Cracking the Code: Why Many Companies Hesitate to Dive into Podcast Advertising

 

The topic of podcast advertising was the focus of a recent interview with Lizzie Widhelm and Scott Walker from SXM Media, the advertising company that powers services like SiriusXM, Pandora, SoundCloud (through a partnership), and the SiriusXM Podcast Network. Although the podcasting sector is expanding quickly, podcast ad revenue still makes up a very modest portion of the $209.7 billion in total digital ad spending in the United States last year, coming in at $1.8 billion. Widhelm and Walker explain why the potential of podcast advertising has not been fully realized.

One important aspect they emphasized is the evolution of podcast advertising. Purchasing podcast advertisements used to be relatively difficult because it required transferring funds between several partners and broadcasts. But SXM Media has been working on ad tech to support programmatic and direct sale transactions, which are speeding up the procedure. This result shows that the market is changing so that advertisers can invest in podcast advertising more easily.

They also mentioned the distinctiveness of podcast advertising in comparison to traditional media. Because the material of podcasts is not prerecorded like that of songs, they provide a more genuine relationship with the listener, which alters the advertising landscape. To improve the listening experience, advertisers need to be more thoughtful about how they incorporate their messaging into this format.

Widhelm and Walker nevertheless expressed hope for the future of podcast advertising. Advertisers are progressively moving away from buying advertising at the show level and toward buying them programmatically, which enables more inventive formats and goes beyond host-read ads, they added. They think that this pattern will keep the revenue from podcast advertising growing.

Despite this confidence, a big obstacle still exists: advertisers must boost their investment in the medium if they want podcast ad revenues to catch up with the number of the podcasting audience. The debate also briefly touched on the writers’ strike’s potential effects, wondering on whether it would lead some businesses to turn to podcast advertisements as a substitute.

Widhelm and Walker highlighted important distinctions between podcast ad revenue and traditional radio. In comparison to terrestrial radio, podcasting offers a more intimate relationship with the audience, greater CPMs (cost per thousand impressions), more flexible ad formats, and a more tuned-in and engaged audience.

SXM Media provides tools and solutions for companies to target content that fits their tastes, taking into account the tendency of advertisers to stay away from excessively political or content that is contentious. The ability for advertisers to choose material that is consistent with their brand messaging enables more accurate audience targeting. In related podcasting news, Peacock will debut “Based on a True Story,” a TV program that investigates the world of fictitious true-crime podcasters. The show tells the story of a financially strapped couple who launch a podcast to track down a local serial murderer, fusing true crime and podcasting into an original story.

Additionally, Callin, a live audio app with publishing capabilities, was purchased by conservative video platform Rumble. By making this change, Rumble, which already broadcasts podcasts and has a dedicated podcast category on its platform, hopes to draw in additional users.

Last but not least, Crooked Media, the company behind well-known podcasts like “Pod Save America,” has launched a subscription service called “Friend of the Pod.” This service is aimed at devoted podcast fans who are prepared to pay for premium features and offers listeners various tiers, providing benefits like early episodes, bonus content, access to Discord groups, and more. In general, the podcasting industry is still developing as advertisers and artists look for fresh ideas and business models to benefit from the popularity and engagement of the format.

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