How Advertising Works In Podcasts

Video may have killed the radio star, but then the internet killed television. But is radio having a revival and taking over the Internet?

Maybe not as directly as DVDs killed VHSs, but internet radio and podcasts are rising in popularity, and as a result, more and more podcasts are seeing sponsorships come their way. Nielsen reports that 13 million homes identified as 'avid fans' of podcasts in 2016, but by fall of 2017, that number had surged to 16 million. Advertisers are becoming aware of these numbers and are beginning to see podcasts as a newer, niche way to reach specific audiences, as podcasts often have narrow focuses and attract very specific and segmented groups of people.

An example of a Nature Box advertisement during the

'My Brother, My Brother, and Me' Podcast

The way podcast sponsorships work is a cross between YouTube sponsorships and conventional radio ad spots. Typically, podcasters are approached by a brand and are given a script with some talking points, a link to refer listeners to, as well as an affiliate code that offers a discount to those who use it, and also lets the brand know that which sponsorships they are receiving an ROI from. Podcasters will then usually receive a small commission back from listeners who purchased with their code as well. Unlike radio spots, podcasters usually experience more freedom as far as how they deliver the sponsored message and they tend to be less scripted as a result, much like the example above. However, sometimes brands will pay extra to sponsor an entire episode and the whole episode can be done in a specific way that's consistent with the brand. The example below shows the 'My Brother, My Brother, and Me' podcast doing an 'ASMR' style podcast in homeage to their sponsor, Casper Mattresses.

Often, sponsorships for podcasts are companies notorious for sponsoring online content creators with affiliate coupon codes: Nature Box, MeUndies, Squarespace, Audible.com, Hello Fresh, and the list goes on. The trend is that these companies are often internet-based themselves, and therefore, target these internet-savvy audiences based on the specific interests advertisers know they have, as the listeners have a very specific interest in the subject of the podcast.

With our oversaturated, message-heavy world where, as I've mentioned in previous blogs, advertisers struggle to reach audiences due to adblocking, it has become more important to be able to creatively integrate advertising messages into the content that audiences seek out on their own, in non-obtrusive ways they don't mind. Nielsen conducted studies on podcast advertising, that revealed audiences tend to find products more favorable than when they hear the advertisements elsewhere, as they reported,

 "Respondents were asked to score their likelihood to purchase a product or service from a variety of advertisers. After hearing the ads during a podcast, the respondents were once again asked how likely they would be to purchase a product or service from a variety of advertisers. Forty-six ads were tested, and all five genres of podcasts delivered an increase in purchase intent. Mainstream podcasts in the comedy genre delivered +7.3% brand lift on average while more niche-oriented podcasts in the business category scored a +14% brand lift for a variety of advertisers."

What this means is that not only is it a way for advertisers to get around adblockers, but it is a way to automatically earn favorable attitudes towards brands, most likely due to balance theory. Podcast listeners obviously enjoy the podcast hosts, and because they're 'real people', listeners often feel more personal connections with them. If a podcast host endorses a product, it is logical to think that the podcast host would like the product. If the host likes the product, audiences are then likely to have positive attitudes towards the product as well. It is a much cheaper means of obtaining the same effect as celebrity endorsements, and given the way influencer marketing is taking over the industry, podcast advertising seems like a smart, creative path for the industry to start utilizing more as well.