Podcast Advertising Profitable for Direct to Consumer Companies

Direct-to-consumer (DTC) companies are enjoying a significant amount of success in recent years, due in part to how consumers are moving away from traditional forms of linear entertainment.

Cord-cutters and others who turn to streaming and online sources of news or entertainment have opened up a number of potential advertising options for DTC brands. One such option that presents a significant opportunity for DTC companies is podcast advertising.

Podcasts do not always bring to mind the same sorts of opportunities as some other advertising opportunities, leading some brands to overlook them as a potential advertising platform. The truth, however, is that there is a massive market out there that brands can reach through podcast advertising.

Like any other market, it has its own risks and rewards for companies who choose this route to bring their brands to consumers.

Podcast growth

While podcasts have been available on a number of platforms for several years, they have only started coming into their own as a major force in entertainment within the last five years.

Currently, at least 62 million Americans listen to podcasts every week and a significantly larger number listen to them periodically. Given how popular specific podcasts have become and the rate at which platforms such as Apple and Spotify are embracing them, these figures are only going to grow in the coming years.

Even more important than the growth rates is the loyalty of the podcast community; not only do they embrace the content that they love, but surveys show that the majority of podcast listeners have no problems with advertising because they realize how important it is to support their preferred content.

Targeting podcasts

The explosion of popularity that podcasts have experienced combined with how readily listeners embrace advertising makes them a good target for a number of brands.

Most podcasts feature host-read advertising embedded into the broadcast itself, similar to how old radio advertising was done; this may also play a part in how readily ads are accepted because it features a little bit of cultural nostalgia that can make listeners more sympathetic toward the brands mentioned.

When targeting podcasts, advertisers should look for programs that resonate with a similar audience of the brand being promoted and develop a message that focuses on brand recognition and selling the “idea” of the brand. Plus, there are dynamically-inserted ad options available on some platforms that place ad content into the programs at the time of download.

Podcast advertising considerations

Because podcasts function differently than live radio or streaming audio services, there are a few things that advertisers need to keep in mind before committing to podcast advertising.

When advertising on podcasts, here are a few things to keep in mind:

• Keep offer timeframes in mind; podcasts are typically delivered as downloads that users can find at any time, so limited-time offers don’t translate well to the format
• Podcast advertising is best positioned at the top of your sales funnel, due in part to the nature of podcasts
• Audience demographic information can sometimes be limited, so it is not always possible to finely target advertising for podcast listeners
• Advanced scheduling of ads is sometimes necessary if you want your ads to go along with topics being discussed in specific episodes; depending on the podcast, this can require weeks or sometimes months of advance planning

It is, of course, important to remember that the platform and demand for podcasts are still growing. Some of the current issues experienced with podcasts may correct themselves over time; the lack of demographic information is already starting to correct itself due to Nielsen starting to offer podcast listener data sourced from user surveys.

As with any growing platform, there may be some risk and uncertainty in the early days but that can translate to significant success for those early adopters who jump on the podcast bandwagon.