I have a confession… I’m addicted to podcasts. But it hasn’t always been that way. I used to ignore the Podcasts app on my smartphone because I didn’t know how to use it and wasn’t intrigued by the idea of listening to some strangers talk.
I only started listening because my boss kept texting me episodes of Pod Save America, which discussed politics (one of our favorite conversation topics). After listening to the first episode, I was immediately hooked. The hosts were entertaining, the content was informative, and what was most surprising: the ads were hilarious. I started viewing the ads as a perk of the show.
Fast forward three years and I’m accessing various podcasts on a daily basis. Regardless of the show, I’ve noticed that one thing is always consistent: the host interrupts the episode to briefly discuss a sponsor and usually includes a personal anecdote. In looking back, I’ve made several purchases based on these ads. How did that happen?
Podcasts Are Going Viral
To keep pace with ever-changing consumer habits, brands have increased their advertisements on online platforms (Kumar & Gupta, 2016). In the U.S. alone, digital ad spend is expected to reach $178 billion by 2024, an 87% increase from 2017 (Guttmann, 2020). This marketing mix primarily consists of social media, online banners, and search ads (Guttmann, 2020); however, this is shortsighted because it overlooks another valuable source: podcasts.
Today, podcasts are one of the fastest-growing digital audio formats (He, 2019). Smart brands have recognized this as a profitable method already; of 22 companies surveyed that used podcast ads, they reported a 34% revenue increase from the previous year which is expected to continue annually (He, 2019). Currently, a quarter of the U.S. population is listening to podcasts and monthly subscribers are forecasted to increase by 16% year-over-year, reaching 106.7 million listeners by 2024 (Benes, 2020). As a progressively popular media source, certain shows have likewise gained a cult following. This presents a distinctive opportunity to communicate with a highly engaged audience through a trusted voice: the podcast host.
Podcast Hosts Are the New Celebrity Influencers
Listeners view the host of their favorite show as a dependable source of news, politics, lifestyle tips, etc. Therefore, when a host endorses a brand, listeners are far more likely to trust the information (Zolnikov, 2019). Coming from an intimate source, this is perceived as a word of mouth recommendation which is more reliable than any direct marketing from the brand itself (Berger, 2013). Additionally, a discount code is typically provided, giving the impression that listeners are privy to exclusive knowledge (Berger, 2013). This also prompts listeners to share this insider information and fund their social currency (Berger, 2013). As a result, brands are able to benefit from hosts the same way they would from celebrity influencers, a tactic that has been shown to be highly persuasive to consumers (Kumar & Gupta, 2016).
Don’t Underestimate the Power of the Podcast
Since its emergence in 2003, podcasts have skyrocketed in popularity and created a unique and potent advertising opportunity (Zolnikov, 2019). However, brands are still overlooking podcasts as an essential component of the marketing mix. In addition to offering personalized endorsements from trusted hosts, podcasts facilitate quick purchase decisions. Shows are typically accessed through a smartphone, so listeners are conveniently able to make an online purchase upon hearing a persuasive ad. In fact, a study of nearly 1,000 podcast listeners showed that 65% of participants were more willing to consider a brand that was sponsored in an episode (Zolnikov, 2019).
The other key benefit is the ability to provide relevant marketing—permanently embedded in the episode content—to a highly attentive audience (Zolnikov, 2019). Users generally don’t skip over the host’s testimonial the same way they would a television commercial or magazine ad (Zolnikov, 2019). The sponsorship cost is also far less than traditional advertising, which can be appealing to smaller businesses looking to increase brand awareness (Zolnikov, 2019).
The only caveat is that brands must convince a popular host to be a sponsor. Since hosts are endorsing the brand to loyal listeners and their reputation is on the line, they may not agree to the sponsorship unless they personally like the brand. This could be unnerving to large companies that are used to other types of media outlets fighting for the chance to advertise its name. But even if the power shifts when marketing through a podcast, the payoff to the brand can be well worth the abdication.
References:
Benes, R. (2020, September 9). US digital audio ad spending 2020: Examining radio, streaming audio, and podcast advertising opportunities amid the pandemic. eMarketer Inc. Retrieved from https://content-na1.emarketer.com/us-digital-audio-ad-spending-2020
Berger, J. (2013). Contagious: Why things catch on. New York, NY: Simon & Schuster.
Crooked Media. (2020). Pod Save America [Audio podcast]. Retrieved from https://crooked.com/podcast-series/pod-save-america/
Dove, J., & Jansen, M. (2020, July 18). The best podcasts of 2020. Digital Trends. Retrieved from https://www.digitaltrends.com/mobile/the-best-podcasts-of-2020/
Guttmann, A. (2020, August 27). Digital market outlook: Digital advertising spending in the U.S. 2017-2024, by format. Statista. Retrieved from https://www-statista-com.libproxy2.usc.edu/statistics/455840/digital-advertising-revenue-format-digital-market-outlook-usa/
He, A. (2019, July 12). Podcast advertising revenues will surpass $1 billion by 2021: New figures from the IAB and PwC show that podcasting presents a big opportunity to advertisers. eMarketer Inc. Retrieved from https://www.emarketer.com/content/podcast-advertising-revenue-will-surpass-1-billion-by-2021
Kumar, V., & Gupta, S. (2016). Conceptualizing the evolution and future of advertising. Journal of Advertising, 45(3), 302–317.
Pod Save America political podcast is coming to HBO. (2018, September 20). The Associated Press. Retrieved from https://apnews.com/article/d9a5984297084be490fbbcfc026327e6
Zolnikov, S. (2019, October 28). Should you sponsor a podcast? Hearst Bay Area. Retrieved from https://marketing.sfgate.com/blog/should-you-sponsor-a-podcast
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