There’s some debate as to whether podcasting – that is, the consumption of podcasts, is a significantly growing area worth investment of time by producers of audio content. Read Kurt Hanson’s summary of the debate here. I’d like to weigh in with some thoughts from a business perspective.
The appealing thing about podcasts is that they provide audio content that the listener controls. In order for a listener to want control over audio content it has to be good. It has to be good enough for me to want to download, sync, and carry along for times when I can’t listen live OR it has to be good enough for me to want to listen to it instead of what I can listen to live.
We live in an age where pursuit of and control over content is desirable. Podcasts are not mass marketing tools. But they are by nature highly engaging. The fact that I go to the effort to find, download and sync several podcasts on a weekly basis demonstrates that I am engaged with that content. Actively, not passively. Advertisers are looking for of engagement. So, podcasts are an opportunity for content producers to increase the effectiveness of a campaign.
Where’s the Money?
So what’s the revenue model? Audio ads must be embedded or stitched into the content. The Wall Street Journal podcasts open with a tease or headline after which the audio ad runs. This is ideal for the advertiser because they are within the actual content. There is some debate about whether a downloaded podcast equals a listen – since once it’s on my ipod no one actually can verify delivery of the ad impression. BUT ITunes cleans off podcasts I have listened to every time I sync. So if I subscribe but don’t listen, I do not continue to receive that podcast and count toward more and more impressions.
Podcasts are valuable for the degree of engagement that they have with the listener. It’s not about the number of listeners who are reached, but how they are reached. The business model for podcasts relies on understanding and selling through that value at higher cpms, either as standalone campaigns or blended with other station offerings. This gives advertisers exposure to the audience in a highly engaged format and can increase a campaign’s ROI. Which is of course the bottom line.