Doing the Business in Podcasting: 8 Ideas for the Future of Monetisation
Updated: Jan 20, 2020
Last month I was back at the RAIN European conference in Central London to talk all things pod. Presentations from our colleagues across Europe and further afield joined the likes of Dax, Targetspot and Acast to shoot the breeze on current and emerging platforms and the tech surrounding it all.
I found myself on a podcast advertising panel between Chris Wistow of Acast and Sean Carr of Art19, and moderated by my good friend Neil Cowling of (APA Production Company of the Year!) Fresh Air Production.
Given that Podcast Pioneers is very much focussed on audio-first digital campaigns and content creation, this was a great opportunity to chat with advertising colleagues about the broader environment of monetisation in the medium.
I always enjoy conferences for the conversations they provoke. New ideas and opportunities often seem to pop up in the cracks between existing ones, with the indulgence of a whole or half day to ponder the industry. With that in mind, I think it’s always worth taking a beat to slow down and contemplate where we’re heading, so here are 8 questions that popped into my head on the day:
1. Pillars of a Growing Medium
As the years pass and the conversations become increasingly sophisticated, it might be easy to forget that podcasting is still a nascent industry.
That means it’s also diverse, agile and volatile and furthermore it is evolving quickly with respect to:
Strategic integration in the digital ecosystem to add value.
Sophistication of ad and monetisation models
One of the panel questions asked how much more growth we looked set to see in the podcast-listening market. Our resounding answers were: lots! Beyond our metropolitan media bubble, there are still plenty of British people just noticing that they can access free and useful content from their phone. Taking this for granted could be a missed opportunity for advertisers and content creators alike.
With regards to strategic integration for brands, and the monetisation models available to clients and those wishing to make business in this sector, my perspective is that there is much more to be done in building audio into wider digital content strategies.The nature of the industry now is that we might miss more nuanced opportunities if we are too eager to set the blueprint for business going forward, to get beyond the important disruptive stage.
Ultimately the innovation we see in the four areas noted above risk being hindered by a lack of education amongst auxiliary sellers. The podcaster may very well understand what they would like to do, but what about all the intermediaries between them and the client, or vice versa?! Agencies are keen to understand and sell this content, so let’s make sure we do this in the right ways, avoiding mis-sold content, missed opportunities and commercial failures.
There are also learning opportunities in the other direction, as funding models continue to demand the content creator is also commercially savvy.
Key to the evolution of the industry of course, is the qual
Onto technology. Tech is never an obstacle in my opinion. If it’s a problem, then it’s because someone hasn’t yet figured out the solution yet. Let demand rise, and some clever so and so will do so. And if they don’t do that independently, you can bet some other clever so and so is prepared to pay them for it!
Innovation in the podcast audio space is ulitmately catering to lifestyle trends and behaviours, and therefore innovations here will surely be transferrable other types of media, especially broadcast. I don’t think podcasts will ever replace radio, but as audiences become increasingly accustomed to curating their own content channels and dedicating greater personal engagement, long-form is on the up (alas too late for my career in radio imaging!). Another example could be in the problem-solving taking place around RSS or targeted advertising and data compliance. Discoveries made here have the potential to make waves across many different mediums, and so investment by big media companies may well still be prudent!
2. Shape of the industry
Here’s something that got me thinking. Who ARE the customers in the podcast market?
This is far from a simple transaction between client and listener. Yes, those dynamically-served ad models exist and clearly do the business for plenty, but there are many more people buying and selling in the on-demand audio environment.
In the UK we have individual creators and providers, small indies and networks, established indies and networks, broadcast houses and media agencies as well as direct brands all creating content. Even the amateur home market, still very large, and arguably the lifeblood of this medium, expects to see some options for monetising their content now. And why not if they are working hard to grow an engaged and steady listenership with compelling content?
The exciting thing is, that they’re not necessarily all going after the same customers.
The advent of self-publishing and marketing in the audio world has truly shaken up traditional transactional models, and perhaps event challenges what we define as advertising.
3. Defining terms in advertising
Another question I keep returning to is whether out would be helpful to develop a podcast-specific language for what we’re selling?
The inconsistency in terms such as ‘sponsorship’, ‘host-read’ and ‘advert’ seems to be resulting a predictable inconsistency in pricing, product and value delivered. If clients used to working with agencies to buy their broadcast radio audio products expect a sponsorship to include some sort of ownership and content integration with the programme, and a prime front of break position before ads over other partners and advertisers, the risk is that they will be surprised to find the podcast equivalent doesn’t quite match up. Or perhaps, it might on one platform, but not on another.
Crucial is the definition that just because it’s audio, it isn’t the same proposition as radio. It’s taken long enough to have the engagement and integration conversation with audio-buyers around this, and establish the respective and complementary values of broadcast and podcast. Perhaps it’s also worth not taking this definition for granted just yet though. After all we are using similar terms for very different products, and the value of podcast spending is very different to radio. Isn’t it time we gave it its own language?
Let’s face it, it’s the sheer flexibility of the medium that is partly responsible for this confusion. There is so much choice in what a client can buy depending on what they’re prepared to pay for. Is it the case that agencies are really creating a bespoke option every time, for almost every budget?
4. Advertising versus marketing?
Definitions first. Who reads an ad? Is it a voiceover? Is there any kind of guidance on how ‘pushy’ it is? Is the presenter given a verbatim script for a host-read ad? How much can they put in their own words? How do partners and sponsors differ?
As I have waxed on about before in other blog posts, high-value product integrations (that allow the programme or presenter to deliver an endorsement in their own style) create awareness, trust and emotion. So when this sort of thing is sold under the blanket of advertising, perhaps with a call to action, things start to get a little blurry.
When it comes to pull vs push, there’s otherwise great value to be had in softly positioning your product in the marketplace in the creation of branded content or indeed in integrated content, for example a sponsorship of your target audience’s favourite show, maybe even placement of offer codes to sample the hunger in certain verticals. All of this seems to get packaged up with the advertising part, where pushing sales takes the front seat.
I wonder if the blurriness between these nuanced elements of paid-for activity in podcast content could be creating blurriness in the value proposition. Perhaps it’s time for a new conversation around how products are valued across platforms, and indeed how we can begin to add value by integrating tracking through other digital channels. I’m sure this is a model clients will benefit from buying, and audio producers will benefit from providing!
5. A premium CPM, but a fragile chain of engagement
How many steps are there between the brief and the listener?
A presenter-read may well be the holy grail of podcast advertising, but what tangible value does this really have, when the listener is quite aware the script rammed into their otherwise sincere host’s hand?
What producer doesn’t live in fear of the selly, over-scripted presenter read? If this is what advertising has come to, I think we need to ask if we are delivering the goods! We know there’s nothing emotional about a celeb or talent reading an off-the-shelf script. It’s just factual information, take it or leave it, and the listener knows that too. Conversely we all see the value of letting presenters be presenters and giving them the freedom to use their own words.
Easier said that done though, if the presenter who needs to buy-in to a product is several steps away from the client. Like a game of Chinese Whispers, some things are inevitably lost.
The chain of commercial engagement can go all the way from client through seller, agency, producer and presenter, so how are we to overcome disengagement at the talent end? Well for starters, I think it’s jolly good when a crate of craft beer arrives at the studio (not that I've ever had a look-in, mind).
6. Education of internal agencies
I’ve already alluded to a two-way education between agencies and creators, but as broadcasters develop their own digital audio houses, and creative agencies hire audio producers, who is set to create the most successful campaigns?
Coming at it from a pure audio perspective might mean you miss the opportunities of selling wider digital integration.
And on the other hand, agencies used to serving-up platters of mixed media may not have the depth of understanding in how and when to integrate audio in this mix. I mean, is it standard to throw podcasts into the brand response now, just because it’s trendy?
As a programme-maker, all this fascinates me more than it should. I’m excited to see that for the most part, clients are being encouraged to think about audio strategically, and I look forward to seeing how different methodologies emerge for harnessing this engagement in the right places.
I suspect the winners will not only be those who offer the best quality programming, but those who build audience funnels within their platforms and integrate digital arms to retain and add value to existing customers.
7. Models of monetisation
Also exciting at the business end is how platforms, Indies, boutique agencies and producers are all managing to earn a crust. Aside from the ad and hosting platforms, or paywall models, there are all sorts of approaches to monetisation in the medium. Just for fun, let’s look at a couple of models, because it quickly becomes apparent that there isn’t just one way of running a podcast business.
Media Houses: Build it and they will come. Take the radio networks or newspaper organisations who already have a decent reach or chunky, engaged audiences: The podcast becomes an engagement appointment to drill into specific verticals of those audiences. Effectively, by marketing across existing media, their podcast becomes a “reservoir of engagement” filtering their high-value customers for a strong and complimentary commercial proposition when built into the mix of their other products.The value here is that media can engage with fewer customers but more deeply and with more trust, even make them feel certain things about the brands, maybe even convert them to subscribers. So that’s worthwhile for the business itself. And of course you can also do ad-funded content for a commercial revenue and market it across your media platforms, using those insights.
Indies: hanging it on the big talent. They are going for reach but not naiively, selecting the right names to chime with broad audiences in a big way. Add to this some decent marketing, and you start to have something that complements your more traditional income streams and builds or retains credibility with such commissioners.
Boutique agencies. Well, Fresh Air and Podcast Pioneers both started with a production house approach and then expanded to include other value in campaigns, such as marketing solutions in the case of Fresh Air, or digital creative in the case of Podcast Pioneers. This obviously also adds scalability to the business too.
And let’s not forget the freelance producers making shows for dollar (and hopefully getting a decent day rate) or home creators making shows for the love of it and hoping for a sleeper hit.
There’s clearly more than one way of doing the business in podcasting!
8. Transcription and Automation
A final ponder on what this means for advertising.
I’m not an SEO whizz or a web developer, but it strikes me that turning millions of hours of speech into the spoken word will either break the internet or drive some amazing developments in the way we use it… and the way we spend our money.
How will web search algorithms adapt to auto-transcription in show notes and podcast web pages? And how will this impact the 1% of UK podcast listening that happens on home voice devices? Will Alexa and friends be crucial in the adoption of on-demand audio programmes after all? And at what cost? Caution around trust, privacy, compliance and data regulation continues to be a feature in the way we choose to do business in the digital space, but provided advertising shows the same respect for the customer as content creation, surely the future is bright for audio integration.
There now, I promised this blog would be shorter than the last. Hope it sparked some useful ideas for your area of the podcast business!