The world has run hot and cold about podcasts since they first began airing about a decade ago.
Even today, this tried and true form of media is a hard sell for advertisers. According to the Wall Street Journal, about 17 percent of Americans over the age of 12 listen to podcasts at least once a month (that’s 46 million listeners), a significant increase over the eight percent found in 2008. Regardless of the growth, podcasts remain a very small fish in a very big media buying pond.
Advertising Budgets Leave Podcasts Behind
Although advertising budgets for podcasts are growing slowly (up two percent this year from last) they still pale in comparison to other media budgets.
For example, television ad spending for 2015 was around $66.7 billion, radio media buying was $17.6 billion, Internet display ads were $11.3 billion and even billboards topped $3 billion. Podcasts were a mere $34 million, just a tiny fraction of ad spend across the industry. This low number is partially due to a limited number of podcast publishers — the 10 top publishers have the ear of over 40 percent of all listeners.
Instead of creating a media field that promotes marketing experimentation, the tight niches that podcasts are developing may be strangulating spend somewhat. Niches create a tight and risky market for advertisers: on one hand, because podcast ads are typically read by the presenter, the audience tends to trust them more readily, but because audiences are so limited, a product may simply not appeal to that niche at all. Podcast ads are also considerably more expensive than other forms of advertisement, ranging in price from $50 to $100 CPMs for top programs, as opposed to the $18 CMP for YouTube ads.
Can Podcast Advertisers Measure Return?
Perhaps the biggest stumbling block for podcast advertising is the ability to measure return.
Because downloads don’t necessarily translate into actual listeners, marketers have no reliable way to gauge their success or failure. Since downloads aren’t tracked by IP address, there’s no way to know if each download is unique or is the result of non-human action. New York Public Radio, NPR and other public radio producers are working on solving this problem, however. They intend to issue new guidelines on what constitutes a unique download in an effort to better standardize measurement across the industry, and to establish podcasts as more of a direct response marketing platform.