As a growth advisor to over 70 startups at Madrona Venture Group, I’m involved in discussions like this all the time:
“Facebook and Google are too expensive and it’s doing horrible things to my CAC — what other channels are working for people?”
In many cases, I bring up podcasts as I have seen them be successful with many types of companies.
Podcasts are one of the few channels I’ve seen that can satisfy both brand and performance marketers. Despite all of this, many companies have not yet tested podcasts and Madrona hosted an event last week for startup marketers to try and change that.
Podcasts are a way to reach the ‘unreachables’
Anna Sullivan from Gimlet Media was one of our speakers and referred to podcasts as a way for marketers to reach the ‘unreachables.’ By this she meant the most valuable consumers who have shifted their media habits to ad-free zones like Netflix and Amazon Prime Video. Not only are podcast listeners unreachable while watching shows like ‘Stranger Things’ and ‘Transparent,’ but they are also more likely to use ad blockers when on the web. Podcasts are one place they can be reached and with an ad format that can be extremely effective.
Steve Shanks, our other presenter from Ad Results Media, noted that podcast listeners are ‘leaning in’ and actively listening to the content much more so than with a channel like YouTube so it’s more likely they are paying attention throughout. With endorsed spots that can be over a minute and CPMs in the range of Facebook newsfeed ads, it’s no surprise that the channel can deliver a strong ROI.
Need an authentic connection with host and a clear value proposition to succeed
Podcasts may not work for everyone — to succeed you need a product that hosts can speak authentically about. Steve shared an example of a product targeted at teenage girls that had trouble finding endorsers who could speak authentically to that audience. Much more successful is an example like Indochino from our portfolio. Many of the male hosts of popular podcasts wear suits and other dress apparel so speaking about Indochino seems natural. In one instance with the popular ‘Pod Save America,’ a host even wore Indochino to his own wedding and told his audience about the end-to-end experience. That spot has done well because of that personal story, but also because it is followed by a clear articulation of the brand’s value proposition and competitive differentiation. Steve has seen many campaigns underperform without a crisp and clear value proposition and recommends spending time on this prior to getting started with podcast sponsorships.
It’s important to have infrastructure in place to hit ROI goals
Most of the traffic coming from podcasts will be routed through paid and organic search, so it’s important that you can convert that channel before adding podcasts. You will also want to be able to attribute podcasts and Steve recommends a mix of promotional codes unique to a show as well as a ‘how did you hear about us’ survey as part of registration or check-out. Not having a survey means you are likely under-attributing podcast sales as many people do not end up using promotion codes and even fewer navigate using vanity urls. Having both codes and surveys in places makes it so you can test different offers, frequencies, and shows and optimize towards the highest performers just as you would with Facebook and Google. This approach seems to be working for Steve’s clients as they are expected to increase their spend on podcasts 4x over a 2-year period — can you say that for very many of your channels?
Creating your own podcasts
Though Gimlet is known for creating original podcasts like Serial and Startup, Anna’s group also has worked with brands like Tinder and Blue Apron to create their own branded podcasts. This strategy could work if you have awareness goals or have a desire to change audience perception. A common approach Anna shared is to use data from your product to speak about a topic as Tinder has done with their DTR podcast produced by Gimlet. Brands who have worked with Gimlet so far tend to have larger budgets, but Anna mentioned a few resources like transom and AIR that can help companies with more limited resources explore producing their own podcasts.
No matter the style of podcast you create, it’s also important to make sure you have a thorough distribution plan in place before getting too far as the podcast space can be very crowded. Active podcast listeners dedicate on average 6 hours per week to the medium across 6 shows, so you’ll need to get the word out and provide a compelling reason for them to add your show to their routines.
Both speakers were optimistic that podcasts would continue to grow and provide opportunities for marketers with many different goals well into the future. More data, new user experiences, and integration into ‘smart speakers’ were just a few of the trends they are keeping their eyes on. If you want to get ahead of these, there is no time like the present to explore how podcasts could be relevant to your business and there are few people with the expertise like our speakers to help you do that.