While podcasts are nothing new, over the past couple years their popularity has been skyrocketing. All indicators point towards significant growth in the near future as more and more advertisers jump on the opportunity. However, brands should ask, is it the right move? There are many advantages and pitfalls for advertisers when it comes to dealing with this popular medium.
Numbers show a lot of potential for brands trying to reach their audience. In 2016, an average of 57 million Americans (21% percent) listened to podcasts monthly. The sheer volume coupled with the high interest targeting that comes with picking the podcast hints at some appealing performance. As technology improves, marketers are even able to install dynamic ads into these programs, based on things such as geographical location. Most importantly, a recent study by NPR revealed that 75% of podcast listeners take an action on sponsored messages. This offers huge potential, not matched with many other touch points.
But are advertisers really getting their money’s worth? Reporting metrics are still flawed. Often advertisers can only see how many users downloaded the podcast, with little certainly on whether the ad was actually heard. This problem is exacerbated by the addition of 15-second skip buttons on many app platforms, a feature designed specifically for skipping ads. If the NPR results are accurate and sustainable these challenges are likely justifiable. As advertisers, we certainly like to increase our impressions, but the bottom line is king. Attaining measured conversions trumps most else.
Furthermore, some podcast creators are moving to paid subscription services. My personal favorite podcast made the switch last week. I now must decide if a monthly fee is worth my investment, or if I should find other “free” programs. It will be interesting to see if more content creators go the subscription route in the future, reducing the inventory of quality podcasts to advertise on. On one hand, subscription content services, a la Netflix, are increasingly common these day. But consumers will likely eventually reach a limit on how many services they can pay for and may be willing to sit through (or manually skip) ads for the sake of free content. Time will tell how the podcast industry will ultimately result, but for now business is booming.