include podcasts as part of its Digital Audio Rating Service.

Podcast growth is driven by an increase in demand for mobile entertainment, it has an active user base on par with Twitter and podcast listening grew 23% between 2015 and 2016 alone. Further evidence of the renaissance? As of fall 2015, 30% of the podcasts on iTunes had been launched between 2014 and 2015.

There are podcasts for every subject – comedy, film, news and marketing; hosts include big names in popular culture like Neil deGrasse Tyson, Marc Maron and Malcolm Gladwell; guests are movers and shakers from comedians, to writers, to President Barack Obama.

There’s no denying that podcasts have come of age, so what does that mean for brands?

Why It Matters: The Audience

The podcast audience has a higher median income than the general US population, and on average these high-income listeners listen to over four hours of podcasting per week. This audience is mobile, loyal, engaged and young and they take action.

Midroll, a podcast advertising network, conducts surveys each year to measure the impact of advertising through podcasts. What they found is pretty amazing:

• It’s actionable: 61% of podcast listeners have made a purchase based on podcast advertising
• Brand recall is impressive: 80% of listeners are able to name at least one brand advertised in an episode, and 67% are able to name a specific product feature or promotion.

Everything about podcast listeners suggests that they are an ideal audience for brands. They don’t mind the conversational, 30-second mid-roll because podcast hosts are more closely related to influencers than advertisers. And as a result, their opinions are really taken to heart.

Measuring Success

Here’s where things get tricky. One challenge to advertising on podcasts is that it can be difficult to measure ROI. Listeners can say that they intend to make a purchase based on an endorsement (as 51% self-report that they do), but how can brands really be sure? One trick has been to offer promotional codes – that way 10% off of a Squarespace purchase by using the code “WAIT” (the promotional code for NPR’s, “Wait, Wait…Don’t Tell Me!”) tells a brand exactly where their customers are coming from.

But overall, the metrics here are still crude and measuring the success of a podcast based on downloads excludes streaming audiences and may over-count some listeners due to issues of repeat downloads and other technical malfunctions. It’s a major problem facing podcast sponsorship because, quite simply, it always feels better to know exactly how advertising efforts are being repaid.

Lessons and Applications

Influencer marketing has been rooted in blogs and Instagram for ages, but as audiences become more mobile, podcasting is beginning to look more attractive. The truth is, despite issues of measurement and metrics, the podcast audience is a good-looking group for advertisers and in this respect it’s an under-tapped opportunity.

Because advertising spend in the world of podcasting is so much lower than in other media, it’s possible that advertisers can reach these key audiences with less competition and fewer dollars spent. Sling Media, just one brand advertising on podcasts, saw two to three times more engagement in podcasts than on radio – and consider, advertisers are spending around $35 million on podcasts and $18 billion on radio each year.

It’s an exciting new avenue for advertisers to explore, though not without caution. But if growth continues the way it has, and more advertisers turn to podcasts, the metrics will follow and become more sophisticated, making the ROI issue a thing of the past.