As podcast sellers, advertisers, and agencies assemble in Los Angeles this week for the Podfront LA 2020 event and the Podcast Movement: Evolutions conference, Westwood One is releasing a brand new study of advertisers and agencies.
95 executives from all parts of the podcast ecosystem completed an online survey in early February on measurement, attribution, ad tech, and what’s needed for podcasting to become a $2 billion advertising medium. Here are the key findings:
Agencies and brands give poor marks on the current state of podcast measurement, though there is a sense that things are looking up
Only 5% rate podcast measurement and attribution as “excellent.” A whopping 64% say it’s “fair” and 19% deem it “poor.” Yet there are signs that the buy side sees improvements ahead. Compared to prior years, 43% indicate the current state of attribution and measurement is getting better. 57% say things are about the same. No one feels it is getting worse, somewhat akin to saying you cannot fall off the floor.
Podcasting needs a monthly reach of 44% to hit the tipping point of meaningful advertiser investment
Agency buyers and planners and brands say podcast monthly reach will have to grow 12 points for spending to hit an inflection point. Edison’s 2019 Infinite Dial study pegged podcasting monthly reach at 32%. In a matter of weeks, we’ll know the new 2020 podcast monthly reach number when Triton’s John Rosso and Edison’s Tom Webster reveal the new Infinite Dial findings on March 19th, 2020. If podcasting notches another 6-point jump, monthly reach for 2020 will be 38%. Most likely, 2021 will be the year that podcasting achieves the 44% monthly reach threshold.
$2B podcast ad revenues? Better measurement, attribution, bigger shows, and bigger brands
When asked what it will take for podcasting to become a $2 billion ad medium, most of the responses centered on improved measurement and attribution. Some indicate content will need to step up: “Larger scale content…a big breakthrough in the content space.” Others note podcast discovery and search needs improvement. A number feel big marketers coming into the podcast space will be a major accelerator. Several point to the major opportunity to monetize “the longer tail shows which are being relatively ignored.”
Dynamic ad insertion now represents 55% of orders
Two-thirds of buyers say they are using dynamic ad insertion and indicate this represents over half of their buys.
What is the most used podcast test buy parameters?
While advertisers new to podcasting exhibit confusion over how to run a proper test, our seasoned respondents reveal strong consensus on the specs for a proper test of podcasting:
- 5 podcasts
- 3 ads in each podcast per week
- 7-week campaign
- Test campaign running each week
Marketing malpractice: Running a podcast test with one ad a month
Some podcasts report being approached for a “test” with one ad per month. Based on our study of veteran podcast brands, planners, and buyers, such a practice is ill conceived and should be outlawed. One ad a month is like testing the merits of watering a lawn with a squirt gun.
Conor Doyle, SVP Strategy & Investment at Veritone One, recommends podcast tests consist of a larger number of podcasts (15 to 25). He notes the need for aggregated data on category, ad-unit type, read performance, etc. “The more data you can collect on a test, the faster you can scale,” he indicates. Veritone One along with Oxford Road and AdResults are podcasting’s “holy trinity” who have fueled much of the ad spend growth over the past five years.
Attribution services receive positive evaluation and strong purchase intention
Buy side respondents assessed six different measurement services for awareness, evaluation, and intention to use. Attribution services from firms like Chartable, Barometric, LeadsRx, AnalyticOwl, and Podsights score best. A number of the audience measurement services (Edison and Triton) are brand new to the market. Its likely many decision makers have yet to receive a presentation and see sample data.
- Podcast measurement and attribution rate poorly according to brands and agencies. Still, there is hope on the horizon. Two out of five say things are getting better.
- Better measurement, attribution, bigger shows, and bigger brands are what’s needed for podcasting to crack $2 billion in ad spend.
- A monthly reach of 44%, up from 32% in 2019, is seen as a tipping point to a step up in spend.
- The consensus on a good podcast test buy is 105 ads in 5 podcasts over 7 weeks. A test buy of one ad a month is marketing malpractice.
- Attribution services rate well and should expect greater usage. Newly launched measurement solutions need time to be understood and tested.
Pierre Bouvard is Chief Insights Officer at CUMULUS MEDIA | Westwood One.
Contact the Insights team at CorpMarketing@westwoodone.com.