Is Your Podcast Worth 22 Bucks? to smell f'ing fabulous

This week iHeart bought Triton Digital and added the missing advertising-tech piece to their suite of podcast offerings. Nick Quah pointed out in Hot Pod that this solidifies a true “big three” in terms of podcast advertising companies: iHeart, Spotify, and Liberty Media. All have built out complete streaming and on-demand audio platforms with their own little bonuses: iHeart, their terrestrial radio reach; Liberty, their satellite network and world-class sales organization; and Spotify with enhanced data and, well, the WHOLE GLOBE.

It’s worth a brief tip of the cap here to E.W. Scripps, who bought Stitcher for $4.5 million, Midroll for $50 million, and Triton for $150 million—and then flipped all three for over $550 million. That’s at least a 250% return on investment for a few properties they held on to for just a couple of years. If there’s a Scripps Brothers property flipping show (FLIPP THE SCRIPPS?) on HGTV this fall, I’m TiVo-ing every episode. I believe they will be plowing the profits directly into their spelling bee, as there was an entire division of words that were laid off during the 2008 mortgage crisis that are champing at the bit to get back into play. Words like “champing.”

I want to take a moment to answer what is of course the biggest question remaining from the Triton acquisition. Our annual Infinite Dial study, which we conduct in partnership with Triton Digital, is completely unaffected by this purchase. It will go on as planned, on March 11th, and I’ll be virtually side-by-side with Triton’s John Rosso for the usual bevy of stats n’ jokes. Edison Research started the Infinite Dial way back in 1998—back then it was sponsored by Arbitron. I still remember the day she was born, swaddled in MS-Paint clip-art and Lotus Freelance (sniff.) But she’s not a kid anymore. She’s about to turn 24. She’s out of college, started a real job, and just got her first place on her own in the city. She’s gonna make it after all.

I’m not going to speculate on the various paths of the “big three” in this space. It’s hard enough to accurately describe the present day, which is my actual job. But I do want to point out that these three companies are not The Only Three or even The Comparatively Big Even In The Universe Of Google Three. They have integrated content and advertising solutions, but not monopolies on either—hello, NPR, and others. But for the sake of this newsletter, let’s just call them Three Platforms For Advertising At Scale In Audio.

I want to revisit something I’ve said in various fora throughout the years: there is no “halo” granted to an advertiser merely by the fact that they are advertising on a podcast. The data simply doesn’t support that. The medium doesn’t grant the halo. The relationship between host(s) and listener grants the halo. A screaming local car commercial on Power 105.1 doesn’t suddenly gain magical wings by airing in The Breakfast Club podcast—you just heard it on-demand instead of live. One of the things I remember from my least favorite class when I got my MBA (accounting) is the concept of “Goodwill.” If I combined wax, fragrance, and a wick and sold “Tom Webster Candles,” I might be able to sell them for a dollar. Give roughly those same materials to Tom Ford, and you get this, currently available at Saks for $132. Once you account for the “book value” of the candle (and surely I use cheaper ingredients, so the difference isn’t $131, if that’s where your brain went), the difference between what Tom Ford gets and what I get is, essentially, “Goodwill.”

Ok, I am exaggerating a little. Also, Tom Ford’s Tuscan Leather is worth whatever he wants to charge for it. But Tom Ford’s ability to charge $132 for a candle is directly related to what Tom Ford has built through sweat equity (which I believe he also bottles and sells) and the relationship he has built with his customer base. My wife, Tamsen, is fanatically loyal to Diane Von Furstenberg. Are the dresses high quality? Of course. But of more value to her is the fact that she trusts DVF. She doesn’t have to second-guess this purchase in a universe in which we are always second-guessing our purchases. A $500 DVF dress can be made, top-quality silk and all, for under $50. The extra $450 is trust, confidence, style, and timeliness. These are the things Diane Von Furstenberg has put into her dresses, and why her name on them means a thing.

Your name on something means a thing, too. In podcasting, it can be the difference between a $25 CPM and a $3 CPM. Consolidation, scale, and ad-tech is making the latter option profitable for some types of advertising. But that doesn’t mean the former option is headed for extinction. That $22 difference is the secret sauce: your ability to build a relationship with your listeners, engender trust, aspiration, and yes, goodwill—and to transfer those to an advertiser. I am a firm believer that the one true way to build fanatically loyal listeners is to be fanatically loyal to your listeners. And this brings me to yet another Diverting But Spicy Hot Clubhouse Take.

I don’t love Clubhouse in its current iteration, as I’ve written about at length. But the category is interesting to me, and when Twitter Spaces and Facebook’s impending entrant into the social audio space arrive, then we will see the true power of superimposing your social graph and metadata with the power of voice. For now, I have a divided opinion about Clubhouse:

  • If you are a consumer/listener, Clubhouse isn’t actually that great, you’re just bored.

  • If you are a creator/podcaster, Clubhouse is a great way to get gooder.

I’ve heard any number of podcasters get enthusiastic about Clubhouse and speculate on ways to incorporate Clubhouse rooms into your podcasts. I don’t think recording a Clubhouse room makes for a particularly great podcast. But I do think hosting clubhouse rooms, separate from your podcast, is a great way to be a better podcaster. Your podcast is the mothership. Unlike the relationships and followers and data created on Clubhouse, your subscribers and listeners are an exportable asset. Building something on Clubhouse right now is exactly like building a sand castle at low tide. But if you build your podcast, as long as you control your feed, Clubhouse could shut down tomorrow and you have lost nothing. Clubhouse is not the place to build your thing. But Clubhouse is a handy place to build something else: chops, relationships, and empathy.

I’ve seen some podcasters use Clubhouse like an “after show.” Joseph Jaffe does this to great effect with his show Corona TV—there is a formal interview, followed by a Zoom (and now Clubhouse) after show that lets listeners connect with the guests. This is one way to do it. Let me humbly suggest another way: do the Clubhouse show well before the podcast. Yes, you could use the Clubhouse room to promote the upcoming show, but that’s a small benefit. You also get the chance to build your chops: practice interviewing the guest in a low-stakes setting (unrecorded) and fielding questions from an audience that will help you become a better interviewer by helping you become a better audience advocate. That’s the “chops” part.

The “relationship” part is also obvious. Many podcasters would love to find ways to make listeners feel like they are a part of the show. But plopping listeners onto your podcast when it hasn’t been built from the ground up in that fashion is a bit like when Lost plopped the “Others” camp on the island and integrated them with the “Originals.” It’s disruptive, the show’s throughline gets murky, and eventually Michael Emerson will kill you. But having another outlet like Clubhouse to connect with listeners is a crucial part of turning you from “voice on the other end of phone” into “friend on the other end of phone.” People don’t fire their friends. Better yet, friends recommend things to other friends, and this is part of the goodwill I was talking about.

I love boardgames. I also love sports. If Bill Simmons recommends a sports documentary to me, I’m watching it. If Tom Vasel recommends a board game, I’m playing it. If Bill Simmons recommends a board game to me…I’m probably going to watch sports instead. That doesn’t mean he doesn’t know anything about board games. It does mean that he hasn’t built the goodwill in that area that Tom Vasel has. This may all be obvious to you. But if you have any hopes to monetize your show, there are really only two things you can get better at. If you want to charge a $25 CPM, or support the show through Patreon, or any other means of direct or indirect monetization, your ability to do that is 100% based in how skilled you are at your craft, and the depth of the relationships you have built with your listeners. There is nothing else. Clubhouse and its ilk can help with the latter.

Which brings me to the third thing that social audio platforms can help with: empathy. I’ve mentioned the Chris Broganism of knowing which way the chairs face in this space before. Your podcast has an audience—the chairs face you. In Clubhouse you could do that, sure—but you already have a podcast. A Clubhouse room (or Twitter Space) is an environment to turn those chairs inward and get off stage for a bit. Audience interaction isn't just for them, and it isn’t just about building relationships so you can sell them more stuff. It’s also about leaving deeper footprints, as Scott Shannon once told me, which only happens when you can empathize with an audience.

I remember years ago hearing about John DeBella, a radio DJ who came to prominence on the morning show for Philadelphia’s WMMR. One day he took a call from a listener who mentioned that she was looking forward to speaking soon with her husband, a soldier deployed in the Middle East, but those calls had to be scheduled well ahead of time because there was only one laptop his platoon had to share. DeBella could have kept format, gone to another call, or maybe even introduced the new Aerosmith song. He didn’t do that. He stopped the line. From that moment on, that day, the show was all about getting people to call in and donate or buy laptops for this platoon. I don’t remember how many they finally raked in by the end of his shift, but DeBella turned the chairs around and created instant community around this one small, good thing. Good for John DeBella, Ratings Machine? Sure. But also good for John DeBella, Human Being. Empathy is the secret weapon for any podcaster. The transference of empathy—in both directions—is also a crucial part of goodwill.

Now do all of that all over again, except with the right advertisers, too. Media companies are no longer “gatekeepers” between advertisers and customers in the ways that they used to be, because a) there are no gates, and b) every company is now a media company. But you can make a quality introduction between an advertiser and a listener. Plopping a pre-recorded radio spot into the post roll of a podcast has some value, but it is pretty much the equivalent of BCC'ing the listener. OK, you’ve been made aware of the message, but it’s not clear if it was actually meant for you. But we’ve all had that feeling of being a part of a great introduction from someone—when the connector shines a light on what makes both “introducees” valuable to the world, and to each other. When someone says, “I think you two should connect—I see your value, and here is how you two could really help each other” you weren’t just BCC’d. This is the work of a great podcast.

Podcasts have enormous intrinsic value—and the more work podcasters put into creating goodwill, empathizing with listeners, and making those quality introductions, the more that goodwill can translate into not just higher CPM’s—but being worth something above and beyond reach. Podcasting’s most active listeners continue to tell us that at their best, podcasts are unparalleled at reaching them. Brand lift studies prove out that again, at their best, no other form of advertising can compete with the magical, intangible, and yet measurable blend of host, audience, and relevant message of a stellar podcast.

If ad tech and scale drive some CPM’s down to three bucks, you can’t do anything about that. You can only do something about your $22.

I’ll wrap all of this up by linking to another couple of thousand words I wrote this week, these on some new research we just put out about social media. Yes, every once in a while, they let me out of the podcast data dungeon to sniff other data, feel the warm sun on my face, and maybe even have a ice cream before I return to the audio data pits, pickaxe in hand, to mine more nuggets for your earballs. I hope you’ll read it, but the gist is that both liberals and conservatives agree that social media might not be very good for us.

I think podcasts are very good for us. Have a great weekend, and if you enjoyed this—please, subscribe and share!



Photo credits: A Red Deer Buck and a Doe, By George Stubbs - Royal Collection, Public Domain,

Mary Tyler Moore from CBS - ebay, PD-US,

Michael Emerson, by Thibault from Paris, France - CC BY-SA 2.0, If you looked at this final picture, prepare to be killed in your sleep by Ben Linus.