Podcasting's "Ad Bargain"

lets make a deal

This week we put out a new study called Super Listeners 2020, which was our second annual installment in this survey of podcasting’s best customers. I’m grateful to Ad Results Media and PodcastOne for sponsoring this work, because I think it’s important for the industry. I know how that sounds. But honestly, what I love about my job is that I get to think about, and help to answer, some of the biggest existential questions podcasting faces, and this study absolutely tackles one of those questions head on: are we ruining podcasting with ads?

The answer, clearly, is “not yet.” We certainly are capable of it. If you can sell 4 spots for $x, and someone will offer you that $x for a fifth spot, it can be hard to say no. At some point, that 5th spot becomes 18, and you have truly boiled your frog. The entire goal of the Super Listeners series is to take the hopefully-less-than-boiling temperature of podcasting’s best customers (who, by dint of listening to more content than anyone, have also heard more ads than anyone) to gauge potential warning signs—the red flags that indicate the delicate transactional balance of attention-for-content has tipped the wrong way.

The good news for advertising-supported content: we haven’t ruined podcasts yet. Super Listeners (who listen to more than five hours of podcast content per week) are still extremely positive about ads in podcasts, and if anything their positive sentiment towards the brands that support their favorite shows has increased, not decreased. But there are at least a few yellow flags. The percentage of Super Listeners who think there are too many ads in podcasts is still much lower than those who feel the same about other media—but that percentage did go up a lot from last year (from 24% to 38% who agree with that sentiment.)

There were also year-over-year increases in the percentage who agree that there are more ads in podcasts than there were a year ago, and also that ad breaks had gotten longer. While I would not call these “red flags,” given the otherwise positive sentiment towards ad support evident throughout the study, they are at least “caution flags.”

I firmly believe that people don’t complain about ads simply because they are ads. People complain about crappy ads. After all, legions of Americans watch the Super Bowl at least in part to see the ads, right? One thing I would like to point out from the study, though—while Super Listeners feel more positive about host-read ads than pre-recorded spots, the difference isn’t exponential. Pre-recorded ads aren’t universally rejected anymore than host-read ads are universally beloved. The truth is, any ad can be great or terrible in the moment. Execution is everything. I am sure we have all heard excruciatingly bad commercials from screaming local car dealers on AM/FM radio, but I am here to tell you that a podcast host sleepwalking though a rambling, three-minute monologue on a product they clearly don’t use isn’t any better. In some ways, it’s worse.

Ultimately, though, the encouraging news from Super Listeners 2020 is this: the “ad bargain” is still in place, and both parties seem to be honoring that bargain. It seems hard to conceive, but it wasn’t that long ago that almost all content was subject to this bargain—we give you free content that you enjoy, and you give us a few minutes of your attention for the benefit of our sponsors. This worked for years, until a fundamental human behavior changed—we started, en masse, to be willing to pay for content. Once we all started subscribing to Netflix and Spotify and Disney+ and the New York Times, our brains rewired a bit. We demanded more control over our content. Listening and watching to media supported solely by the “ad bargain” declined. You wouldn’t be crazy to think the ad bargain was irrevocably shattered—that humans now have so much control over their content that the exchange of attention-for-content would no longer work.

Turns out, it still works—in podcasting (and in streaming audio, which is similarly ad-spartan.) And it will keep working, until it doesn’t. As long as content providers and advertisers acknowledge their side of the bargain by limiting the number of ads, and really limiting the number of terrible ads (host-read or not), listeners are willing to trade attention for content. Our study shows that ad-skipping behavior in podcast listening isn’t growing—it’s the same as it was a year ago. If we respect our listeners’ ears, most of them are happy to honor the ad bargain.

Speaking of the ad bargain, I had an interview this week with a journalist who wanted my take on this thesis—that podcasting was having difficulty monetizing because the various means of distribution make it difficult to measure the medium’s audience. I don’t know how much of what I said to him will make it into print, so let me just say this here: Radio and linear Television seem to be able to extract billions of dollars of advertising based upon estimates from small samples of ratings-keepers. Why should podcasting, which has all of those survey-based methods of determining audience demographics available to it (our Podcast Consumer Tracker does this for all leading networks) PLUS server-based data, and client/player data from entities like Apple and Spotify, be perceived as having limited metrics?

The truth is, podcasting throws off more (and more accurate) metrics than either TV or Radio, two channels that ad buyers happily spend money on to buy that most nebulous of concepts, the “gross ratings point.” If anything is holding back podcasting from claiming its rightful share of advertising revenue, it isn’t metrics—it’s resistance to change.

Quick plug: next week I am cohosting a fun webinar with my colleague Laura Ivey called “Edison’s 10 for ‘20.” Over the course of the past year we have accumulated many fascinating findings about not only podcasting, but also other forms of media, the economy, politics, and more. We’ve tapped into the talents of a bunch of Edisonians to each share a data point they found fascinating, while Laura and I will do our best Regis and Kathy Lee/Ripa and Strahan/definitely not Matt and Katie as hosts to tie it all together. Register for this free, fun session here: https://www.edisonresearch.com/edison-researchs-10-for-20-webinar-save-the-date/

What I am watching: The Flight Attendant on HBO. It has strains of Lost—a puzzle box, solved bit by bit though flashbacks—but it also makes me completely nervous and unhinged in the same way that “Uncut Gems” did. Kaley Cuoco is marvelous and giving me such agita. HOW CAN SHE BE SO MESSED UP. I am not that messed up. Neither are you. So if you need to feel better about yourself, The Flight Attendant will suit.

What I am drinking: We recently discovered Lyre’s non-alcoholic spirits, and have been making all kinds of faux Manhattans and Negronis and Boulevardiers. Like Don Imus used to say about Buckler Non-Alcoholic Beer—You’ll Pee Just As Much, Just Not In A Phone Booth.

Have a great weekend—if you liked what you read here, be sure and subscribe (if you haven’t already) and I’d love it if you shared this with friends who might find it valuable. Also, I am having a blast with my Spotify Premium music show, Deep Six, so check that out if you miss what FM radio jocks sounded like in the ‘70s, but without the drug thing.


Photo credit: Froggydarb - english wikipedia, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=858891