It’s no secret that the podcast advertising market is exploding. Brands like Spotify have made massive investments in the space this year, and market research company Forrester reports a 52% year-over-year growth.
In a new report, Forrester examined how podcast advertising is still an emerging field, with room to improve in measurement and targeting capabilities. Here are four takeaways from the September study that b-to-c marketers should take note of to understand and leverage the growing channel.
Citing a Vox Media study, the report reveals that nearly three-quarters of consumers prefer podcast ads over social or video ads. Experts including Matt Turck, chief revenue officer at podcast-hosting tech platform Megaphone, stressed that while listeners prefer ads read by the podcast hosts, their support of a particular podcast or host also leads them to listen to traditional preproduced ads as well.
“You want to be listening to that show, and you listen to the ad because you know the host is going to be back in 30 seconds,” Turck told Forrester.
The ability to target audiences and measure results is still not fully developed in the podcast ad space. The Interactive Advertising Bureau’s (IAB) technical guidelines for podcast downloads and ad metrics was a start, but there are still unknowns when it comes to measurement.
“The IAB helped standardize the industry in terms of cost basis for ads we’re buying, but we have no information on consumption,” Krystina Rubino, head of offline marketing at performance marketing agency Right Side Up, told Forrester. “I can tell if it’s delivered to you, but i can’t tell if you consumed it.”
The report also states that advertisers still buy based on content and program targeting. Ad-tech providers like Megaphone, and platforms such as Spotify and Pandora, have their own targeting tools. But most brands still have limitations when it comes to targeting audiences.
Programmatic in podcast advertising has one drawback: diminishing the power of ads read by hosts. “What makes podcast ads so effective—that connection the listener feels—only works if the ads sound like the podcast,” Brett Robinson, vp of ad operations at National Public Media, told Forrester. “It’s important to remember that listeners have a skip button.”
The report suggests a “programmanual” approach, in which advertisers conduct business via programmatic tools and billing while manually executing the creative, could be a solution but has yet to be tested within podcast advertising.
A majority of brands use between 5% and 10% of their performance marketing budgets for testing new channels, according to the report, which suggests marketers devote a part of the test budget to campaigns across multiple podcast episodes. This method would give marketers enough time to see if the ads connect with consumers.
The report also states that advertisers new to the podcast space should invest in direct response campaigns, such as giving listeners promo codes that will direct them to a brand’s website, to allow for more specific attribution. Robinson suggested marketers should invest in attribution technology providers such as Podsights or Chartable to help with attribution needs.
“They match listeners who downloaded the podcast ad against people who went on the brand’s website,” Robinson told Forrester. “You get the podcast version of a clickthrough rate in display—and publishers are seeing average conversion rates of over 1% of exposed users going to the brand’s website.”
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