The Definition and Redefinition of Audio Advertising
Earlier this week I had the pleasure of having Bryan Barletta of Sounds Profitable on my podcast. Sounds Profitable is a newsletter and podcast that discusses the business of podcasting and Bryan has emerged as an expert on the topic. The conversation focused on the “what and how” for marketers that are considering placing media in podcasts (you can listen to the episode below) but it sparked another thought in mind: how should marketers define channels like Spotify, iHeart, and Pandora anyway?
Of course, Spotify and Pandora started as streaming music providers and they have aggressively incorporated podcasts as part of the content mix in their apps. Today, iHeart is a combination of broadcast radio, streaming music, and podcasts and I think they’ve done an amazing job of making those different assets live coherently on one platform.
In our conversation, Bryan mentioned that $25 CPMs is the benchmark pricing for buying host-read podcast ads and that the currency to transact is downloads. Bryan advocated that first time podcast buyers should consider going to podcast networks to place media because they can find a more curated approach to content that best aligns with their brand.
A podcast network can drive premium CPMs because they are competing against a very well defined marketplace (e.g. other networks) and everyone shares downloads as the metric. But the trend line in podcasting is that the major distribution points (Spotify, Pandora, iHeart, etc) are loading up on a combination of exclusive content and adtech and they can now marry that with first party data (e.g. Spotify buys Anchor, Megaphone, and negotiates an exclusive with Joe Rogan).
Okay, so back to my question: how should marketers define Spotify, Pandora, and iHeart: In my opinion, these are audio providers. They aren’t music streaming services or podcasting apps and this matters because consumers aren’t just fans of music or podcast listeners. We’re both. And often, we toggle between spoken word content and music over the course of our daily listening patterns.
An ad buyer can now go to these distribution points — and with precision — buy their favorite podcasts and blend that with streaming music (which have CPMs in the $5-$12 range). My prediction: bigger budgets and lower overall CPMs. It will be fascinating to see how podcasts and music continue to coexist and the ad products that Spotify, Pandora, iHeart, and Amazon continue to roll out in the future.
Please don’t hesitate to reach out and book a time here if you would like to talk through marketing and advertising in the audio industry.
