June 21, 2016
If there's any question on the potential for podcast advertising, Lex Friedman would like it to answer it once and for all. As EVP/Sales and Development for major podcast advertising network Midroll, Friedman has found a best way to optimize advertising revenue for podcasts, as well as create the best ad copy to maximize listener response to the live reads given by the podcast hosts. Here he explains just what makes advertising special ... and successful.
What were you doing before you joined Midroll, and why did you decide to get into this business?
I came to podcasting through a somewhat unexpected route, but I feel completely at home in the industry now. This is where I belong!
After working at a series of Internet companies, and selling a website startup (The Daily Plate) to Demand Media, I took a job as a senior writer for Macworld, an Apple-focused tech publication. While there, I started a podcast with a friend on a then-fledgling (now no longer existent) podcast network. When that network struggled to sell ads for my show, I started trying to sell ads for the podcast myself. And when I had early success selling ads for my show, other friends with podcasts asked me to sell ads for their shows, too. About three months after selling my first podcast ad, I represented more than 50 shows.
I got into the business because I was both a podcast host and fan. And at Midroll we have a win-win-win scenario: Podcasters do their shows because they can get paid. Listeners are happy because they get to hear their favorite shows (and learn about interesting advertisers, too). And advertisers are happy because the ads work. So I definitely felt attracted to the aspect that podcast advertising feels positive for all parties involved.
Your history has largely been on the creative side of things. How did those instincts impact your ability to sell podcasts?
The fact that I've never sold anything other than podcast ads has served me well, I think. My approach to selling podcast ads has been one of transparent honesty, which aligns nicely with the genuine sincerity that characterizes the host-read live ad reads we're selling.
I also think my creative background has helped me work with advertisers on creative approaches - whether in terms of helping them script copy, or come up with creative brand studio integrations ideas and the like.
What's the biggest challenges in selling podcasts?
There are two: The first is getting brands and agencies who are new to the space comfortable with the benefits that come from a live read, despite the hesitations that can sometimes accompany ceding the final creative output to the host.
The other big challenge is confusion in the marketplace over measurement. Measurement in podcast advertising bests measurement in TV, radio and print by a wide margin, but digital buyers wish we had YouTube-style reporting, which the medium simply doesn't support because of technical limitations with how podcasts are delivered and consumed. Our job is to better educate advertisers over what our key metric - downloads - really means, and how to interpret and understand it.
There are a lot of podcasters out there, including big companies such as PodcastOne. Is the competitive nature of podcasting making your job harder...and how do you deal with that competition?
Competition is good; it forces everyone to be their best. The shows we sell, we sell exclusively; no one can book your advertising on "WTF with Marc Maron," "Comedy Bang! Bang!" or "The Bill Simmons Podcast," except for us. So that's a healthy advantage over competitors.
The biggest challenge with the competition is that the confusion over measurement is sometimes seemingly encouraged by others in the space. We wish advertisers could compare apples to apples, but when some vendors call downloads "listens" (though we know not every download becomes a listen), and measure those "listens" less conservatively, and make claims about using technology the medium literally doesn't support, it ends being more like comparing apples to carburetors instead. That's how competition is making our job harder.
But at the end of the day, we have a great product to sell at Midroll, and our advertisers love working with us. We are unique in that we are an end-to-end podcast company: we create original content; we help monetize podcasts from other hosts and networks; and now, with the Stitcher acquisition, we have a robust system for speaking directly with the consumer.
Are there certain advertisers better suited for podcasts ... and if so, what are they?
Any advertiser that actually wants their ad to have attention paid to it are good for podcast ads. We hear from our listeners that podcast ads are the only ads they pay attention to these days, in a world of banner blindness, radio station presets and DVR'd television.
Obviously direct-response advertisers were the foundation upon which the advertising industry was built. And yet the past two years or so have proven that podcasts work incredibly well for brand advertisers looking to build awareness, too, driving more unassisted recall and retention than any other advertising medium.
Are there certain characteristics of podcasts that makes them more advertiser friendly (in terms of length, content, etc.)?
The fact that listeners are actively choosing to listen to podcasts makes a big difference. There's nothing passive about podcast consumption. With radio, you dip in and dip out on your commute: If you tune in during seven minutes of talk or music, that's what you hear; if you tune in during a seven-spot ad break, you're likely to tune out instantly or change the station. But if you launch a podcast as you head to work, you're very likely to keep listening as you head up the elevator, and even as you sit down at your desk - and then you'll pick up the same show on your ride home, too. That means you're much more likely to hear - and respond to - our ads than you are those from another medium.
The host-read element is obviously huge, too. Hosts are able to leverage the relationships they've built with their listeners -- built on trust, reputation, honesty, transparency -- which lends a lot of credibility to their ad reads.
And we're a world of niches. There's a podcast -- and a podcast host, and a podcast audience -- for every topic, niche and demographic on the planet. Coupling the perfect host with an advertiser targeting just the right audience is a pretty great combination.
How important is branding in podcasts - and is it different that branding in other media forms such as radio stations and TV shows?
We've seen that branding works incredibly well in podcasts. Unaided recall rates are sky high, and listeners can rattle off multiple points (menu items from quick-serve restaurants, shows from TV networks or subscription services, etc.) unassisted in remarkable numbers. And again, that's because they're actually genuinely engaged with the ads they're hearing, while consumers have become really good at tuning out ads on radio or TV -- if they don't just immediately skip them.
Several of your podcast hosts have radio experience. Are all radio personalities suited for podcasts, or do they need specific traits?
Being a good podcast host is about having something to say, and being able to connect with your audience. Many radio hosts have that ability well-honed.
Several radio stations have podcasts of their various shows. Have you heard them and if so, what's your take on what they're doing right or wrong?
That's tricky. Obviously public radio has had tremendous success taking their shows and making them into podcasts, but that's because public radio programming is built on "driveway moments" -- they expect you to get caught up in the storytelling and stay in your car at home until the radio program has finished. That content makes for good podcasting.
But if you instead think about a three-hour radio show, one that most listeners are dipping into and out of on their commutes and errand runs, that may not lend itself as well to the podcasting medium, where listeners typically listen to every minute of an episode. If it's a show that can't sustain itself or your attention for its full runtime, that's a concern. There is definitely opportunity there, but the content needs to be curated specifically for the podcast audience.
What's the best way to market and promote podcasts?
On other podcasts!
Could a podcast be more salable if it contained video or was more music oriented ... or do you believe podcasts such always be talk and audio-only?
Video podcasts haven't really taken off. It's the fact that I can enjoy a podcast while doing other things -- commuting, working, doing chores, washing dishes and working out -- that is helping push the medium increasingly mainstream. Video podcasts lack that important benefit.
Music podcasts can certainly find audiences. If a show is a straight-up music playlist, you have to worry about music licensing legalities and fees, of course - and host-reads on that type of show are less impactful, since there's not really a host to glom onto.
One of podcasting's strengths is the listening "on demand" aspect, where users can listen at a day and time of their choosing. But could you sell more spots or make more ad revenue for special podcasts that debuted at a certain time, such as Marc Maron's interview with Obama?
We can make more ad revenue when we know a mammoth guest, like the President of the United States, is going to appear on a show. But Squarespace was excited to be the exclusive sponsor of that Obama episode of "WTF" whether it dropped at 8 am on a Monday or three in the morning on February 29th. The very nature of podcast subscription, distribution and on-demand listening means we're well past dayparts and the like.
So what's the future of podcasting ... will it be the Netflix of radio? An entirely new entertainment platform or a complement or accessory to other entertainment media?
One interesting stat is that as many people have listened to a podcast in the past 30 days as have posted a tweet on Twitter. We used to have to start every meeting with advertisers by explaining what a podcast is; now we typically debate whether Adnan Syed (from "Serial") is really guilty, or reference recurring jokes from "Comedy Bang! Bang!" That is to say, advertisers are understanding the space more and more because they're also often listeners themselves.
It's the early days for podcast growth. As podcast discovery, subscription and listening gets easier -- with apps improving (including our own, recently acquired Stitcher); Google Play making podcasts available by default on Android, mirroring Apple's prominent placement of its Podcasts app on iOS; connected cars making it easier to connect your phone or download new episodes of your favorite shows automatically ... it's only going to get easier for people to find and enjoy podcasts. The growth potential here is massive.