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.
Mary Meeker updated her yearly Internet Trends report at the ReCode conference yesterday. Meeker’s a venture capitalist at Kleiner Perkins Caufield & Byers, and she’s an expert at seeing the next big thing. In 2011 she predicted that online audio was the ‘next big thing.’
Her presentation was some 180 slides long, full of meaty charts and graphs. I recommend a look at the full deck, which you can find here. The thing could be the basis of a college course, no maybe an entire degree, it’s so chock full of past trends, current data and future predictions.
My favorite slide is some personal wisdom she passed on in closing, about effective decision making. The best decisions, she says, are often made by diverse groups of people. “Saying or hearing these words is magic: ‘That’s really interesting. I had never thought of it that way before. Thank you.'”
Meeker is talking all about mobile again this year, focused on the significant penetration of smartphones, and the growth of mobile video, which is also known as ‘vertical video’ because of the way people hold their phones. Vertical viewing is 29% of video versus 5% five years ago. In case you were scratching your head about Spotify’s jump to incorporate video, announced this week, it’s trends like this that are the impetus.
Millenials continue to drive mobile usage – 87% say their phone never leaves their side, and 60% think it’s all going to happen on devices within five years. Meeker’s next big thing this year is buy buttons, which she says are coming soon and seamlessly to wherever you spend your time online.
I’m thinking hard about online audio as enhanced mobile platforms rather than a standalone media these days. Factoring in vertical screens and buy buttons to that equation seems like a significant value proposition to both consumers and advertisers. I had never thought of that before..
Latest research released by Juniper Research projects that annual global advertising spend on mobile devices is expected to reach $105 billion by 2019, up from an estimated $51 billion this year. Advertisers, drawn to the personalized and timely targetability that advertising on mobile devices offers, will drive spending on those devices to 44 per cent of total digital ad spend by 2019.
As a mobile medium, streaming audio should be poised and ready to take its share of that spend. Maybe, just maybe it’s time for the streaming audio industry to reinvent itself as mobile advertising enhanced with audio.
In February of this year Webcast Metrics said that 73% of listening to streaming audio platforms measured by the service is done on mobile devices. Up from 66% a few months before, and still climbing. With three-quarters of its audience on mobile devices, streaming audio certainly is a mobile platform.
Streaming audio advertising is at its best on mobile devices. Compared to mobile ads restricted to visual displays, streaming audio is a perfect medium, overcoming viewability issues with the addition of an audio element. New technologies enable geo-targeting, and audio interactivity that enables listeners to respond easily. What’s more, listening to music is a favorite smartphone activity, making it an enhanced branding environment for brand messaging.
There are good reasons for streaming audio services to position themselves to the advertising community as a superior mobile advertising platform. The demand for mobile inventory is great, and mobile audio ad units are appealing and effective. Mobile budgets are in place and growing. It’s a strategic shift that’s worth considering..
In the UK last year, advertising revenue on commercial radio grew 7.2% in 2014, while in the US it shrank 1%. According to an article I read by Lucy Barrett at UK’s RAB, radio in that country is alive and well and thriving across all it’s platforms:
In a new era of audio commercial radio is complemented not threatened by the rise of on-demand services and the RAB is more determined than ever to drive consideration for audio as a long-term brand building tool so growth should continue this year…
At RAIN Summit Europe in London last fall, RAB UK’s Michael Tull presented the results of a study called Radio Now. It’s a comprehensive, inclusive study of how listeners consume audio that finds that live radio and on-demand audio play complementary roles.
The study, which is well worth the time spent to read it, also find that when all other things are equal, a brand’s market share follows its share of voice. What’s more, campaigns which include radio have a much higher financial return than those which don’t.
Radio is growing its market share across the pond, not by building silos but by taking the broad view of audio. About a year ago, Global Radio, the market’s biggest broadcast company, launched DAX, Digital Audio Exchange, the country’s first programmatic audio exchange, giving media buyers access to competitive broadcast and online brands like Bauer Media’s Absolute Radio Network as well as Spotify and other online platforms.
Led by the RAB, commercial radio is thriving in the UK. Maybe that’s why Apple hired Zane Lowe…
Music consumption by streaming is growing fast in the UK, according to a report released last week by the British Phonographic Industry. Listeners in the UK have streamed 1.2 billion tracks this year, and that’s a nearly 100% increase over the 5.4 billion tracks streamed last year, according to BPI.
Musicians in the UK are contributing heavily to the growth — the report also notes that according to data provided by Spotify, UK artists represent 19% of all tracks streamed globally on the popular streaming service. Most popular UK artists are Coldplay, One Direction, Florence + the Machine, Arctic Monkeys, Royal Blood, Lily Allen, and Mumford & Sons. Earlier this year,Ed Sheeran made Spotify history scoring the biggest ever ‘week one’ of album streams in Spotify history, with 23,792,476 streams.
Spotify has also recently announced a profit of £2.5 million for last year, from an £11 million loss the year before. A spokeswoman for Spotify UK said: “The growth seen by Spotify Ltd mirrors the growth of digital recorded music revenues in the UK in 2013, which saw digital revenues account for 50% of total UK record industry trade revenues for the first time, and a 41% increase in streaming revenues on the previous year.”
The rapidly increasing popularity of streaming music services will be the topic of the day at the upcoming RAIN Summit Europe in London on Tuesday November 4th. Hosted by RAIN: Radio and Internet News, RAIN Summits are the premiere educational and networking events for the online audio industry. They are held several times each year in the US and annually in Europe. This is the first RAIN Summit event to take place in London, and it is being held in association with the IAB UK.
The event will feature presentations and panel discussions on all facets of the online audio industry. Featured speakers include Spotify’s Chief Economist Will Page and IAB UK CEO Guy Phillipson. Advertising execs from Havas, OMD, Zenith Optimedia and other agencies will discuss case studies and insights on digital audio’s value proposition for advertisers. A pan European group of industry leaders including representatives from radio groups such as SBS Radioplay, Lagardere, Global Radio and Karnaval will discuss technology and business best practices.
To view the complete agenda and register click here. We hope to see you there!
In case you’ve been living in a cave and have missed it, it’s Advertising Week in New York this week. Yesterday I attended a panel, sponsored by XAPP Media, that featured a discussion of online audio ad campaigns. XAPP Media is a technology company that enables interactive audio ads, and the panel began with CEO Pat Higbie showing the audience how it works.
XAPP’s product is designed to enable today’s ultramobile consumers to respond to audio ads while they are listening to their devices in hands-free, eyes-free mode. These audio consumers are busy – driving, walking, exercising, etc, – and audio ads are a great way to reach them, but getting them to respond to the ads can be a challenge. Enter XAPP technology that makes it possible for them to respond with a voice command. The ad plays, and the consumer can immediately respond by saying “Call now” or “Email me.”
NPR’s Bryan Moffett, VP, Digital Strategy and Ad Ops, spoke enthusiastically about their experience with XAPP’s technology. “It’s the most exciting thing we’ve put in front of marketers since the ipad,” he said. Moffett went on to discuss several campaigns that have used the platform with success, as well as ways that they are using the voice driven interactive feature within content, enabling listeners to launch a new program.
Spotify is doing some initial beta testing of XAPP as well, and VP Brian Benedik mentioned interesting results, without getting very specific with details. Spotify’s mobile listening has increased sharply in the ten months since they stripped the subscription required feature from their mobile app, with half of Spotify’s listening now on mobile devices in the US. Meanwhile, in Latin America Spotify’s mobile audience is 80% of all listening, according to Benedik.
All of the panelists talked about the push to offer innovative opportunities to advertisers. Ad Large Founder Cathy Csukas said there is a thriving marketplace of audio advertisers and they are looking for ways to do digital. She mentioned the importance of lifting advertisers up through programs to generate recall and response.
It was great to see an online audio conversation, talking extensively about execution of campaigns, take the stage during Advertising Week. While it would have been great to have a few more specifics on advertisers and results, the conversation was informative and the explanation of the XAPP platform was very good. A few questions from the audience indicated there were advertisers in the room who found it interesting as well. All good things..
Recent info from Edison Research’s Share of Ear study puts listening to Internet radio/Music in the US, among persons 12+ at 11.6% of overall listening to all legitimate sources of audio. By way of an explanation of legitimate sources, it was interesting to hear Edison’s Larry Rosin explain, during his presentation of new pieces of this survey at RAIN Summit Indy, that when a person surveyed said they were listening to birds in their backyard, that was not counted as a source of audio. Tweets aside, listening to AM/FM broadcasts came in at 52.1% – probably a smaller share than some would expect. Satellite radio listening came in at 7.7% – a remarkably big number considering there’s one company behind all that audio content distribution.
It’s great to have this new information bookmarked so that we can watch things evolve from year to year. I’m assuming Edison plans to continue this study.
It’s also very interesting to view this data through a global lens and wonder what is going on in other parts of the world. Right around the same time we were discussing this study at RAIN Summit Indy, similar information was being presented at the Nextrad.io conference hosted by RAIN Friends James Cridland and Matt Deegan.
Jonathan Arendt, CEO of Jazz FM in the UK, and Managing Director of research firm Hallett Arendt, presented data from a new study of UK Share of Ear called Audiomonitor. In it, we learn that listening to online audio among persons 15+ in the UK is 23%, listening to music streaming is 10%, and listening to broadcast radio is 74%. The studies categorize things differently, which no doubt accounts for some of the discrepancy, but it’s also interesting to note that broadcast radio listening has a significantly higher share of ear in the UK. There’s plenty to discuss in this revelation, including the strong part that BBC plays in broadcast radio in the UK, and the more enthusiastic and organized approach to digital broadcast there.
But what’s also interesting to note is that while broadcast radio is holding stronger share of ear in the UK, streaming music and listening to online audio are thriving as well – almost as well as here in the US.
We’ll be examining the online audio marketplace in the UK and across Europe in November at RAIN Summit Europe which will take place in London on November 4th. The speaker list for this event is fantastic – featuring Will Page, Director of Economics for Spotify, as well as Guy Phillipson, CEO of the IAB UK, and many more smart folks involved in streaming audio in Europe. It’s our third annual RAIN Summit Europe, and our first in the UK, and we’re really looking forward to it. The largest meetup of its kind all year, it’s an event you won’t want to miss. So join us! You can view our speaker list and panel topics here and register here. (Use the code Audio4cast to save a bit too). See you in London in November!