In Defense of the Dynamic Podcast Ad

I was at Podcast Movement in Chicago last week. This celebration of the podcast medium is in its third year, and with more than 1,500 attendees crowding Chicago’s enormous Hyatt Regency, has obviously hit a critical mass.

It was an interesting event. The bigger podcasters and networks like NPR, Midroll, Panoply and PodcastOne were all there. But so were legions of up-and-coming podcasters, podcast networks and a surprising array of vendors.

It’s a good sign. After a few years of navel-gazing and debating even the very word “podcasting,” it feels like the much-fabled “podcasting moment” is actually here.

One topic that rang some bells was dynamic insertion of podcast ads. Lex Friedman of Midroll gave an inspiring talk on the basics of podcast monetization, charting the evolution of podcast advertising in Dawn-of-Man style. He suggested new dynamic podcast ad insertion technology could disrupt the steady progress toward the perfect host-read midroll spot, and clutter podcasts with crass radio ads at bargain-basement CPMs.

While there’s no question that host-read endorsements in podcasts are very effective marketing — just as they have been on the radio for a long time — what’s not quite correct is that dynamic podcast ad insertion is new. Or, as Lex put it, a “race to the bottom” in terms of CPM and ad quality.

NPR has been producing podcasts for a decade and produces some of the top podcasts in the world by audience size and downloads. Every pre-roll sponsorship to every NPR podcast downloaded in the last eight or nine years has been dynamically inserted. Many, many billions of them. WNYC in New York also dynamically inserts both pre-roll and mid-roll sponsorships and has for some time, with exceptional quality.

Heavyweights Triton Digital, AdsWizz and WideOrbit have offered podcast-specific ad servers for awhile. (Disclosures: The company I work for, National Public Media, just partnered with AdsWizz to sell the PodWave network — the first true podcast ad exchange, powered by dynamic insertion. And NPR uses Triton Digital to serve dynamic pre-roll sponsorships.)

Platforms like Acast are adopting the method, and development shops like PRX are building podcast-specific ad servers. Serial used dynamic ad insertion for season two, without any ill-effect on audience growth as evidenced by the many millions of people who listened.

Dynamic podcast ad insertion isn’t new, and there’s no evidence its regular use has started a race to the bottom.

In terms of quality, the deciding factor is the sound. Podcast listeners like the medium because it’s not cluttered by too many or bad-sounding ads. And that’s why it works. NPR’s research shows that 58 percent of our podcast listeners prefer to do business with companies that sponsor NPR, and 73 percent have a more positive opinion of a company when they learn it supports NPR. And that’s with nine years of dynamic insertion.

It’s just as easy to dynamically insert a well-crafted, great-sounding spot into a podcast as it is to insert a bad one. And the same holds true for scripted host-reads and baked-in spots.

Technology is just a tool. Smart publishers and sellers in this space will always ensure the podcast ads fit the medium and sound great. No one wants to lose the magic.

Further, dynamic ad insertion is a requirement for the industry to scale beyond a few dozen large podcasts with big direct sales teams. Or boutique podcast sales networks that don’t distribute many of the shows they represent and can only produce host-reads.

It’s a necessary, modernizing step that allows for scale, efficiency, consistency and more specific targeting across single shows or buckets of hundreds. Brand marketers like those things.

Don’t get me wrong. In addition to dynamic pre-rolls, NPR still “bakes in” midroll sponsorships and has several large entertainment podcasts that use host-read sponsorships. I like well-done host-reads as both an avid podcast listener and someone who sells a whole lot of podcast sponsorships to hundreds of brands.

Producing spots into shows allows for more fine control over the sound — background music can carry under the spots, for example. And frankly it’s easy for producers.

But as the medium continues to see explosive growth in both audience and content selections, dynamic ad insertion is a key way to bring in new, brand-centric advertisers and new revenue models. And always with the right tone, as smart podcast sellers have already been doing for years.

As colleague Sarah van Mosel of Acast puts it, “Dynamic ad insertion is one end of the evolving podcast ad spectrum, with branded content on the other extreme and baked-in ads in the middle. As a marketer, I’d rather have more options, than less.”

Spot on.

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