Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.

{audio:0:14:36} I’d love to hear more about your history, specifically in the podcast world, and then we can jump into my questions and chat from there.

{audio:0:14:45} My experience in the podcast space started with Vox Media, where I was an account director. I handled top-tier accounts within the consumer electronics and telecom verticals, primarily Verizon and Slack. I saw their slate being built out and paralleled it to the same growth that I had seen at CBS when I was working there, and the OTT state was being built out. I watched CBS All Access release for the first time, then Sports 24/7, and News 24/7, and I watched that team go from one to about 20. When I was at Vox Media, I saw podcasting growing in the same way. A team of one to two people, like a GM and one rep, grew to 10 in the year I spent there. They onboarded multiple operations people, account managers, and salespeople, and that's when I knew that podcasting would be the next big thing in media. After my year at Vox, I jumped to Acast, where I spent a few years as an account director, got promoted to senior account director, and was one of the top global salespeople.

{audio:0:16:36} Were you in Stockholm, London, or New York?

{audio:0:16:42} I was in New York for most of it, and my last year, I was in Los Angeles. Though I did end up having accounts in London. I had an account in Copenhagen and one in Switzerland. I had a pretty broad territory. I think it was one of those things where I sold the product so well that they sometimes let me step outside my territory. Primarily, I was New York-based, tier-one agency, and client direct. I cracked and handled accounts; I should have a quick hit list for you. I handled Samsung, T-Mobile, Verizon, and many of the same ones I handled at CBS and Vox Media. These included L’Oréal, Drizly, King, which was Candy Crush, and IL MAKIAGE, a D2C cosmetics company. I was able to turn these accounts into million-dollar accounts. I was the first US salesperson to recognize over $1 million in a quarter; that was Q2 2020, and I accounted for 31% of the US revenue in the annual 2020.

{audio:0:18:26} I had done over $7 million, collectively 125% to target by the end. I had gone from about $200,000 quarterly quota to over a million-dollar quota in the years I spent there. I built a keyword-targeting product for podcasts with the lead engineer in the US, so I helped onboard a speech-to-text transcription service and a natural language processing service. Onboarding different vendors within the measurement and attributions space, specifically companies like Claritas, Podsights, Nielson, and Kantar. I also worked hand in hand with the global head of ad ops and legal lead within the US to work through MSAs and DPAs and get all of those different services onboarded so we could parallel with digital as much as possible. I know that's a long-winded answer, but I’ve had a large breadth of experience selling and building products at Acast. 

{audio:0:20:23} That sounds like a very helpful set of experiences. You are well placed to help me understand my first question. One of the things that mystifies me about the podcast industry is that it doesn't monetize anywhere near as close to the share of attention. It's growing quickly, but when you look at hours spent on podcasting as a percent of media versus podcast advertising dollars as a percent of media spend, it seems that the ad dollars have not followed the eyeballs, or ears, in this case. What is the major hiccup keeping podcasting from getting a bigger share of the wallet?

{audio:0:21:18} One of the biggest obstacles within the channel has been, and is currently, the long tail of podcasting. Think about the inventory distribution within a network. Even in a big network like Acast, 10% of the shows have 70% to 80% of the inventory. Then you've got a huge long tail of shows that is difficult to monetize individually. A company called RedCircle is now trying to address this. It's a self-service tool where people can buy different, very small, niche shows across thousands and thousands of shows. I forget the most recent statistic, but let's say ballpark, there are two million shows, and the top 100 shows have really been in place. There hasn't been a lot of turnover in the past five to 10 years. Some of the biggest shows are the same shows that were big five to seven years ago. There's that perspective, which is hard to monetize. The same contextual, as well as behavioral, targeting just hasn’t been able to follow through because of the disjointed nature of the technology, which is RSS feeds piped through different apps or podcatchers; Apple, Spotify, even iHeart, Pandora, wherever you might consume a podcast. The passback of data has been difficult to properly target.

{audio:0:23:43} In RSS, they’re relatively dumb pipes, so it’s tough to really get.

{audio:0:23:52} Also, when there are specific walled gardens like Apple, you're not getting much of the data, at least within the US market, because you then talk about different things like privacy laws. The workaround is trying to leverage a device graph to match impressions and then use the matched impressions to create a probabilistic target based upon a percentage of those matched impressions. This isn't proprietary. Claritas has its own segmentation where a publisher network could go in and match all of the impressions served and give, let's say, an index of this show over indexes. Then you can start to collate all of those shows as a showlist and target it based upon which shows hit a certain index. It's pretty rudimentary. 

{audio:0:25:18} A lot of people don't do it because it requires more work, in my opinion. It's as simple as that. The technology is there, but the effort and direction in building out ad products are not. Most of these networks are so heavily focused on just trying to secure shows that they aren't focused on the next step, which is the ad technology products. They’re focused on trying to secure an upfront with the talent and an agent for one of these top shows that haven't really moved with any real regard for, let's say, the top 100, with overinflated upfront contracts. Spotify is notorious for going out and acquiring shows at $5 to $10 on what the actual revenue might be. Many of these medium-sized networks, or maybe larger networks that aren’t Spotify, end up losing money on the cost of acquiring the talent, and there isn't the back-end focus on selling the long-tail inventory. That is the power of the network within the rotational, preproduced run-of-network, 30-second spot, almost like a radio ad. Everybody focuses on the shiny thing, which is the host-read sponsorship. 

{audio:0:27:01} Of course, that's important, and you're going to see higher rates in advertising – that's CPMs – on the sponsorships. But the real value of any ad network is the size, breadth, and the run-of-network product ad properly monetizing that. I did a good job with that at Acast because I employed different attribution and measurement tools, primarily Podsights and Claritas, to translate that back to the advertisers. Specifically, those with DR, down funnel ROAS or acquisition KPIs.

{audio:0:27:50} You mentioned you're doing a lot of D2C, which has been one of the easiest to measure because of the call to action.

{audio:0:28:01} Yes and no. With the top-of-funnel awareness ones, there has been a lot of fluff in the products, and they're really expensive. But when you get into those budgets, you're talking about fortune 10, fortune 50 companies, and they have the money to spend. Because an awareness survey from a Neilson or a Cantar, for instance, will run you $15,000 just for the survey. The D2C down funnel folks couldn’t justify that cost even if they wanted to.

{audio:0:28:47} On the idea of the long tail, digital also has a long tail. It seems like it’s a solvable problem in certain industries. What needs to happen for it to be a solvable problem in podcasting?

{audio:0:29:03} There are two ways to track impressions. One is with an RSS prefix, and the second is with a pixel, so a one-by-one. You need to be tracking those two ways on the impression side, and the volume is much more than your attribution measurement for the effectiveness of an advertising campaign. Let's say you run a campaign; you're an advertiser and probably running millions of impressions and only getting 100 or 1,000 purchases. The hundred or thousand are easier to track than the million impressions. The millions of impressions need to be tracked, matched, and provided, ideally in a data science format, where you can start building an algorithm. Neilson has a product like this. I've bought it, and I've sold it; it isn't very good. 

{audio:0:30:24} The iteration needs to be, from my perspective, network by network, and/or networks need to start sharing data. I candidly think this is an issue due to priorities and where publishers, and even ad servers, prioritize their tech debt or their engineering staff and resources. There are two major audio ad servers right now that everybody uses. One is Adswizz, owned by Pandora, Sirius XM eventually, and the other is Triton, eventually owned by iHeartMedia. Those products have never really been rolled out from those folks. There are two points, here. One is that you need some type of data vendor, like Claritas, that already has the segmentation and prebuilt audience segments to create a model. The second is that data privacy laws make contextual targeting a lot easier. In the US, it's still very much legal to go out and collect certain pieces of personal information like, let's say IP address. The IP address is the crux of this data matching because once you have somebody's IP, the targeting gets much more specific. You can say, we know that's a household with five people, 15 devices, head of household makes over $150,000, and there are probably two children. That's within the US. That's part of the reason why Claritas is a US-only business. 

{audio:0:32:40} When you expand into Europe, you've got privacy restrictions like GDPR, and it isn't legal to do that same type of impression or audience segmentation targeting. You do need to drill into lookalikes, not only based upon the first thing, but once you get out of the US, it's contextual targeting, which everybody is moving to. There are different, really advanced ad technology partners working in the video space in particular and rolling out products. I think that would be the most applicable to pivot into podcasting, some type of heavily invested ad-tech startup where they’re using machine learning and/or a data science team to build out models for contextual targeting for anything outside the US. Or you use a lookalike market where you're like, we know what the average income is for the US market. The UK market is not apples to apples, but it might be apples to pears. You can give corresponding targets and then extrapolate from there. 

{audio:0:34:07} Lastly, you can have a better polling functionality because this is part of the problem coming back into the Neilson and Cantar products. If you think about the user flow of a survey, that user flow is, I'm listening to a podcast. Neilson says hey, go to this website and fill out this survey, and then you have to type in the URL slug because it's a survey. Most people don't even do that anymore; they'll just type in keywords, and it might not even populate, then you miss out. So let's say somebody actually gets to the survey. Typically, it's a sweep space; you get a free $100 gift card to Amazon if you fill out the survey. You have all these barriers to entry that don't live within the actual listening app or podcatcher. 

{audio:0:35:13} This is a bit of what I'm doing with the tech startup right now, being able to provide interactive features within different apps via SDK. Polls are super valuable from a targeting perspective because you can start to get first-party data from the podcatcher itself and sponsor goal opportunities, primarily in sports betting. Sports betting is a huge advertiser at the moment, within the US market, that is very interested in polling and first-party data being able to be sent server to server. 

{audio:0:36:04} But coming back to the polling in terms of the targeting, you can ask the questions in-app, which could be very simple questions like, what's your average household income. Do you have kids? Are you an in-market purchaser for a home right now? That will give you more information than what’s being collected from the app specifically. The user must engage in giving that information, which should bypass many of these concerns within GDPR and other privacy laws worldwide.

{audio:0:36:46} What do you think about conversational targeting and pushing into that area to help advertisers buy across more relevant content?

{audio:0:37:03} That just sounds like the Acast version. I helped build conversational targeting at Acast with the lead engineer, who is no longer at Acast. We vetted and onboarded speech-to-text vendors, and that's where it starts. In my mind, there's only one vendor that you use for that, and it's Rev. Rev is probably the best speech-to-text in the game right now; they have been for a while. They're based out of Austin, a very well-funded late-stage startup. I don't know if they've been bought yet, but maybe they will be bought soon. It starts with the transcription because if you use a shitty transcription, you're only getting accuracy rates of 80%, let's say. Google and AWS or Amazon end up giving you low-accuracy transcription. So, if you're talking about contextual targeting, you must first talk about the transcription. You pay a lot more to get white-glove transcription, meaning a human being goes through it. Rev offers their Rev AI, a computerized version API plug-in, so you can start using their services at a very low per-minute cost; per-minute of audio transcription to text.

{audio:0:38:51} From there, it was natural language processing for a long time in the industry. IBM Watson is one of the best NLP tools in the game right now. The thing that they do is identify keywords, categories, and entities. The trickiest part when you get into this pipeline is, if you think about the tech pipeline, we take an audio file, transcribe it to text, make sure that it's super accurate, and take an IBM Watson to extract the keywords, categories, and entities. People have a hard time with sentiment because this gets into the whole brand safety conversation with the huge Fortune 10 and Fortune 50 customers. 

{audio:0:39:46} We went through a whole exercise on this when I was at Acast; this was industry-wide, too. Brand safety or brand suitability, because brand suitability sounds a lot better than brand safety. If you say safety, you're going to inherently ask, is there something unsafe? Whereas if you say brand suitability, that means is it a good fit for my brand or not; it's not about unsafe content. That is an important distinction within podcasting because you might have extremely violent or graphic videos on YouTube. On podcasting, it's strong language, sure, and it could be very graphic, but you don't have that visual component that, in my opinion, is not a safety thing from where I sit. You might have crass or even violent language. Still, the video component of brand safety in advertising to me is of far greater concern than somebody talking about it on an audio file. 

{audio:0:40:52} Though when you get to sentiment, I haven’t used them personally, but I know there’s a company called Descript; I think they might be backed in some way by iHeart. Descript is a company trying to figure out how to solve for the sentiment analysis. It's my understanding, and I don't know this for sure, that they use Rev. If you start asking around to all the major podcasting players and services that offer transcription, most of them will end up using Rev because it is the best tool out there, in my opinion.

{audio:0:41:51} Do you think that good conversational targeting does change the advertising game, or not really?

{audio:0:41:57} I do, but again I don't think there have been enough resources, and I also don't think there has been enough specific true data science and machine learning behind it. Another company I haven't used personally, but many people swear by, is Veritone. If you're talking about true AI and modeling, Veritone might be one of the best in podcasting because they're not even in the podcasting space. They represent a whole bunch of verticals and industries like government and compliance. If you go to their website, it's a slew of different diversified portfolios. It just lends itself to podcasting because it truly is a diversified revenue stream for them. 

{audio:0:43:00} I would say that yes, it would change the game if people properly funded it and built it out. I've been saying this my entire career, from CBS to Vox Media to almost every single publisher I've seen or worked with; nobody takes it seriously from a data science perspective. They fund account coordinators, account managers, customer support, ad operations, a lot of reps, account directors, senior account directors, middle management directors, VPs, and EVPs. Then they build a branded content division. The branded content division is incredibly expensive. You're building an editorial staff that parallels the editorial but within the commercial department. You hire 30 different head count, then you're like, that branded content division is really expensive, and then you start to cut that branded content division because you're trying to double into the strategy that you went down the wrong path for. 

{audio:0:44:08} I've always tried to push people to build out a true data science team and have had pushback at every single company I've ever worked at. It could happen if you funded it properly, took real data scientists, and built an algorithm to properly model conversational targeting. There are specific companies within the video space that are doing this because of the huge opportunity there is on YouTube, globally, specifically within the GDPR.

{audio:0:44:50} Broadly on podcast advertising, if we look out five years, how much bigger do you think podcast advertising is than it is today? Five years is a long amount of time, but is it 50% bigger? Three times bigger, five times bigger? I’m curious how much growth you see happening in the industry.

{audio:0:45:16} That's a good question. I don't know what the multiplier would be, but when I hear that question, I think about it differently, which is how podcasting will change because our idea of a podcast today might not be what it will be. Specifically, I'm referring to the ability to take text to speech. Also, incorporating other types of spoken word mediums rolled into podcasting. This company, InPractise, is an educational resource. So when will lectures be recorded by professors or white papers converted into audio from pharmaceutical companies where these can become more bite-sized audio clips? A five to 15-minute educational resource for, let's say, an internal pharmaceutical compliance issue; is that a podcast? Or is that just an audio file? 

{audio:0:46:42} I think there will be different ways that we don't see right now in the audio industry that people are most likely going to blanket and call a podcast, in the same way in advertising, all of ad-tech got called programmatic. People call it programmatic because that's the word people picked up on. I think people will start to call a lot of audio – if it's not specifically music – podcasts. IoT and connected devices are rolled into this. Within the advertising component, specifically to home in on your question, how much of that app experience will be open versus closed? Because the open app lends itself to visual components, it lends itself to display advertising and to even CTAs or sponsorable opportunities; I'll use Google Maps for an example. Google Maps puts McDonald’s pins on Google maps. That's a paid-for advertising product, not because Google wants to tell you where all the McDonalds are. If the audio app experience becomes more visual and less passive, then you will have more advertising opportunities because the app is open. Not to plug this company that I'm working for too many times, but it's called Adori Labs.

{audio:0:48:32} Adori takes audio components and creates fully visual and interactive functions for podcasting. Once that content becomes more visual and interactive, you'll see this weird blend of, is it a podcast or a YouTube video. In the past 12 months, YouTube has increased to the third-largest consumption vehicle/podcatcher/app/whatever you want to call it, after Apple and Spotify. You’re seeing a difference in consumption behavior, specifically from younger demographics, 25 and under. I call them the iPad generation because most of their parents just plopped them on an iPad from when they were a baby all the way through to when they're 18. It's like, shut up, here's the iPad, turn on YouTube, and that’s why they’re so familiar, anecdotally. I do not have data that there is this correlation.

{audio:0:49:39} Still, I think that difference in consumption behavior of the next generation being so familiar with screens is going to change the podcast industry as we know it. Spotify is probably the best at this right now, but the other folks will have to catch up. For Sirius XM, all their apps will have to pivot, or I think they will be pigeonholed into an older demo, niche, talk radio, which people are now calling podcasts. So old talk radio, the BBC has had a slate of 100 radio stations for over 100 years; now they're calling all of that podcasting.

{audio:0:50:28} It’s funny, you look at the top list of US ones, it’s all like, CNN’s thing, Fox News’s thing, and they were all talk radio before. Or a TV talk show with just the audio.

{audio:0:50:43} Totally, and this is my whole point. The spoken word is one of the oldest forms of communication between human beings, and it's not a mystery to me as a human why podcasting, talk radio, and voice are so powerful. I think the advertising opportunities will get much more nuanced, even more nuanced than today, because there isn't a centralized app. If that becomes YouTube, you'll see that gobbled up by YouTube. In the same way that it was Facebook and Meta for a long time, even Myspace before that, and Vine had its moment, whichever consumption vehicle that we’re talking about, YouTube might be that next consumption vehicle. It will change podcasting as we know it because it will incorporate many more visual components. The advertising opportunities will be much more varied in the same way they are with, say, Google Maps or Google Search. 

{audio:0:52:03} To summarize, you believe that podcast advertising will be significantly bigger, but it will be because of a broader definition of what podcasting is or interactive, more visual things like that. Is that a fair way to describe that?

{audio:0:52:17} That's a fair way to describe it. I think serious dollars are left on the table from that long tail, and people are not properly investing in trying to create ad products for that long tail. Again, that's two-fold, from your callout to contextual targeting or conversational targeting, as well as the more behavioral and audience segmentation targeting that needs to be done on the impression side. Not the other conversion of attribution for the advertising side.

{audio:0:52:58} Does the industry need to go fully programmatic to get to that long tail? I know they are now sort of private programmatic, not fully programmatic.

{audio:0:53:12} It's a good question. The problem is that, truly, three players are offering programmatic podcast advertising. It's Tritons, AdsWizz, and Google, and for whatever reason, the Google Audio ad server hasn't either got the investment it needs or is not a good product. It's a possibility, but I think the problem is that the RSS feed, the technology behind it, has made it so difficult to lend itself to programmatic on top of it. 

{audio:0:54:00} My whole point that this industry will change again, probably sooner than people expect, is that it's going to be hard to catch up in real-time bidding, fully encompassing the entire channel inventory perspective, like digital for programmatic. I think it's probably a harder bet to make than the bet that I'm making right now with Adori, which is, let's try to take that audio content and make it into visual and interactive content so that it can lend itself to different consumption vehicles like YouTube and most likely others that are going to pop up in the near future that will be parallel to a YouTube. This could be a Sirius XM or a Pandora if they release a video product just like Spotify has done.

{audio:0:55:01} You started to mention some company names; that's a good segue to my next question. Looking forward a few years, who do you think are the winners in the podcast advertising space. Who's taking the bulk of the dollars?

{audio:0:55:19} Right now, the winner is Spotify. Of course, things can change, and a popularity thing could happen that I’m not foreseeing, but the tough thing about Spotify's strategy is that they've acquired too many companies too quickly. If they can collate and aggregate them and work all the different things together, they are positioned in the best place. That could take five to 10 years to try to put all those puzzle pieces together. They're incredibly well-positioned because they've made some of the most strategic acquisitions. They are looking at it as a long-term strategy because there's so much more margin within podcast than music. Their end goal is monthly active uniques, not necessarily advertising. They're looking at it through a different lens than many of these other folks, which inherently gives them a different strategic advantage. 

{audio:0:56:45} They're saying, we'll take the loss over the next year, over the next three to five years, but in 10 years, we'll be the destination for podcasting. Does that mean something like YouTube can't spring up and eat their lunch because they're focusing on just trying to fit all the parts, and then it changes into a different distribution channel? Potentially. But the other folks acquiring a lot in the space are the usual suspects within audio and podcasting. It's Amazon, it's Audacy or formerly Entercom, it's iHeartRadio, and it's Sirius XM.

{audio:0:57:30} There's a podscape that Magellan and Sounds Profitable put together for a marketing resource. It's a take on the LUMAscape, done by LUMA Partners. I bet you know them, a VC firm within media and entertainment, but they didn't have a good audio one. I met with Leo from Luma Partners for a one-time sit-down meeting because their audio LUMAscape wasn't very good. I think Magellan and Sounds Profitable do a good job of it. They consistently update it, and in that top right legion are all the major acquisition folks I just mentioned: Spotify, Amazon, Entercom or Audacy, iHeart, Sirius XM.

{audio:0:58:17} What do you think about the long-term future of the radio players? Audacy and iHeart seem high on the list, but it's unclear. I'm curious how you think about them in the midterm, competitively.

{audio:0:58:33} I think they have a real opportunity for many different reasons. My personal experience isn't within terrestrial radio. That industry has been so hard to pivot, even after multiple bankruptcies from 2015 to 2018, which was a key period of high-profile bankruptcies, including iHeart, I believe. Even after that, getting those companies to pivot into a more digital-first approach has been hard. It's confusing because, even after you see that industry get overhauled, there hasn't been a refocus until we are going to go heads up against a digital publisher. To me, the most interesting thing would be if Amazon, which has arguably the most money in the world, is acquiring a whole bunch of podcasting. Why wouldn't they go out and acquire a huge, historically terrestrial-backed radio just for the inventory? That is what Spotify is doing for the content within the specific podcast space; why wouldn't you go after local markets? 

{audio:1:00:08} This is being done within OTT right now, too. People are going after local TV stations. That gives you breadth and reach. It gives you an additional long-tail product that we've been talking about repeatedly within a segmentation and an audience targeting approach. To me, it makes a lot of sense, but it is incorporating a lot of different versions of the technology, and not to bring all roads back to Adori, but Adori started within the radio. It was built for WAV files. It could listen to the radio and has a Neilson transmitter that allows you to see visual content in a kind of Shazam playback. Turning on the microphone and listening to the radio will populate images with interactive functions. 

{audio:1:01:11} This has been the really interesting thing working for that startup, in particular because I've seen their journey from 2016, let's say, where they started going after the radio industry, and they wouldn't buy it because they couldn't pivot. They just chose not to pivot. They went bankrupt. Then Adori pivoted into podcasting, and the hosting distribution space is almost ubiquitous. You can go online and get a free version of a hosting distribution platform with Acast, Libsyn, Blubrry, or Megaphone. They pivoted again in March for video and YouTube because that consumption vehicle was brought to the forefront. I think they're positioned well from a technology perspective. Trying to find those technology services that have survived that long and service the different audio functions will be strategic as it changes to this more visual and interactive format.

{audio:1:02:29} What do you think about some of the smaller players? You mentioned Libsyn AdvertiseCast, Acast, and Audio Boom. What do you think about their positioning for the next few years?

{audio:1:02:39} I think about it market by market. When you get into those smaller players, you must start analyzing. Is this in the US, is this in the UK, or is this in Australia? Does it roll up into a region? How much market share do they have in each? Typically, those companies have a foothold in the US and nothing else. So if you can find one in the US and then other market, I think that's probably your north star.

{audio:1:03:11} That’s Acast, obviously, because they are pretty strong in UK, strong in Sweden, and at least a lot of boots on the ground otherwise.

{audio:1:03:19} Totally, Acast is a great example of that. They’re a global company, and they have a huge UK office. I think I just saw on Podnews that they opened up a Southeast Asia rep. One of the biggest regions that is consistently overlooked is LATAM, in my opinion, and I think that’s simply a language thing. I thought of this when I was at Acast, too. The Spanish language is a huge opportunity that people are leaving on the table. Not only the Spanish language but everything we're talking about up to this point, just for LATAM.

{audio:1:04:06} Are you optimistic about Acast over the next five years or not?

{audio:1:04:14} I resigned from Acast but Acast had a lot of positives. This is nothing public, but Acast went through an awkward late-stage startup or teenage phase. It grew incredibly quickly, and there were a lot of the things that I had seen at Vox Media in the publisher world of classic pitfalls, like going out and building a complete 30-person headcount branded content division. Those sales cycles are six to 18 months. You end up spending 30% to 40% on production costs. Your distribution also costs you money. When you look at the amount of time, effort, and resources, you need a legal head to negotiate that contract. 

{audio:1:05:25} In podcasting, you need multiple technology service providers to make it work. So to me, there was a lack of strategy when I was there within the right products and opportunities. It was like trying to parallel a digital publisher when in reality, Acast was an ad network. That was my biggest thing with Acast. Also, they are amazing people. I still have lifelong friends from Acast. I'm not trying to knock it too hard. I think the culture and what Ross built over there is pretty special.

{audio:1:06:13} They seem to be in this unique space where they say they're global, bigger than the Audiobooms, the Libsyns, the US-only businesses, and frankly, the US radio guys are US-only businesses.

{audio:1:06:28} Yeah, like Hubbard or folks like that, which are medium-sized local networks. There's a real opportunity for acquisition there; just clean it up and try to bring it into the 21st century.

{audio:1:06:48} If we look out a few years, do you think Acast has gained market share in applied podcast advertising or lost it? What do you think about that?

{audio:1:07:01} From the outside looking in, I'd say it's probably about the same. I think they've had more headcount, and their company has grown but from a presence and a market standpoint.

{audio:1:07:13} What if you look five years in the future? Suppose you're guessing where it will be versus where it is today, based on what you know.

{audio:1:07:25} I think they need a lot more money to have a bigger network and more flagship title shows.

{audio:1:07:33} Basically, do you think they need to acquire more? They've announced some decent ones recently.

{audio:1:07:38} Yes, I think it’s two-fold. And they announced conversational targeting as well. Gosh, what's his name?

{audio:1:07:50} They just got Marc Maron.

{audio:1:07:54} Yes, WTF. I hear that. I think it's two-fold with that. Being able to compete heads up against Spotify with their named talent and then consistently working on the back-end ad products, we’ve been talking about kind of ad nauseam for most of it, but it’s important. I truly believe that it’s important. And trying to pivot away from things like branded content. Branded content is a time suck. It’s a headcount resource. Unless that’s your business, then you’re going out and hiring a production studio anyways. You’re then fishing contracts to production studios for whom it is their bread and butter to do this. 

{audio:1:08:48} Acast is kind of saying they’re not going to compete with Spotify in the real top end, where Spotify has Joe Rogan or whatnot, but they’re competing with the mid and long-tail and being that kind of network. Does that make sense to you?

{audio:1:09:04} It makes sense to me. I just think there needs to be a real focus specifically on ad-tech. I personally churned accounts there because they outgrew Acast.

{audio:1:09:33} They go to everybody else because it's a diminishing return, specifically with D2C down funnel folks. These are hypothetical numbers, but I could grow those to a million-dollar account, but then our performance would tank because they outgrew the network. I churned probably four million-dollar accounts in three to five months. 

{audio:1:10:03} Acast probably had 25,000 shows at that point, and there wasn't enough real inventory and listens for people to want to stay past a certain size.

{audio:1:10:15} And strategy, and foresight. That was one of the things I took away. If I knew I was going to churn that account, I wouldn’t have sold it to over a threshold amount and would have tried to hone in an evergreen strategy, so you could get that recurring renewal business quarter over quarter. When I was flagging this left and right, I received no resources to do the things I needed to do. Many people know this, but I asked for two specific personnel headcount requests for over a year and never got it while I was one of the top global salespeople ever. Instead, we hired a dozen different people across the world in terms of branded content, onboarding content, and managing talent to onboard content. That was where I was like, okay, obviously I'm not being taken seriously here. 

{audio:1:11:34} Understood. One of the things Acast talks about being an advantage is the idea of being able to sell internationally. We touched on this a bit. You talk to them, and they're like, iHeart and Megaphone can't bring you content international; 30% of listens are international. But when you sell to US advertisers, does that matter?

{audio:1:12:00} Does that matter for podcasters, like you want to join Acast versus joining iHeart, or something like that?

{audio:1:12:08} Not in the US again, but that’s not to say it’s not important for the local market reps. There’s money there. It’s not going to be important to the US market. 

{audio:1:12:23} It will not be important for US advertisers. In the US, I don't know if you looked at their investor presentation recently, but they talk about being the number three of listens in the US, which would suggest they're a relatively sizeable player. Does that make sense?

{audio:1:13:33} Yes, I could see that being true. I think it depends on who you ask in podcasting. Bryan Barletta just put together a Sounds Profitable newsletter about different rankers, so it does depend on who you ask because there is no third-party transparent core function. Even some third-party attribution people like Podsights or Chartable were acquired by Spotify.

{audio:1:14:14} So it's hard to say who's number one, who's number two, who's number three. Because you ask three different people, you will get three different answers. But I could see that being true, sure.

{audio:1:14:30} Their comment was they have 17.6 million monthly uniques, which put them just behind iHeart and NPR, and ahead of Wondery and the NY Times.

{audio:1:14:42} I won’t get into the huge rabbit hole here, but monthly uniques is a very hard metric to come up with in podcasting, just as a flag, and I would be very skeptical. I don't care whether it's Acast or anybody else; anybody giving you monthly uniques in podcasting, just take that with a grain of salt. It's a fine guidepost, but the best benchmark to me is not only listens, but the sell-through rate of those listens. 

{audio:1:15:33} And the frequency of the times, it’s so complicated with uniques because of the RSS technology. You get into noisy IPs and primarily cell towers, so anybody who's giving you a unique is giving you an estimate based upon how many people use a cell tower to ping it for their podcast.

{audio:1:16:01} It’s a complete cluster.

{audio:1:16:04} A weird thing about the US market is if you look at the UK or Sweden, most of the publishers, like BBC, etc., outsource to an Acast or someone else. But in the US, many people like the NY Times, NBC, and ESPN, kind of self-represent themselves in the podcasting space. What would it take to get these bigger publishers to outsource their ad sales representation on the podcasting side?

{audio:1:16:39} Guaranteed sales. In the same way that from a content perspective – I forget the contractual term – but just like you sell an upfront to a podcaster, you get guaranteed $50,000 in revenue, and we work backward from that. That's how you're going to talk to publishers. Otherwise, digital publishers are also in a tight spot right now. There are very few and far between large and medium-sized digital publishers. Most of them folded when I was at Vox media. Mic imploded, and the list goes on. So the podcasting opportunity is a diversified revenue stream at low-cost production. That is an incredibly valuable tool for them. The problem is they can't sell as much of it unless they're completely sold out of sponsorship, and to make up for the lack of inventory that they have, they skyrocket CPMs, so they'll sell through a sponsorship at $50 to $60 CPM because they have to. Otherwise, it doesn't make sense for them to have the show. So guaranteed revenue back to the publishers is a way to onboard more content; I think the best you said is ESPN because they're like a BBC where they have a whole slate of radio shows that are now just called podcasting.

{audio:1:18:21} And the funny thing is they are using some of the Megaphone tech, and Megaphone is owned by Spotify, which has The Ringer, which is a competitor, so it's all fun and games. Last question. Is there anything I'm not asking you about podcasting or Acast that I should be paying more attention to?

{audio:1:18:49} You’ve asked pretty good questions. I would flag again to look at LATAM as a huge opportunity for expansion. We live in the United States. Many people are bilingual as-is, with Spanish and English, so that would be one of my first things. I think that’s a huge growth opportunity that’s left on the table right now. The second thing would be to encourage people to invest in the ad tech. Whatever tech that Acast wants to position, the specific advertising technology. The third thing is to try not to get caught up in audio-only format because I think that will change in the future, if not already changing with the YouTube consumption metrics. Getting ahead of that will position you better in the next three to five years than not, where you'll have to scramble and come up with a strategy when it's too late. 

{audio:1:20:11} That’s what Spotify is doing. They've been releasing this "video product" for three years now, and they're finally getting to it because it's a hard thing to do. It's a hard tech lift to do. I'm pitching Acast currently for Adori; that's public knowledge, and I can talk about who I'm pitching Adori to. It's a real opportunity. The competitor to Adori is Headliner. Headliner is a convertor of audio to video, but it only gives you a thumbnail. Looking at conversion tools that allow you to take audio into video is not only going to be the future, but it will also allow you an additional revenue stream within podcasting. Plus, it's on YouTube, and you can turn monetization on with a click of a button.

{audio:1:21:19} You're right about having to go outside of your core audio sweet spot and realizing that these media will all converge.

{audio:1:21:32} They truly will. OTT is going to become a part of this, too. It's happening slowly, but it's happening. I own an LG Smart TV, and I'll turn on Spotify with the LG smart TV. I might have never done that three years ago, so I think all these channels and mediums are converging, and it has to do with people's comfortability with screens and interfaces. Let's say Apple comes out with a true TV; that would change the game. Those things are happening; Apple has released diagrams of their AR/VR headset. There are real things within the hardware technology space that allow for this stuff to happen with smart TVs, OTT, and the internet of things, with all of these channels converging within, I would say, the next five to 10 years. 

{audio:1:22:53} Excellent, thank you so much for being generous with your time. I appreciate all your thoughts. You have a lot of expertise in the podcasting space. 

Acast: Podcast Advertising Formats, Adoption, & Competitive Landscape

Former Senior Account Director at Acast

inpractise.com/articles/acast-podcast-advertising-formats-adoption-and-competitive-landscape

Acast: Podcast Advertising Formats, Adoption, & Competitive Landscape(August 4, 2022)

Former Senior Account Director at Acast

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