Can performance marketers leverage the power of podcasts?

Can performance marketers leverage the power of podcasts?

An insight by Ellen Ward-Collins, Manager – Planning, M&C Saatchi Performance

The rise of smart speakers and ‘freemium’ audio streaming services across connected devices has accelerated the adoption of podcasts. Podcasts are booming in the UK, with nearly six million people now tuning in each week, according to a recent Ofcom study (nearly double from just five years ago).

With this surge in audio audiences comes new opportunities for advertisers. Podcast ads take on a similar design to traditional short-form radio ads in terms of timing and duration, however what makes them unique is the sponsored format they take, allowing for more personalisation and creativity. ‘Ads’ (endorsements, sponsorship mentions and branded stories) dictated by podcast hosts, help build a personal, human connection with audiences because listeners are more likely to trust them out of their affiliation with the host. Since podcasts take the form of ‘Series / Episodes’, listener loyalty is generally high and as a result, audiences are more receptive to the brands that the podcast hosts decide to endorse. As Tom Webster, podcast expert and vice-president of Edison Research puts it; ‘Consumers are buying stories – and podcasts are a very effective way to tell those stories.’

Another differentiator to radio ads is that many podcast streaming services (e.g. Spotify) have access to user login data, allowing brands to run ads that target demographics in the right time and place. A marketing report by Rakuten recently uncovered that 88% of UK people find online ads interruptive, and a US study found that more than half of respondents had a bad opinion of advertisers when an ad appeared on a cluttered web page. Streaming branded messages via podcasts can avoid these issues given ads are played one at time, serving contextually relevant content to the listener, enhancing their impact and ability to influence a path to conversion. Perhaps that’s why a Nielson study found that podcast ads were more effective than standard digital ads.

However, as a result of their more premium and personalised quality, access to entry for brands looking to deploy podcast ads is expensive. CPMs (or cost per 1,000 listens) can vary between $18-$25 for pre and mid-roll placements, more costly than display advertising. For performance marketers to invest in these channels, while ensuring KPIs are met, strong results need to be guaranteed in order to achieve positive return on investment (ROI). While implementing vanity URLs on a brands website can give some indication of how many listeners this podcast ad drove, the journey from initial listen to page landing is lost. While measuring the success of podcast ads is currently an imperfect science, steps are being taken to improve the measurement capabilities. In December 2018, the IAB introduced apodcast measurement certification program and National Public Radio announced its new open source Remote Audio Data system, which helps podcast publishers determine whether or not users are listening to the ads embedded in their podcasts.

While positive steps in tracking podcast ads have been taken, in a performance marketing world grounded in accurate data measurement, multi-touch attribution, and granular insights, the evidence that podcast ads are key to driving more effective campaigns is yet to be proven.

To hear more about how performance marketing can reach your audiences and drive ROI for your business, get in touch today