Podcast Advertising

Lex Friedman, EVP at Midroll, joined us at FirstMark to discuss how to get started with podcast advertising, covering ad units, creative best practices, CPAs / CPMs, and more.

Leading podcast ad networks are Midroll, PodcastOne, Podtrac. Midroll reps 200 shows, and growing fast. Their marquee shows include the Startup Podcast, WTF with Marc Maron, and others.

There are typically three podcast units (pre-roll, mid-roll, and post-roll) and two types:
> Host-read units (the only type offered by Midroll.) Pros: more "authentic" message to consumers and better conversion. Cons: higher CPM, hosts can turn down advertisers.
> Dynamically inserted, pre-recorded audio offered by other networks. Pros: richer targeting (including geographic). Cons: lower performance.

Midroll's units: 30-second pre-roll (~$18 CPM), 60-second mid-roll (~$25 CPM), and post-roll (~$10 CPM). CPAs vary widely, but a "typical" range is a $25 to $150 CPA. One advertiser managed a sub-$20 with the lowest-quality, post-roll units alone.

CPMs are calculated based on downloads. Current state of the industry does not enable verification of actual listens (which, essentially, happens offline). Downloads are measured by bandwidth consumed, with most data coming from Soundcloud or Libsyn.

Currently, 60% of Midroll advertisers are direct response. DR advertisers verify performance with vanity URLs and offer codes. In Midroll's opinion, podcast advertising works: 90% of DR customers renew for at least three episodes.

To get started, you can "test" podcast ads for as little as $5-8K. $8K will get you a spot on a show with 350K downloads, for example.

First step is to select your target show based on interest/demographics.
> Midroll data includes: age brackets, gender, education, income, and spend on apps/dining/etc.
> To see what data Midroll has specifically, go to http://www.podsurvey.com/ and select a show. You can "hack" the URL to see specific demo data for a show by adding /demos to the end, like so: http://www.podsurvey.com/startup/demos.
> Midroll also has a rich tool to allow you to filter/select shows.
> You can do some implicit targeting based on show topic; Cult of Mac -> iPhone users, the RV Podcast -> rural and outdoorsy listeners.

Second step is your creative.
> You can either pre-record your own audio (on other networks) or give a host bullets/script to read during recording.
> If host-read, Midroll recommends bullets, with most important items first, allowing hosts to inject their own personality and make the ad more authentic. On a related note, you can give the hosts free stuff - then they'll even more authentically talk about their own experiences.
> Most important part of the medium: repetition, repetition, repetition. Units typically mention a URL 2-3 times, for example.
> Much better to go deep than broad; buy two units on one show rather than one unit on two shows.

B2B advertisers have succeeded, although the success stories are often SMB-focused rather than enterprise:
> Examples: Xero, Citrix, 99 Designs, ZipRecruiter, etc.
> Successful B2B advertisers have typically started on the small number of business-focused shows. The success has led them to expand to consumer / general interest shows with high-income listeners, which also perform well.

Some other interesting stories/data:
> 52% of listeners are on iPhone, 16% tablet, 26% Android.
> 80% of downloads happen within 72 hours of publishing; 80% of those will listen within 72 hours (i.e., ~65% of listens will happen within a week of publishing a new show.) Some advertisers have visible traffic spikes, but not nearly as pronounced as radio/TV.
> Whatever your CTA is, MAKE SURE IT'S MOBILE OPTIMIZED! Listeners are on mobile, and will respond to the CTA on mobile, so...
> There is some remnant inventory available at low cost
> Successful podcast advertisers repeat across a series. Bonobos,for example, will start with a midroll on a show, and then buy the pre- and post-rolls for the next three weeks before repeating the cycle.
> Lead times are as short as 2-7 days, and as long as 6 months. Entrepreneur on Fire (one of the top shows for B2B advertisers) is currently booking for Q3.
> Average spend for 25 top advertisers is $45K/year. Average 1st-time spend for DR advertisers is $12-16K.
> Why are podcast CPMs > radio CPMs? Although no hard data available, Midroll and podcasters themselves (who set prices) claim that podcast ads perform way better. No tune-out effect; most users are captive, and do not switch to another station.