No two ads on Marc Maron’s WTF podcast are ever really the same. Whether he’s plugging website builder Squarespace (“Are ya thinking of opening a restaurant? Are ya? Are ya going to need a website?”) or snack delivery service Naturebox (“It’s snack time, people!”), each ad is read by Maron in a way that feels like an extension of the stream-of-consciousness style he has on the podcast.
Advertisers are drawn to the personal aesthetic of the ads, which are recorded live at the same time the podcast is recorded. The ad inventory on Maron’s podcast is “pretty much sold out for the year,” according to Lex Friedman, who oversees sales and development at Midroll Media, the podcast network WTF is a part of. “We love the live read,” Friedman told me.
Since podcasts emerged as a medium in the early 2000s, host-read ads have been one of the primary forms of monetization available to podcasters. Think of it as podcasting’s version of native advertising.
But others are trying to bring another online ad trend into audio: programmatic advertising.
The Swedish podcast company Acast earlier this month announced a partnership with Triton Digital, an audio advertising marketplace, to bring programmatic ads to its podcasts. Around the same time, Panoply, Slate’s podcast network, acquired Audiometric, an Australian podcast CMS that enables the dynamic insertion of ads — meaning that the software can insert fresh ads whenever a podcast is downloaded or streamed, whether that’s a podcast’s latest episode or one that is already a few years old.
Even though podcasting is in a period of significant growth, much of its infrastructure is based on technology from the early days of the medium. Tracking anything more detailed than download count is problematic; there’s no good way to know, for instance, whether a given episode was actually listened to. As a result, podcasters have had to rely on other means to get a sense of their audiences — listener surveys and the direct response codes hosts read off during ads. (“Get $50 off any Casper mattress…using the code ‘HangUp.'”)
“Podcasting is based on very old technologies, and it hasn’t changed for at least 10 years,” Audiometric CEO Jason Cox told me. “When we set out to develop the ad-insertion technology, the rule for us was that it should work through any platform, any player, no matter where the listener was listening. To do that, we had to modify the actual audio file at the time it’s requested by the user.”
Cox cofounded the company in 2012 with his brother Darren after growing frustrated at the lack of options to gauge the listenership for the podcast Darren was running at the time. Panoply hosts shows from Slate and a number of other outside producers such as The New York Times Magazine and Sports Illustrated, so Audiometric’s CMS will allow it to standardize production across all its podcasts.
Audiometric runs its own ad-insertion servers, so it can ensure that the ads were actually delivered. The platform also lets Audiometric target ads based on the genre of the podcast and the location from where it’s downloaded.
Acast, the Swedish company, also offers ads targeted by location in addition to more traditional podcast ads. It can also target ads based on the time of day a podcast is downloaded or streamed, and it offers banner ads for podcasts that are listened through its own app.
Acast has expanded to the U.K., and earlier this year it raised $5 million to fund additional growth. It’s already opened up shop in the U.S., and is planning a more formal launch later this fall.
Triton Digital’s ad exchange, a2x, automates the sale of ads and, using a smartphone’s device ID and cookies on desktop, lets advertisers track listener behavior. Acast plans to start offering the programmatic ads through its U.K. operation.
“The kind of data you’d get back from advertising on Acast is the same kind of data if you were to advertise on The New York Times,” Måns Ulvestam, Acast’s CEO and cofounder, told me. You’ll see actual impression, you’ll see people who click the banners if they’re through our channel, you’ll see actual delivery of ads, and it’s verified by third-party metrics as well.”
Panoply, for its part, is “thinking about [programmatic advertising]…we are just prioritizing other things ahead of it right now,” chief revenue officer Matt Turck told me. He said Panoply’s focus now was to improve the amount of data it has on its listenership, and the acquisition of Audiometric will be part of that focus. “There’s not a lot of data you can apply to this as of yet,” he said.
As the network continues to grow, he said the more data the company can offer advertisers, the more successful it will be. “If we’re in the digital space, talking to digital marketers, they want to know when their ad was listened to, if their ad was listened to, by whom their ad was listened to. We’re not able to provide a lot of that data right now,” Turck said. “However, we know it’s very effective. The biggest advertisers in the space are the direct-response advertisers, and they come back over and over again because they measure on ROI, which works.”Panoply’s current CPMs, or cost per thousand listens, range from $20 to $80 depending on the show, Turck said, adding that Slate’s podcasting revenue thus far in 2015 is 6 times what it was in 2014, though Slate has added a number of podcasts and launched Panoply in February.
Among the larger players in the space, there’s concern about alienating what’s working already. Some say it’s possible to replicate the feel of a host-read ad with a pre-recorded, automatically inserted spot. But Midroll, for example, says host-read ads fit smoothly into the tenor of the podcast and are worried about losing some of the ads’ effectiveness.
“For us, when we want to go and have these live organic baked-in ads, we don’t see a way to do it programmatically that would be invisible and seamless,” Friedman said. “Every time my host reads an ad, it’s different.”
And while some are counting on ad insertion to monetize old podcast episodes, Midroll recently launched Howl Premium, a subscription product that provides access to archival content of every podcast in the Midroll network, as well as other audio content.
But for smaller podcasts, programmatic and digitally inserted ads might present a solution for them to monetize their offerings. Acast’s Ulvestam pointed toward its stable of podcasts on English Premier League soccer. There are only so many fans to listen to podcasts on, say, Crystal Palace, Tottenham Hotspur, or West Ham United, but together, those podcasts have a more significant audience of like-minded listeners.
“For them, the old model of advertising wouldn’t work, because it’s not worth approaching a podcast with 30,000 listeners, Ulvestam said. “But if you bring them together, you have a vertical of 500,000 Premier League fans. That’s certainly interesting to advertisers.”
The podcast market is growing. According to a February survey from Edison Research, 17 percent of Americans over 12, or 46 million people, had listened to podcasts in the previous month, up from 15 percent in 2014. Most podcast listeners are still using the Apple Podcasts app on their iPhones to listen to podcasts — according to a report from Clammr, 82 percent of mobile podcast listening takes place on iPhones, and of those iPhone users, 78 percent use the native app.And as the market continues to expand, companies will be looking to introduce new technology and new monetization techniques will continue to evolve.
“It’s a space that makes sense,” Turck said. “When you think about audio on demand, we’ve seen what the Pandoras and the Spotifys have done for the music space. It’s going to be the Midrolls and Panoplys that change the radio programming space, and it’s pretty exciting to watch because it’s happening fast.”