It was recently reported that Spotify purchased Anchor and Gimlet Media, which are significant players in the world of podcasting. If you’re like the majority of Americans, you’ve never heard of these two companies, and have never listened to a podcast. Why is this acquisition by the world’s largest music streaming company any different than the countless others these days? Glad you asked.
Podcasts might not be on the growth fast track we’ve seen with Facebook and the likes, but their role in marketing should be noticed. With their footprint doubling in the last 5 years to an estimated 73 million in 2018, as reported by Edison Research, the medium is gaining traction in terms of audience following and listeners. It’s estimated that 26% of adults 18+ in the U.S. have listened to a podcast in the last month. You can expect that to be magnified through the growth of smart speakers (Amazon’s Alexa, etc.) which make it incredibly easy to listen to podcasts, without a smartphone.
Is the ad revenue there? No, not yet. At an estimated ad revenue of $250 million in 2017, it’s a rounding error in comparison to that of broadcast TV, which is at $69.8 billion in 2018. With 2020 projections coming in at more than $600 million, it is growing. As the audience grows, so too will the ad dollars. It’s a natural evolution that every medium has gone through. Although some faster than others.
What makes this a great opportunity for marketers is the level of segmentation and engagement. By its nature, podcasts are created around content (travel, business, cooking, etc.). It nails the lifestyles and interests boxes perfectly (the team at Morgan & Co. loves that in any medium). And nothing aligns better with audience segmentation than content crafted around a specific topic. That alone makes it a great way to pin point audiences like no other medium. Remember, it’s about psychographics, not demographics.
Secondly, being in the infant stage of its life, podcast ads are traditionally read by the host. That delivery, standing apart from the usual voice over we’ve become accustomed to, has the ability to lend credibility to the brand. On top of that, hosts and producers are eager to work with brands, so very little is off the table in terms of message delivery.
No doubt it’s a growing area in the ad world. Consumers are adopting the medium at a steady pace, per the numbers above. Brands are even taking notice, warming up to the medium, and carving out precious dollars from their ad budgets. These two things alone should make it no surprise that Spotify, and others, are shelling out big dollars to snatch up podcast publishers. Their actions speak loudly, and they see the value and opportunity that exists within the podcast world.
So, do I listen too? Yes. Because life is hectic for me, I consume media in a less than traditional way, which to me podcasts fall into. I have an Alexa, which is great for podcast listening. But I also consume the old fashion way – via my iPhone. I work out roughly 5 days a week, which is a great time for podcasts. Plus, I listen while traveling and driving.
In case you’re wondering, I’m a fan of Kai Ryssdal and Molly Wood, so I gravitate towards podcasts from NPR, which happens to be the largest podcast publisher. My favorites include Marketplace, Make Me Smart, Corner Office and Marketplace Tech. How I Built This by Guy Raz is a great first hand perspective and interview from the people who built the big names of today. A while ago I got hooked on Presidential. Hosted by Lillian Cunningham of the Washington Post, each podcast is a 45 minute glimpse into each of the Presidents of the U.S. I’m a fan of Tulane University Professor Peter Ricchiuti, so I follow his Out To Lunch. As a member of EO (Entrepreneurs’ Organization), I tune into Wonder, a podcast wrapped around conversations with women entrepreneurs. Finally, as an ad guy, I like Ad Age’s Ad Lib.