Podcasts in focus: the COVID uplift, programmatic ads, branded content, and who is actually making money?

The number of new podcasts hitting the airwaves in 2021 has hit new levels. And while the audience numbers for podcasts continues to rise, does this increased investment reflect growing advertiser interest and spend?

In this extended feature for Mumbrella, former reporter and podcast producer Zanda Wilson dives into the state of play for podcast buying and selling in Australia.

Early in 2021, I noticed the already-breakneck speed with which new podcast announcements hit my inbox had picked up even greater momentum. In my four years covering radio and podcasting, there had always been a steady stream of announcements on new podcasts, but it was as if a switch had been flicked.

The majority of these new podcasts have come from the big radio/audio networks, particularly Southern Cross Austereo (SCA), Australian Radio Network (ARN) and Nova Entertainment, but independent and podcast-specialist publishers like Acast and Podshape have also grown their content slates significantly over the past year.

Nine Radio, has continued to grown its content offering when it comes to podcasts, but at a seemingly more measured speed.

Naturally, I became curious as to whether this content investment is actually reflective of an increase in ad dollars flowing into the sector, or whether podcasting is still in a ‘build it and they will come’ phase that seems to have been going on forever.

Podcast titles have exploded in volume in 2021

The other obvious question is whether publishers or podcasters themselves are actually making meaningful amounts of money from the average podcast, or, as I suspect, is it a case of building significant scale and selling advertising across an entire audio slate.

I put these questions to Nine head of digital audio Hayley Bourne, Schwartz Media CEO Rebecca Costello, Acast Australia managing director Henrik Isaksson, ARN/iHeartRadio head of digital audio Corey Layton, Nova Entertainment digital commercial director Kane Reiken, SCA general manager digital audio Grant Tothill and  Podshape founder and ‘head shaper’ Jay Walkerden.

It appears there is general consensus that while podcasting, in terms of volume and scale of titles, has already been on a growth trajectory, that COVID has absolutely played its part in the latest rush. Additionally, while advertiser interest is catching up, it’s not yet matching the scale of content growth.

“COVID was a really critical time for podcasting in a positive way for the industry,” Reiken says, while Tothill holds no bars when he remarks “COVID is a podcaster’s best friend”.

Costello believes that COVID has been more of a “happy coincidence” for podcast listening, while Walkerden says the podcast update during lockdowns is “tremendous”.

“It was only a matter of time until Australia caught up to the US and UK in their consumption demand,” Bourne adds. “The pandemic played a significant part in escalating that, hence the pace in podcast shows being launched to try match that demand.”

Built it and they will come

So if we agree there is money to be made in podcasting, the next question becomes how much? Also, is it fair to assume publishers are trying to scale content offerings, in the hope that advertiser interest and spend will come later?

Or, is the boom in titles actually reflective of a similar level of growth in interest among buyers and media agencies?

ARN’s Layton says that while “there’s absolutely [been] an increase in advertisers into the podcast space, advertising is lagging behind consumer demand. The two aren’t aligned yet, but everything is pointing in the right direction,” he adds.

Acast’s Isaksson says that his podcast-specialist network is seeing “very high fill rates across the board”, but predicts that the number of new shows being announced will plateau because we still need to see “podcasting getting a higher share of revenue spent around audio”.

Acast Australia managing director Henrik Isaksson

Walkerden, who started his own independent company Podshape in 2020, says he’s not surprised to see the investment, because “sales will always follow content. I would say that is true for any medium… the content has to be there otherwise there’s nothing to buy.

“It’s not a chicken or egg piece If you’ve got really strong content, and know the trajectory of the audience, where that audience is playing, you can try and get a share of the revenue that is around right then.”

A common theme, particularly and unsurprisingly from the big companies, is that advertisers should be buying podcasting as part of their wider strategy. SCA’s Tothill says that the proposition is pretty simple, that being “audience and listeners translate into advertisers”.

Perhaps alluding to past experience, with SCA being one of the bigger, early investors in podcasting in Australia (among the big networks), he adds: “Some podcasts, through no lack of trying, just don’t get the audience profile, don’t get those listeners and they don’t get revenue. Equally, there are those with large audiences that do very well.”

He also says that SCA’s proposition is with “a combination of in-stream advertising to get reach, plus podcast advertising which has that exclusiveness and integrity. We use them as a combination. What you buy from us is complete audio.

“This allows you to get reach [that podcasting alone can’t deliver].”

Nova Entertainment digital commercial director Kane Reiken

Nova’s Reiken sings from the same hymn sheet as SCA, pushing podcast buying as a part of the media mix.

“We’ve definitely seen that steady stream of increase in advertisers wanting to take part, and that is fuelled by brands wanting to understand how podcasting can play a role in the media mix,” he says. “We are in a building phase for the future… When you compare revenue against established media like radio, obviously the [difference] is going to be quite stark.”

Layton adds that the gap between advertiser interest and content is because of a persisting myth that “you can’t measure the impact of advertising in podcasts”.

Pointing to ARN’s Podsights Benchmark Study, Layton says that’s simply not the case. “You can absolutely understand if someone heard an ad and then wound up on that brand’s website. That level of data does exist for advertisers. But a myth remains, and we need to keep engaging [with marketers] and keep unpicking those heritage issues.”

Walkerden agrees that education is needed for podcasting to grow its slice of the media spend pie and that marketers need to understand that podcasting, unlike radio, “is not a reach play”.

“Smart marketers are seeing the style of audience that a podcast has, we are super targeted. Our customers are those sorts of people, so a brand would find it as the right forum to advertise in,” he says.

“Agencies are scrambling to meet client’s requests to understand what it is,” Nine’s Bourne adds. “Publishers are feverishly working to create or buy content which meets that perceived demand.”

Nine head of digital audio Hayley Bourne

Schwartz Media only has a handful of podcasts on its slate, which has allowed them to really focus on selling “premium audio”. Costello says she hasn’t experienced the disconnect between content and advertiser interest since “a switch as flipped” recently when it comes to media agency and brand interest in Schwartz podcasts.

7am is just over two years old, when we originally went to sell it… it did take about a year to get the momentum up, to convince media agencies. Obviously, it’s a very intimate way to reach an audience, and I think they’re understanding that they can get brand messages one-on-one, into a person’s ear.”

The bottom line

So are any podcasters actually making a living? A significant portion of the tidal wave of announcements on new podcasts we’ve seen in 2021 has starred influencers or existing media personalities rather than dedicated podcasters, so generally people with other income streams.

ARN’s Layton says the majority cannot make a living from podcasting. “There is lots of opportunity to make money in podcasts, but it’s not for everyone and it’s not for the majority. They don’t all end up making a living from podcasts.

“Lots supplement their income and some may get some great coffee money, but there are absolutely a few podcasts that make significant money out of their content.”

SCA’s Tothill says that the “clever podcasters” use podcasting to connect them to a community. “There are people who like to think they can make a living. But the truth of the matter is the clever podcasters have worked out that podcasting allows them to connect to a community.

“If you are an influencer… the personal nature of podcasting allows you to do that. What you’ll find is if you have something unique to say… then you can start to think about how to make an audience mean more from a commercial standpoint. It’s not uncommon for us to be in a position to do a podcast but then also help sell their social media.”

Podshape’s Walkerden agrees, saying “you can’t have [a podcast] as your only ‘piece’. Podcasting for an influencer becomes one of their many content pillars. Social, audio, TV… ambassadorships. I don’t think that podcasting is a ‘one thing’. I can’t name someone for who it’s their only job,” he adds.

On the other hand, Acast’s Isaksson says that there are “many” podcasters on his network that make a living, and that this number will only get bigger. “The bigger radio networks will have a different answer to this because their business models are very different to ours.

“We have many, many, many Australian podcasters who make a good living from podcasting, and I think we’ll see more of that and it will change.”

And what about the investor companies, are they making much from podcasting alone?

When it comes to buying podcasts, advertisers commonly purchase a pre-roll ad with a set value per thousands of downloads. This is called a CPM model, or ‘cost per mile’, and can range from as low as $25 for a 15-second ad to over $100 for 30-second ads on premium podcasts.

Using the Australian podcast ranker, multiple podcasts in the top 10 bring in 500,000 to 1 million downloads a month. Podcasts in the bottom 50 often have under 100,000 downloads in a month, and there are a lot more than 100 podcasts in Australia, which we don’t have this data for.

Costello says there’s a key reason why bigger audio or radio companies, or broader news publishers like Schwartz, sell podcasting in the way they do. Most package up ad sales as part of a broader audio sell, to get reach with radio and then reach targeted consumers with podcasts.

Schwartz Media CEO Rebecca Costello

Schwartz Media, meanwhile, sells ads on premium podcasts like 7am, charging a higher than average CPM. This “premium audio” can only be achieved thanks to the reporters who also work on its publishing offering like The Saturday Paper.

“Premium podcasters working on premium offerings probably can’t make money from podcasting alone. To produce something of the quality of 7am… the depths of the storytelling has had weeks of work already done on it for the paper of the monthly, so my answer would be [there is] no way [to make money from podcasts alone], especially if you want to deliver quality audio.

“It might be different for the big networks… The difference is that if you’re producing all these little news grabs, and you want to insert volume Harvey Norman ads, then maybe you can make a living… But then your CPM is going to be super low.

“We’re very much looking at a quality premium product, and prices and advertisers, in that ecosystem rather than that churning of content which is what we are seeing.”

Tothill says reach is key, which makes sense with the amount of investment SCA is making in titles in its LiSTNR platform.

“Early in Australia there were lots of indies, but they couldn’t get the reach, and there wasn’t enough education in terms of commercialisation. So it was really more of a passion project that people were doing.

“Then broadcasters realised that it can influence an enormous amount of Australians. We invested very early because we believed that with the amount of reach we had in broadcasting, we could communicate what our message was and what the opportunity was.”

Nine’s Bourne suggests that a more measured approach is appropriate, as opposed to just increasing the scale of a podcasting library. “For us, we will invest in the market as it grows but recognise it is still in its infancy.

“In the coming year, we will develop our own original slate of podcast content using credible talent, paired with the power of our streaming numbers and 9SSO overlaid, podcasting will become an essential part of a media buy, not just an afterthought.

Despite this, she recognises that “niche podcasts with rich environments have worth, as the engagements are stronger- no different to paying a higher CPM in your digital buys.”

Podshape boss Jay Walkerden

For an indie like Podshape, Walkerden admits it’s a different strategy entirely. “It’s not necessarily about ‘earballs’. It’s about listening to and looking at the sort of audience, and whether they are more likely to buy [your product],” he says.

Is programmatic buying the answer?

Most industry representatives I spoke with hailed Australia’s commitment to host reads and podcast-specific creative over programmatic buying with a cookie-cutter or radio creative. There was a general sense, however, that programmatic can play an important part of the selling mix, especially when it comes to getting the big holding company agencies to part with their money.

“Programmatic absolutely has a place in podcasts, but as an industry, we need to be careful and there are different ways this has played out globally,” ARN’s Layton says. “In the US, the high majority of podcast [ads] are voiced by the host/announcer read. If you listen to podcasts in the UK you are much more like to hear a radio commercial in podcasts.

“Here in Australia, it tends to lean more towards creative defined specifically for the medium, but there are outlets that will accept radio-type creative.

“Radio creative has a place in the world, it’s there to grab your attention when you’re listening to radio and in a more lean-back experience, but in a lean-in environment like podcasts, that type of creative isn’t necessarily the best way to communicate your message.”

Acast’s Isaksson says when it comes to getting dollars from the big holding groups, offering programmatic buying is essential. “We are so successful with the large agency holding groups. We do podcast advertising well and it’s a very unique position to have.

“I think automation in podcasting and podcast buying is going to be key to growth. It’s one of the barriers… in terms of what’s holding back buying. Programmatic is growing super fast. And there’s definitely a large demand for more innovation in podcasting and audio in general.

SCA general manager digital audio Grant Tothill

SCA’s Tothill says you need to give advertisers the choice, and also makes a note to bust a myth. “Programmatic doesn’t necessarily mean inserting. You can still do host-read programmatic, an agreed voice execution that sits in a podcast.

“It comes back to what you want to achieve. There will always be a place for premium ad execution, and the results are outstanding. It adds an enormous amount of value. Sometimes it’s about scaling up advertising across a lot of different solutions.”

Sponsored vs branded

Beyond buying reads or programmatically inserted ads on podcasts, more and more advertisers are investing in sponsored and branded podcasts. The key difference, of course, is that by sponsoring a podcast, brands can tap into an existing audience and an existing relationship between hosts and listeners. Branded podcasts start with zero audience, which is always a challenge.

Isaksson says there’s been a “massive shift” in terms of how Acast makes revenue, with brands lining up to go beyond just placing a spot. “Historically, the bulk of our revenue has come from pre-recorded audio ads. Now we’re seeing seen a much higher demand for bespoke or host reads or sponsorships.

He describes branded podcasts as “a bit like social video advertising back in the day”.

“Brands want to try it out. Even though there are so many podcasts out there, doesn’t mean one will suit your brand. Should every brand have one? Absolutely not. It depends on our campaign objectives, what goods and services you provide as a business.”

Walkerden adds: “Everyone wants a podcast but most people shouldn’t have one. If you’ve got a brand that wants to sell taps and they want to do a podcast on the best taps, that’s gonna be pretty boring. You’d be better placed telling a story to reinforce the brand. Think about the content first.”

Layton admits ARN is getting more and more advertisers wanting to do branded podcasts because it’s “seen as zeitgeist-y” to have one.

“Like every brand shouldn’t have its own TV show, not every brand needs its own podcast. You need to provide value back to the end listener and create content that isn’t about the brand but links into the brand’s value and strategy,” he says.

“If your question is ‘how often will my brand be mentioned’ then a branded podcast is not the answer. Sponsored podcasts [on the other hand] are a great opportunity to align an existing audience and existing passion point and have it exclusively.”

ARN/iHeartRadio head of digital audio Corey Layton

SCA’s Tothill says a branded podcast can be the answer, if the question is right, and if you align yourself with the right creator. “Where we’ve seen a lot of brands get it wrong, is they decide ‘I will go and create my own podcast that’s about my brand’. [But] people are savvy, if it sounds like your brand, they might not be interested.

“However, smart brands do go and create podcasts within certain genres and certain topics that allow the creator to be free to do it. You have to remember that every podcast starts from zero. So there’s no point doing a branded series unless you are prepared to market it and get an audience.”

Nova’s Reiken says brands should consider sponsoring a podcast first, and if they succeed, then maybe have a crack at starting a branded podcast. “A sponsored podcast is a really good starting point for brands to experiment in the space. You can use it as a launchpad to look at more owned assets,” he says.

The verdict

It’s no surprise that Australian brands are still heavily reliant on heritage media like terrestrial radio and linear television for where they put their ad spend. But there’s no doubting that when it comes to reaching a targeted audience, podcasting can be an effective play.

Podcast spend significantly scaling up is clearly some time away, considering of course that the Australian media and marketing industry tends to embrace change in measurement metrics and spending habits with the speed of a semi-trailer doing a U-turn.

We’ve seen that recently in the fact that after over a year of publishing the Australian Podcast Ranker based on downloads, a move that heavily favoured radio catch-ups over the standalone podcasts that the ranker was ostensibly created to rank, the industry has since moved to a metric based on listeners.

Even that might not have that much impact on how podcasts are bought and sold. Speaking on the Mumbrellacast recently, Ryan Jon, co-creator of the ‘She’s On The Money’ podcast (which was at #11 on the August ranker), said he’s never had a brand come to him and say they want to buy ads because they saw the podcast on the ranker.

Undoubtedly then, podcasting still has a way to go before it reaches the point where it will be competing with traditional media for ad spend. But continued investment in content, especially by the big radio players, suggests there is a strong belief that advertiser interest is catching up.

And everyone wants to be at the front of the queue when that happens.


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