Lack of measurement has long deterred brands from investing heavily in podcasts.
Apple, which has dominated podcast listening in the United States for years, has a history of obscuring how many people actually heard an ad after downloading a podcast episode through its player.
That left brand advertisers to negotiate for CPMs without knowing whether their ads would be even be delivered on the majority of their podcast buys. Apple accounts for roughly 60% of all podcasting listening in the United States.
But as listening shifts to streaming on platforms such as Spotify, the ability to measure real-time listenership becomes possible across a broader swath of inventory.
“Streaming allows brands to get an idea of how many people are listening to an ad,” said Stephen Smyk, SVP of podcast and influencer marketing at the agency Veritone One. “The numbers more accurately reflect listenership.”
Even Apple is starting to get with the program. Although its iPhone player app doesn’t allow for streaming, over the past few years Apple has cleaned up its download process and begun sharing analytics with publishers, thereby improving measurement on its own platform.
But the dynamics that allow for real-time measurement have consequences for independent publishers as large networks and walled gardens gobble up podcast investments.
Shift to streaming
While the podcast ad industry still transacts on downloads, podcast listening is slowly but surely shifting to streaming.
Podcast ad platform Acast, which has an ad server and player app that reach 240 million monthly listeners, now sees more real-time streaming than downloading on its network, said Brian Danzis, managing director for the Americas.
“It’s been happening slowly over the last year or two,” he said, “and the increase has been steady for the past few quarters.”
As more people around the world adopt streaming platforms, such as Spotify as their primary podcast listening app, real-time streaming will only continue to grow, and, with that, so will the need for real-time measurement.
Spotify launched Streaming Ad Insertion (SAI) at CES in January, which allows brands to dynamically serve and measure ads within podcast streams in real-time. Although SAI is only available today for Spotify originals, it’s a step up from before when ads were stitched into podcast episodes prior to download and real-time targeting and analytics were impossible. (Plus, Spotify’s stable of original content is growing fast. See: Joe Rogan and The Ringer.)
“Streaming services are going to provide more information on when people listen,” said Marshall Williams, partner and CEO at podcast agency Ad Results Media. “They can quantify an actual ad delivery because it’s a one-to-one connection.”
Podcast ad tech is also getting more sophisticated in offering the targeting and measurement increasingly required by large brands. Both Acast and podcast ad platform Megaphone work with Nielsen to target audiences and measure brand metrics such as awareness and intent.
“If you can’t measure the actual outcomes that matter for big bands, then none of it matters,” said Acast’s Danzis.
But many people are still downloading podcasts rather than streaming them, especially in the United States, where Apple controls more than half of listening.
In a nod to that behavior, and as part of a recent software updates, Apple stopped auto-downloading podcast episodes for shows that listeners subscribe to and began serving progressive downloads, a process by which a podcast is delivered in chunks while a person is listening, rather than being downloaded all at once.
“It’s really just a gradual download that acts like a stream,” Veritone One’s Smyk said. “A significant bulk of downloads we’re counting now are progressive downloads and streams.”
Using Apple’s analytics tool, podcast publishers now have a better sense of how many people are listening and whether they heard an ad.
But cross-platform measurement will still be a challenge, because advertisers will have to stitch together analytics from multiple player apps.
“Streaming is going to give more insight into what is happening in your show, but it will create complications where you’re stitching together reporting,” Smyk said.
The cost of real time
Real-time podcast advertising, however, comes at a cost to independent podcasters.
As more listening shifts to streaming platforms that have the money to pump out original and exclusive content, more advertiser money will concentrate behind walled gardens or with major networks that can provide better targeting and measurement.
That leaves independent podcast publishers, once the backbone of the industry, to duke it out for ad dollars against larger players that have more resources to promote their shows. Already, Omnicom has committed a $20 million upfront buy exclusively to Spotify as the platform flexes its exclusive content and measurement muscles.
“Big networks and companies that use ad-serving platforms can now provide better data,” Smyk said. “Where it starts to get hard is for folks who are smaller, independent and don’t have resources or an ad sales force.”
On the flip side, the more awareness big platforms and networks bring to the space, the more ad dollars they can attract overall, Ad Results Media’s Williams said. Podcast advertising is set to reach $1 billion this year, per the IAB, as the space heats up and continues to consolidate.
And not all independent podcasters are being left out to dry. Those that can afford it are gaining more exposure through dynamic ad servers, including Acast, which is integrated with every major DSP and trading desk.
“That gives smaller podcasters the opportunity to put their inventory in front of the world’s biggest agencies and brands,” Danzis said.