Last year more people listened to podcasts than ever before, and that number will continue to grow. That’s info we’ve had for a couple of months from the Infinite Dial annual study from Edison Research. Last week we got a bunch of new specifics to go with that info. Some of it is rather predictable – podcast consumers are more affluent and educated than the population at large, they are more male than female, and the bulk of the listeners are 18 – 54 years old.
The survey asked people about their “method of listening to podcasts”, and from that we learn that 59% of regular weekly podcast listeners usually “Click on podcast and listen immediately.” The other choices are “Download manually to listen later” and “Subscribe to and download to automatically to listen later.” It’s tempting to conclude that 59% of weekly listeners are now streaming podcasts. Not so fast. “Click on podcast and listen immediately” does represent on-demand behavior, but it does not equal streaming.
Say you want to listen to Serial. You have a few choices of how to do that. You can go to Pandora, and “Click on podcast to listen immediately,” or you can open your podcast listening app on your smartphone, where you have the choice of streaming it, downloading it, or subscribing to it. Streaming it is a fine choice if you’re planning to stay connected while you listen, but if I’m planning to listen while running, or walking, or getting in my car I choose download so I can have offline listening if I want it. I’m still clicking and listening immediately, but I’m not streaming. This isn’t a meaningless nuance. Part of the appeal of podcasts is that you can download and listen on or offline.
The bottom line of course is that podcasts are consumed more and more in an on-demand fashion. Click and listen immediately includes two different technical options – streaming or downloading, but it does translate to on-demand behavior. It would be nice to know the data within that segment, but it’s possible that trying to get more specific with that question would only confuse casual podcast consumers. As an additional data point we have this chart tweeted out during the data presentation last week, which shows that most listening is still via downloads rather than streaming (this is the activity of one podcast, not the industry):
The immediacy of listening is a selling point for the medium, since advertisers like to buy placements for their ads that are going to be heard within a certain period of time. A transition to streaming is certainly beneficial to the ad supported model – it’s easier to count connected listeners, monitor session length, and confirm that a listener heard an ad when they are continuously connected. But knowing that they clicked and listened immediately, either by streaming or downloading, makes ads at the beginning of the podcasts a lot more attractive to advertisers as well.
Podcast consumption is moving to on-demand. Immediate consumption in any media is a good trend, which lends itself to greater time spent listening. By introducing the “Click and listen immediately” phrase, Edison Research has given the industry a nice way to represent on-demand listening that merges downloading for immediate listening and streaming into one behavior that’s appealing to advertisers.
Podcasting is the audio hotbed of the publications industry. The driving force behind the growth in popularity of podcasts is the diverse and very high quality of the content. The reason behind this expansive selection of excellent listening options lies in the fact that journalists and publications – creative, talented writers – are producing it.
Media companies have seized the podcast opportunity. The New York Times just launched a new audio unit focused on podcasts, Slate’s Panoply is a “podcast network that connects sophisticated listeners with top publishers and thinkers” – among them, WSJ, Rolling Stone, Vanity Fair, Inc.. Check out any newspaper’s site and you’ll find a selection of podcasts.
The shift from print journalism to podcast journalism makes a lot of sense economically. Publishers, from large and small newspapers, to magazines, have suffered huge losses in readership and revenues over the past decade. Meanwhile, consumption of Internet media keeps growing and growing, taking bites out of all forms of traditional media, according to this chart from Pew Research (BIA Kelsey data). Bad news for print, but good news for podcasting.
With all of this great content comes the need for more innovation, particularly in the form of podcast discovery. Last week PRX’s Jake Shapiro announced the formation of RadioPublic, a company backed by several large media companies, that intends to “reinvent radio” by focusing on podcast discovery, as well as special offers and fan engagement.
Companies are focusing their investments in the space and with that will come better data and increasing revenues. Another big media company, EW Scripps, bought Midroll Media, which includes both the Midroll sales network and Earwolf podcast network. Technologies are improving as well – podcast listening can be a pretty seamless experience these days with an app like Overcast.
It’s early days for the podcast industry. The marketplace is flooded with great content, and working hard to organize and monetize. No doubt that effort will benefit from the focus of the traditional media industry looking to reinvent its online strategy..
Written while listening to Anna Sale’s podcast Death Sex and Money.
Last week, the New York Times published an article about Apple’s indifference toward the podcasting marketplace’s need for more and better data. It’s a very interesting read that spawned several other articles, and lots of discussion. At issue is the fact that Apple, having basically birthed the podcasting industry back when it was primarily selling non-connected ipods and wanted downloadable content to drive those sales, holds the keys to the best data on listening, but doesn’t share that data with content providers.
There’s some debate among podcast platforms as to whether the data is important, but most of the larger companies driving revenue in the industry understand that there’s a need for uniform standards and measurement that’s verified by a credible third party measurement service. In the streaming industry that’s Triton Digital’s Webcast Metrics, which is accredited by the Media Ratings Council. Ad Agencies thrive on that data, and the amount of revenue that will flow into podcasting will be limited until it exists.
Apple’s iTunes has the largest share of listeners of any podcast platform, so getting them on board is important. However, the financial incentive for Apple to provide data is limited. They drive lots of traffic to podcast content through iTunes, and sell devices that access that inventory. They don’t make any other money from podcasts. In his recent take on the industry, Nick Quah referred to Apple as an “indifferent steward” of the podcasting industry. But, some say, Apple has a soft spot for podcasting that may spur them to help the revenue side of things grow.
I think the idea that Apple will assume a benevolent protector role toward the industry and start sharing data so others can make money is wishful thinking. If they start sharing data, it will be because they are going to monetize it, as in the App Store model where they get a piece of anything sold through their apps.
One interesting and relevant side note: a few weeks ago, Apple invited some folks from the industry to a little round table at Apple HQ. Apparently, that select group, which included a kind of quirky selection of businesses, got an audience with a group of Apple people who then met with Cue after the meeting and gave him the run down. It all happened under Apple’s typical cloak of silence, so there’s not a lot that we know beyond that. I don’t think anyone came away particularly hopeful that data will start gushing their way.
Whatever Apple does, it will be because it’s the best thing for them. And I do think they have to do something. Lately Spotify, Pandora, Audible (Amazon) and Google (Google Play) have all jumped in to the podcasting pool. This year iTunes’ share of podcast listeners is down from 70% to 65%. I’m sure that 5% drop in one year got Apple’s attention. Any or all of those other services could decide to make the water a little more enticing for podcast producers and start to grow their audience, maybe with exclusive opportunities for podcasters who align with them. The podcast industry is at this point eager to see iTunes’ dominance dissolve.
No doubt Apple is remembering their misfire on streaming music. When the company started selling iphones, Pandora jumped on the opportunity early and quickly became one of the most popular apps in the App Store. In fact, Apple actually featured the Pandora app in a television commercial for iphones early on (there’s an app for that!). Last year Apple finally launched their own streaming music service, which has a fraction of the number of subscribers that either Spotify or Pandora have. However, Apple took a really long time to launch its service, and along the way the iphone helped Spotify and Pandora get a very strong foothold in the market.
Data or not, the best thing that could happen for the longterm prospects of the podcast marketplace would be for iTunes’ share of listeners to continue to drop. It’s already happening – Apple’s dominance is dropping while the marketplace is expanding. Last year iTunes lost 5% of the listener share while the marketplace grew almost that much – according to Edison Research, weekly listening grew from 10 to 13% of the 12+ population, while monthly listening grew from 17 to 21%. Maybe that’s enough incentive for Apple to start turning over some data…
Podcasts are reinventing audio advertising by putting an emphasis on impactful and measureable ads that ignore broadcast radio’s attachment to standard length (:30/:60), prerecorded units. While radio broadcasters have been trying to minimize the negative impact that ad units have on listening for years, the relatively nascent podcast industry has come up with a formula that does that, and it’s bringing in lots of new advertisers.
Possibly because of podcast programming’s roots in public radio, the medium has dedicated itself to native advertising, largely in the form of live reads by podcast hosts. In fact, whereas the idea of having a newsperson deliver a live read is generally taboo on broadcast radio, it’s often the podcast journalist that delivers these ads – think Serial’s Sarah Koenig beginning every new show with a shoutout to sponsor MailChimp.
Podcast advertising’s live-read, native advertising approach, is integrated into the programming and less intrusive. Since they are basically endorsements by the host, they’re also more impactful. According to podcast advertising network Midroll, 63% of podcast listeners say they have purchased a product they heard advertised on a podcast. That’s good news for the advertiser who often knows exactly how effective their ad campaigns are – because they include a unique url or coupon code for each show which enables the advertiser to track results.
So why does native advertising work so well in the podcast format? By their nature, podcasts are a lean-in listening environment, consumed by folks that have gone to some effort to select the program, and download or stream it. Talk programming is by nature very foreground, rather than background. Podcasts’ approach to talk, which is often more like storytelling, on topics selected by the listener, creates an enhanced audio environment for the advertiser.
It helps if the ads are well done, and placed in suitable podcasts. Mack Weldon mens’ underwear’s native ads were so funny, and so well placed in the podcast Comedy Bang Bang that listeners started listening to hear the ads. The brand is really happy with their podcast advertising, and now assigns 25% of their ad budget to the medium.
Midroll says that 89% of their advertisers consider their ad campaigns in the past 12 months to be a success. Lots of advertisers are online businesses. Most of us are familiar with the early adopters – native podcast advertisers like Mailchimp, who broke away from the pack with their sponsorship of the enormously popular Serial in 2015, and Squarespace, which seems to be sponsoring just about every podcast I listen to these days. But the extraordinary name recognition achieved by those businesses hasn’t been lost on bigger brands like General Mills, Proctor and Gamble and Ford, all of whom are investing in the space.
The podcast space is reaping the rewards of a dedicated effort to reinvent audio advertising. Advertisers are showing their interest with continued investments and meaningful, effective and interesting ad strategies untethered from the :30 or :60 unit. It’s great to see the shift to emphasis on an approach that enhances the listeners’ experience proliferating in the podcast marketplace…
Here’s a video of the Mack Weldon ad, during a live recording of the show Comedy Bang Bang at SXSW:
Last month we learned that an estimated 98 million people have listened to a podcast in the US, and 57 million listened in the last month. According to the newly released Infinite Dial study from Edison Research, of the 13% of the 12+ population that listens weekly, more than half listen to several each week. All of those stats are gains on a year ago, and it’s a trend that is likely to continue to increase.
A new study by the journal Nature helps explain this upsurge in podcast listening. In the study, the researchers played episodes of the very popular podcast series The Moth Radio Hour for several volunteers and watched the way their brains responded. According to this article about the study, “widely dispersed sensory, emotional and memory networks were humming, across both hemispheres of the brain,” a reaction that was different than predicted.
Storytelling, it seems, causes an “internal living reality” to take over, which engages the listener, and feels good. The storytelling aspects of podcasts are indeed their appeal, according to this new data.
The article gets pretty technical, with a beautiful interactive brain viewer that supports the research and informs us that “right angular gyrus will probably respond most strongly to words that describe people or dramatic events,” while other areas of the brain respond to words that describe shape, place, and numbers.
Listening to stories makes the brain fire on all cylinders and that feels good. It’s a good explanation for the growing popularity of podcasts. Of course, The Moth Radio Hour was an excellent content choice for the study, given it’s high quality, enormous popularity, and storytelling genre. Those storytelling aspects were present in Serial’s enormously successful first season as well, and are the basis for so many of the new podcast series being released these days.
Understanding the way a listener reacts to a podcast is interesting data that can help potential advertisers both justify investments and develop campaign strategies. That makes this very useful info for revenue development as well.