The Podcasting Advertising Ecosystem

Can you give us some background to your role in advertising and at Acast today?

I have had an interesting run over the past 20 years. I started my first job at CNN Turner Broadcasting in the late 90s, where they had one of the best training programs in the world. There I received a good introduction into the world of media which I never knew existed; how media is bought and sold and those relationships. Over the years, a little thing called digital emerged. We got out of the digital 1.0 hiccups and I made the switch in the early 2000s when the stronger business models emerged. All my friends thought I was crazy. I saw an opportunity as consumption was changing and new platforms were allowing brands to connect with those audiences, and I jumped full-on in. Over the last 15 years, I worked for video companies, spending time at programmatic-first companies, automating buying and selling, and then back to a big company with Spotify, where I was responsible for the global video business.

I have now come full circle to an audio company, who is using technology to change how people consume podcasts and which allows creators to earn a living.

What is the fundamental difference between the video and audio advertising ecosystems?

Video has evolved several times over the past two decades. When I first got to Turner Broadcasting in 1999, Ted Turner had a program called Media at the Millennium. They were trying to describe how cable television had reached the point of mass consumption and that it was very similar to broadcast television, and therefore, should command similar pricing. Obviously, we now know it is very equal but when digital video was emerging 10 to 12 years later, it was faced with similar challenges. You had the long-tail of video – full episode players being premier branded content – but one thing absent in both instances was the lack of standardization in media metrics.

In the late 90s and early 2000s, a lot of cable networks were not rated yet, so it was difficult for them to command the type of pricing that broadcast enjoyed because they could not get a Nielsen rating, which was how all audiences were monetized. Looking to digital video, what started with the full episode players in those same TV networks, they enjoyed their first bit of success. All the other content, with large viewers, every time you type in “brownie recipes” into Google, you would find a recipe and there would usually be a video there with it. It might not be a branded piece of content, but it was still valuable. What was needed there was a metric that people could understand, which could cut across everything and be applied across all those channels. That metric was viewability, which first emerged because there was concern around muted in-banner videos.

Pixels were also hidden, so it was a fraud issue at first, but then people realized this was a standard metric they could apply to the full episode players. The two metrics all digital video buyers looked for over the last decade were viewability and completion. Did you watch my video all the way through, and during that period were the appropriate amount of pixels in play for the right amount of time? That is where video really took off, around 2015, 2016, with a metric that everyone could measure. Third parties were able to do that, from integral ad science and mode and double verify. There were associations and regardless of whether the viewability measurement was correct, it was still a standard.

With podcasting, that is one of the challenges that face our medium – there are different standards and metrics – which is a little confusing. We need our viewability moment and I believe it is coming soon.

Is there a difference in the technical journey and process of advertising between audio and video, using RSS feeds or URL embedded links for example?

Everyone has a content management system, but podcasting is a free medium and you can get any podcast anywhere, with the exception of Joe Rogan and others. If you want to watch an episode of CSI, you cannot watch that everywhere because there are rights issues and walled gardens. Podcasting is slightly different, which is what makes it more complicated.

What would trigger that viewability moment?

Third parties are very important; external firms who measure, verify and report on these metrics. We have seen the big companies like Facebook and Google get tripped up when grading their own homework. While that duopoly is critical to the ecosystem, there have been many challenges and concerns around the reporting of that data. Someone needs to come up with a metric – audibility, listen-through rate – something like that. Many companies are working on it, but it needs to exist to allow the channel to grow in the same way video did.

Is a measurement issue preventing the industry from going to the next level?

The commercialization of it is a big piece. It is a misconception, but the critics of podcasting are correct; we have not made it easy to buy or understand. There is confusion between downloading and streaming. There are different types of ads – host-read, audio, pre-produced and branded content. The way IAB measures an impression is different from if it is dynamically inserted. There is still much confusion and many different players out there. Metrics such as viewability and demo targeted measurement would certainly help.

Where is the industry in the shift towards dynamic insertion of ads versus the less scalable, host-read version?

Dynamic ad insertion is a must to both scale the business and properly measure it. Think about the practicality of being able to rotate creative, in a time we are living in right now. Imagine having a travel ad baked into a podcast from a year ago, which still happens on back catalogs; great content exists from Ted Talks to history podcasts and even true crime. Many podcasts are evergreen and older ads do not take into account the current travel restrictions. Other categories have also been affected by it, so there are challenges.

Acast pioneered and invented dynamic ad insertion two years ago. We do it for every single ad we deliver. Our different ad formats do sponsor host-read ads, because it has been a main fixture of podcasting for years. Part of the joy people have is that a host talking about your ad makes it more organic and fits into the content; it is an endorsement. We want to continue that, but there are obviously challenges in host-read ads, particularly in a programmatic environment. You still have to pre-record an ad and deliver it, but other innovations can happen here. Dynamically inserted audio ads are either read by a producer or take into account different types of creative capabilities.

Perhaps we could dynamically change creative, based on location or weather or similar data we know about you. As long as it is customized, the host-read part is not as important as the fact that this is not radio where the same 10 million people listen to it. That is the piece the audience are asking for. We are experimenting with all those different ad formats and the critical part of our research is making sure we understand which works; which ones resonate with consumers but what will also drive outcomes for advertisers. If we do not drive outcomes for advertising, none of it matters.

Could a podcast host pre-record many advertisements and insert them dynamically, based on location, demographics and platforms?

We have that capability in-house, and work with podcasters to do different script versions. It is a key part of our business to consult on which creative to use in the right moment.