Why The Future of Podcasting Looks Bright (Despite a Lack of Scale)
Podcast economics still need to be figured out, but the medium is growing rapidly.
The surge in podcast popularity is on the rise as media consumption habits continue to change. Since 2014, monthly audio podcast consumption grew from 39 to approximately 46 million monthly users, according to Edison Research.
The medium’s growth has piqued advertiser interest, generated spinoff networks, aggregation apps and podcast shows from major publishers to mom bloggers. But with such a crowded market and economics that are “still very much in flux,” Midroll’s chief content officer, Chris Bannon, says you need to have some sort of promotion strategy in mind. Because even with a great show, “it’s very hard to find ways to get people to pay attention."
While some podcasts take off meteorically, like Serial, more often than not these audiences are built over time, through consistent hosts and broadcast frequency. Networks like Panoply, The Slate Group’s spinoff podcasting arm, “hope to change that and speed up that curve, but it does take time,” says Brendan Monaghan, Panoply’s general manager. The network addresses the audience issue through solutions such as cross-promotion and utilizing partners assets, whether it’s a print publication or robust email subscriber list.
Similar to Panoply and Midroll, there are other services that hope to solve the audience issue. Deezer, a music streaming service that acquired Stitcher, the podcast aggregation app, is just starting to tread water in the space. But Deezer’s CMO, Beth Murphy, recognizes that “podcasting is still not as mainstream as people have predicted [but] I think it's grown a lot.” Through music streaming, which is a much more developed space, Murphy feels that podcasting and on-demand audio can "truly reach the mainstream consumer and eclipse terrestrial radio."
Aside from building an audience, podcast discovery hasn't yet reached the point where a significant number of consumers are opening iTunes and searching for various podcasts. "It's a little bit harder in audio to capture a listener," says Monaghan. Advancements in technology have certainly sped up the process, though. The iPhone’s podcast app, which is now native and undeletable, “was a huge step from a technology standpoint that really helps push this medium along,” Monaghan adds. While other mediums have suffered from mobile's aggressive growth, podcast discovery is benefiting.
Outside of the challenges, podcasts do have a unique value proposition and revenue opportunities that other mediums can't offer. Hosts of the shows build strong communities and several years ago, Slate decided to tap into this community with live podcasts shows. "People just want to come and see their favorite podcasters do what they do, but see it in person," Monaghan says, "in a way, that's unique to the medium." This also caught the attention of advertisers, with Acura as a sponsor.
Advertisers in the podcast space are typically either direct response or pure brand advertisers. The advantage in advertising during a podcast is that “it’s not as abrupt,” Monaghan says, because the hosts are engaging with the content in a fun and creative way, avoiding listeners tuning out for 30 seconds or so. “Advertisers love that because it lends itself to deeper engagement and from a branding perspective, that’s ideal.” In fact, according to Midroll's advertiser satisfaction survey, 100 percent of the advertisers said they would recommend podcast advertising to a colleague.
But, there's still the issue of scalability. Although the CPMs are very attractive and advertisers are very interested in reaching people who consume podcasts, "the challenge for this space has been scale, so it's hard for an advertiser to go in and make a $500,000 sale because of the audience size," Murphy says.
For those content providers or publishers who are already producing podcasts or considering it, "the hardest thing is to translate the print voice of something into a human voice," Bannon says. "A lot of print media have a pretty good idea of what they want to do, but when it comes to executing it around human beings talking or telling stories, it’s really different than the processes they have used so far to produce content. It’s something that requires practice and expertise combined." So while scalability and the economics of podcasts still sort themselves out, there's plenty of time to practice that human voice.