Podcast Ad Buyers United: What Brands Actually Think of Impression-Based Buying
As podcasting continues to mature as a medium, it’s important to hear from all sides. Most coverage of the podcast industry focuses on the publishers and the ad tech due to the funding and deals that happen publicly.
But the value of our industry and most media industries is primarily measured by the advertising dollars spent in it, and that part of the story has been widely underreported. So, we’re here to fix that.
Eric Smith of Incremental Media and Adam McNeil of ADOPTER Media have come together to assemble many of the leading brands and agencies actively advertising in podcasting today. Each quarter we’ll share our perspective on key topics that we collectively are coming across and don’t feel the coverage accurately reflects our perspectives. The members in attendance represent well over $100MM of annual spend in the podcast space, and as we grow this group, we aim for it to be representative of far more.
Now for our first topic: Impression Based vs Episodic Buying
One of the hottest topics of podcast advertising is the technological development of Dynamic Ad Insertion (DAI) and the by-product of it: Impression-based ads.
For a quick history, DAI allows publishers and podcasters to dynamically change the ad after the episode is published, allowing ad creatives to be swapped, ads to be pulled, having ads run across an entire catalog of episodes, and even demographic targeting.
Publishers have found ways to leverage this technology for the benefit of mass monetization in the form of impression-based selling. Up until DAI technology, podcasters charged flat rates or a scalable rate in accordance with the delivered impressions. Now, advertisers can buy a set number of impressions with geo-targeting capabilities similar to how brands use platforms like Meta and Google. Once the impressions are delivered, the ad is pulled and a new advertiser is inserted allowing a new brand to step in with their ad dollars in exchange.
This tech, though attractive to brands outside of the podcast industry, has alienated many of the largest spenders in podcasting today.
With that context, here’s what the group had to say about Impression Based Ads.
Survey Says: Impression Based and Episodic are not equal
The brands in attendance were surveyed on how their budgets were split between episodic (e.g. Baked in or “faked in”) and impression-based buying. All but two brands/agencies shared that their episodic budget made up over 80%-90% of their total budget, with one Direct Response (DR) focused brand sharing that they’re actively ending all impression-based campaigns and pivoting to a strictly episodic-only model.
A representative from Manscaped shared, “I think dynamic alienates a lot of DR brands that are willing to spend in the space. When the goal is to sell products, impression-based buying doesn’t sell as well as baked-in reads so it should be priced differently.”
It echoed throughout the call that there were struggles for DR brands using impression-based buying. Those finding success expressed the need for significantly lower CPMs, highly monitored frequency capping, or a regular updating of ad creatives to mimic the effect of a baked-in ad that essentially always produces a new creative each ad read.
Molly Laufer, an Independent Growth Marketing Consultant, shared, “Dynamic insertion provides specific value props for certain advertisers (those with geo-constraints, those with very narrow target demographics, those who are unable to utilize offers/promo codes or How Did You Hear About Us surveys), but in order for podcasts to continue to serve as a performance-driving channel, there are a lot of planning nuances that should be considered. Specifically, to ensure that listeners are getting the most organic, engaging, and fresh advertising reads, more could be done on the planning side to mimic “traditional” embedded reads while still taking advantage of everything that DAI does have to offer.”
Dynamic Ad Insertion does have some benefits. It has enabled advertisers to take advantage of demographic targeting, fractionally purchase impressions on large shows, and give brands ad flexibility. But, at what cost to the brand’s performance? Do all these bells and whistles lead to improved performance for the brand, or are they all there to serve the publisher’s ability to monetize every last impression? The vast majority of the group felt with the ability to monetize every impression, the incentive for many podcasts was no longer on performance but on their ability to gain more impressions.
Overwhelmingly, those in attendance shared that the parameters in which impression-based buys work for DR campaigns were tight. Many see the hurdle as large enough to just avoid it entirely.
Ultimately, DAI absolutely has its uses and the group unanimously agreed that having the option to use it is a valuable consideration. But how it’s implemented today is generally in the publisher’s best interest, and many buyers are losing the ability to buy in the ways they found successful previously, thus decreasing their investment in the industry itself.
Ideally, publishers should offer both, to not alienate their existing clients while chasing new opportunities and efficiencies. At a minimum, they should respect that most DR buyers don’t want to buy like this unless there’s a serious discount.
Ari Klaristenfeld of We Are A-OK expressed, “I’m all for DAI technology, but impression-based buying is not equal to baked-in ads and should be priced accordingly.” Sarah Marini of Athletic Greens echoed, “[Impression-based] is not the same as a baked-in ad and therefore needs to be priced and sold differently.”
Where Do We Go From Here?
DR Advertisers are looking for reliable partners that allow them to scale their brands effectively and cost-efficiently. Right now, it’s clear many advertisers are having a hard time seeing results from impression-based buying.
However, there’s optimism about the mechanics of impression-based buying. The ability to target, reach scale and set frequencies (which is still in its infancy) is beneficial; however, it requires maintenance and careful setup. Several advertisers agreed that if the pricing of impression-based buys were more similar to programmatic rates, they would be inclined to retest or invest more i.e. $5-$10 CPMs. That may not be what publishers want to hear, but it’s the reality of the performance difference between episodic and impression-based buying today.
“Coming from the publisher side of the industry to now being on the agency side, I think there’s a major lack of understanding from podcasts on what performance looks like for acquisition-focused advertisers, especially podcasts that are pushing more towards dynamic insertion. To be honest, it’s not their fault! They don’t have access to the performance data. The responsibility is on the buyers in the space to show our podcast partners how the decisions they make alter our performance.” — Eric Smith, Incremental Media
Emphasizing transparency and dissolving the gap between publishers and advertisers will inevitably lead to stronger relationships and trust in the medium of impression-based ads.
Frequency capping on full catalog buys was another major concern with several advertisers noting that impression-based buys would only work if frequency numbers were kept tight to mimic that of an episodic buy, with some advertisers suggesting a cap at 1 or 2 per user to see stronger performance.
Lastly, the advertisers finding success with impression-based buys emphasized a need for regularly updated creatives at a bare minimum of once a month. Publishers who allow for multiple creatives to be submitted or made and rotated in will have an advantage in garnering these brands’ ad dollars.
As Trent Polley of Rocket Money expressed, “Dynamic ads can work under the right circumstances. Most ad buyers just blow it off.”
If you made it this far, we hope you take away one simple thing: We love the podcast industry! We want it to continue to thrive, but the best way to help it get through the likely tough times ahead for the entire advertising world is to structure ad campaigns to help brands generate the results they need.
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We’re the Podcast Ad Buyers United, a group of acquisition-focused media buyers representing some of the largest spenders in podcast advertising. We assemble once a quarter to discuss a trend happening in podcasting, how we feel about it, and then we will be publishing an article with a more fleshed-out overview of our thoughts like the one above.
We wanted to do this because we felt like podcasts and our network partners hear a lot of this from us individually, but hearing from us cohesively will hopefully bring about meaningful change and allow us to continue spending on podcasts, a medium we love, and not have it become Radio 2.0 🙂.
If you are a client or agency buyer who spends meaningfully on podcasts and are interested in joining a future Podcast Ad Buyers United session, email Eric Smith at esmith@incrementalmedia.com or Adam McNeil at adam@adopter.media.
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