The podcast industry is exploding but lacks potential profit margins
Just about anyone can do a podcast and many people with no broadcasting experience do a pretty damn good job of it. They go out, get podcast equipment, set up a podcast studio, read online about how to record a podcast, get a podcast logo and then produce a podcast. But they know little about brand development and ad agencies.
As we have consistently discussed on this site, we are not big fans of middlemen. Why should you do all the work and give half or more of the profit to someone to do what YOU can do? We are pro entrepreneur and pro branding on this site but we understand everybody is not cut out to be an entrepreneur.
While this article discusses how to get more ad agencies onboard for media buying for podcasting you can also make your OWN money as well which we will discuss in another article.
Today, fans can find a podcast for just about everything like an ESPN podcast, funny podcast, NBA podcast, educational podcast and even most listened to podcast lists but the industry is not getting the media buys it needs better and bigger shows and better measurement is needed in order to get more digital ad buys.
Both sellers and agencies/advertisers give “poor” marks on the current state of podcast measurement, though there is a sense that things are looking up.
Only 5% of brands and agencies rate podcast measurement and attribution as “excellent.” 10% of sellers indicated the current state to be “excellent.” 48% of sellers say measurement is only “fair” and 24% indicate it’s “poor.” A whopping 64% of the buy-side say it’s “fair” and 19% deem it “poor.” Compared to prior years, 48% of sellers and 43% of agencies/brands indicate the current state of attribution and measurement is getting better.
Podcasting needs a monthly reach of 44% to hit the tipping point of meaningful advertiser investment.
Sellers and buyers both indicate podcast monthly reach will have to grow +12 points for spending to hit an inflection point.
To become a $2B ad medium, podcasting needs better measurement, attribution, bigger shows, and bigger brands.
When asked what it will take for podcasting to become a $2 billion ad medium, most of the responses centered on improved measurement and attribution. Some indicate content will need to step up. Others note podcast discovery and search needs improvement. A number feel big marketers coming into the podcast space will be a major accelerator.
Dynamic ad insertion (DAI) now represents 61% of seller orders and 55% of agency buys.
76% of sellers say they are using dynamic ad insertion. Slightly fewer buyers (two-thirds) say they are using dynamic ad insertion. Sellers say DAI represents 61% of their orders. This is slightly more than podcast agencies and advertisers who peg DAI as 54% of orders.
What are the most used podcast test buy parameters?
Agencies/buyers believe a good podcast test buy includes 5 podcasts, 3 ads in each podcast, for 7 weeks. Sellers say a good podcast test includes 5 podcasts, 2 ads in each podcast, for 5 weeks.
Attribution services receive positive evaluation and strong purchase intention. Buyers love attribution. The sell-side – not so much.
The sell-side is more aware of the new measurement services compared to the buyers. Brands and agencies rate attribution firms with a strong 28% “excellent” ranking while not one seller could muster an “excellent” rating. When it comes to executives saying they are very likely to accept or utilize a service, buyers and sellers are in general agreement. Opinions diverge again on the issue of attribution. 42% of podcast buyers say they are very likely to use a podcast attribution service. Only 25% of the sell-side say they are very likely to use podcast attribution.
source Westwood One
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