Podcast Killed the Video Star:  How Podcast Advertising Builds Authentic Engagement with Millennials

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Written by Digital Surgeons,
• 8 min read

Far from the sleepy, calm tones of your grandpa's talk radio shows, podcasts are surging in popularity, particularly with millennials. After seeing over 80 million downloads for season 1, Serial, the story-telling true-crime podcast just came back for season 2. Alec Baldwin's show, Here's The Thing has celebrity guests that would make Jimmy Fallon envious, and now even BuzzFeed has gotten into the action and sponsored Women of the Hour hosted by Lena Dunham.

Despite a consistently growing audience, podcasts rarely are top of mind for brands looking for non-traditional advertising platforms. With increased competition for share of attention, banner blindness, and prevalence of adblockers, podcasts could (and probably should) become part of the marketing mix for some, but not all brands in 2016.

Once considered to be a niche medium, increased smartphone usage and ease of in-car listening has led to an overall boost in podcast consumption, with millennials making up a large portion of the audience.

Research shows that 35% of millennials listen to at least one podcast regularly. Edison Research reports that the 39 million average monthly listeners are evenly split between genders, are around 30 years old, have college educations, make more than $75,000 a year, use social networking sites multiple times a day and have an affinity for technology.

In case that didn’t sound like an attractive enough demographic, here's the icing on the cake: 54% of them have made purchases from podcast ads and sponsors.

Capture Your Consumer’s Mindshare When They Aren’t Distracted

Small changes have been contributing to growing the podcast audience. The podcast app is now non-deletable from iPhones, and our cars, where most podcast listening happens, are more connected than ever. A majority of newer model cars in the US can play audio from smartphones, either via bluetooth or auxiliary cable. The GSMA Connected Car Forecast predicts that 100% of all cars sold in 2025 will be internet connected.

Unlike traditional radio, podcasts fit right in with the on-demand economy that Millennials are used to. Search through the Podcast app on your iPhone and you can choose from over 250,000 podcasts that cover practically any interest. All you have to do is press play and you can listen to what you want, when you want, and most likely for free.

From a marketer’s perspective this is valuable because by their very nature, podcasts can go where TV and Internet can't. While someone is driving, walking the dog, gardening, at the gym and so on, brands can use podcasts to connect with a quantitative and qualitatively defined audience without worrying about them being distracted by competing screens.

It may seem counterintuitive that a listener can be more engaged with a message while doing something else at the same time, but one must remember that a podcast takes place in someone’s head, and the podcast listener is an active part of the narrative process. Since there is no visual information in a podcast, a listener is constantly building the story in their minds, which leads to stronger engagement.

Emma Rodero, a communications professor at the Pompeu Fabra University in Barcelona, studies how audio productions retain people’s attention. According to Rodero, “listening to audio allows people to create their own versions of characters and scenes in the story. [But] unlike looking at a written page, is more active, since the brain has to process the information at the pace it is played.”

When done well, audio consumes and captivates the audience.

Jad Abumrad, host of the extraordinarily popular podcast Radiolab says, “In a sense, I’m painting something but I’m not holding the paintbrush. You are. So it’s this deep act of co-authorship, and in that is some potential for empathy.”

For example, a reader can skim a blog (hopefully not this one) and get the general gist behind an article and move on without ever having a sense of the author as a person, whereas a podcast listener is hanging on to the hosts’ every word as a story progresses. The listener visualizes scenes, empathizes with people and develops a rapport with hosts with whom they’ve built a special kind of trust and intimacy.

It’s this special relationship, and unique form of auditory engagement that can be leveraged by marketers looking to also build a rapport with a specific set of consumers in a context in which they’re actively engaged.

More Authentic and Impactful Sponsorships

In the past, brands have carefully chosen celebrities as spokespeople for their products in hopes of a halo-effect around their advertised products, and the same can be said for these podcast hosts / celebrities. Typically, sponsors pay to have hosts either read or play a short ad between segments or during breaks, and this added layer of personalization acts like an endorsement.

Ryan Stansky, the marketing manager from Squarespace, a popular podcast sponsor has said, “We feel [podcast advertising] creates a deep personal connection to our brand.”

Tim Ferriss, the host of The Tim Ferriss Show (the #1 rated business podcast on iTunes) only works with sponsors whose products he has personally tried and recommends. Ferriss reads his sponsor’s ad scripts aloud with his own personal flair before, during and after his show. As you can imagine, for a listener who has established trust with Ferriss and considers him a credible source of information, this form of sponsorship is more impactful and authentic than a traditional TV or radio spot read by a stranger.

The results speak for themselves: The NPR Podcast Sponsorship Impact Survey from July 2015 found that 75% of NPR podcast listeners have more positive opinions of companies that sponsor NPR podcasts, and 62% prefer to purchase products or services from those who do.

So What Kinds of Brands Should Sponsor Podcasts?

If you listen to podcasts yourself, you can probably ramble off some of the usual sponsors and find the common thread: MeUndies, Blue Apron, SquareSpace, Casper Mattress, Stamps.com, NatureBox, and of course MailChimp (Mail-Kimp). All are companies that sell their services or products online, and the reason why is fairly simple: despite the surging popularity of podcasts the ROI of sponsoring them is still somewhat difficult to measure, so direct response tactics are used as a measurement tool.

There are some exceptions (such as CVS and Scion running awareness campaigns through popular podcasts) but for about 80% of podcast advertisers, ROI through this platform is typically measured through visits to dedicated landing pages, and listeners are incentivized to redeem savings using coupon codes and the like.

The demographic is attractive, the targeting is precise, engagement is high and ads are more authentic than other mediums.

To Be Successful, Brands Must:

  • Have a specific target audience in mind
  • Sponsor a podcast where the host is a trusted authority on a subject matter relevant to that audience
  • Be able to convert customers online to better ascertain their ROI

Capitalize on The Resurgence of Radio

Alex Blumberg, a podcast producer and host best known for his work on Planet Money and This American Life recently said, “Radio has been saved the disruption that has happened to other media. It’s been frozen in time for 50 years…Now that everyone is walking around with a radio in their pocket at all times, and now that all cars are going to be connected, the form can flourish again.” Blumberg is putting his money where his mouth is, and has co-founded the podcast network Gimlet Media, which has turned out a handful of top-rated iTunes podcasts since it’s inception in August of 2014.

Speaking to the foreseeable growth and profitability of podcasts, several other podcast networks have cropped up. These networks are counting on online retailers and bigger brands to follow the demand as the industry continues to mature and targeting becomes increasingly sophisticated. While dynamic ads and new podcast platforms seek to bridge the gap between where consumers are and where brands can easily quantify their ROI, the delta that exists today should not deter brands who sell their products and services online and can run a direct-response style campaign.

Beyond an overall improvement in the production quality of podcasts, today’s popular podcasts are a big deal — they’re large scale productions with full-time staff, advertisers and their own celebrity subculture (remember when Ira Glass was on The Tonight Show?)

In the same way that radio has been part of the daily life of commuters, the on-demand nature of podcasts tied with increasingly affordable data plans has made it easier to consume podcasts on-the-go. There’s less friction than ever in finding the exact kind of podcast you want to listen to, exactly when you want to listen to it. Done right, advertising on podcasts is a great way to cut through the noise and make an authentic connection with affluent, highly influential consumers.


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