B2B Tunes into the New Podcast Advertising Age - Rhea Kaiser

Podcast advertising is evolving—fast. Here’s how to evolve your B2B marketing plan right along with it

We are a podcast nation. You’ll be hard pressed to find a friend or neighbor who isn’t touting the latest podcast they’ve tuned into. Among farmers, more than one third say they listen to ag-related podcasts, and nearly one quarter listen to podcasts on topics outside of agriculture, according to the 2020 media usage study from Successful Farming.

Not surprisingly, podcast advertising has grown rapidly in the past several years, keeping pace with the medium’s increasing allure. In fact, it is projected to exceed an impressive $1B in U.S. ad sales by the end of 2021.

Historically, podcast advertising to B2B audiences hasn’t been high on marketing priority lists because of the non-targeted, national reach of most podcast shows. However, the advent of new, precise targeting options over the past year – most notably, programmatic options for serving audio files – has changed all that.

Podcast appeal goes viral
With podcast consumption growing exponentially, podcasts have now emerged as a significant component of the mainstream media landscape. According to a 2020 survey, 37% of U.S. adults have listened to a podcast within the last month; that figure was only 11% in 2010. What’s more, podcast ad spending has grown from $43MM in 2010 to more than $500MM in 2020, and, as mentioned, it’s expected to exceed $1B in 2021. Fourteen percent of podcast ad spending is, in fact, now in the B2B category.

Podcast targeting is evolving
Traditionally, podcast advertising has been dominated by national consumer brands trying to reach a desirable demographic of listeners that skewed younger, affluent, educated and tech savvy. Early podcast ads were often sponsorship messages read by show hosts and had a native feel—referred to as Baked-In advertising because the ad spot is permanently embedded within the podcast.

As podcast audiences grew larger and more diverse, a second type of podcast audio advertising emerged: Dynamic Insertion. These audio ads can be served programmatically based on the geographic, demographic and psychographic characteristics of each listener. In other words, not all listeners will hear the same ads when they download a podcast.

The inside scoop on Baked-In ads
Baked-In ads come at a premium CPM and typically start at 2-3x the cost of a pre-recorded dynamic insertion ad.

Three different ad positions are available within a podcast:

1. Pre-Roll (15-60 seconds): These spots run before the episode starts, or within the first few minutes. Pre-rolls can sometimes be skipped over, so they’re typically priced slightly lower than mid-roll spots.
2. Mid-Roll (30-90 seconds): These ads run halfway through an episode and are usually a little longer and more in-depth than the other placements. Listeners tend to be most engaged at the midpoint of an episode, so these units are the most expensive.
3. Post-Roll (15-30 seconds): Post Roll spots run within the last few minutes of an episode or directly after the close of the podcast. These placements are typically shorter in length and priced the lowest since listener engagement typically declines throughout an episode.

Podcast publishers and podcasting networks sell this ad inventory directly to advertisers based (mostly) on impressions with a CPM cost structure. Publisher-reported audience numbers are the only reporting available.

Dynamic Insertion reaches audience niches
For B2B, programmatically serving pre-recorded, dynamic insertion audio files to podcast listeners is the most effective approach, ensuring ads are served to the right audience.

For example, an agricultural advertiser can set up a podcast ad campaign targeting Midwest corn growers with 500+ acres. Their ad will be served to that audience on whatever podcast they choose to download (a news, sports or finance podcast, for instance). This approach uses audience-based targeting and doesn’t depend on podcast content type. The individual listener is the focus.

This audio ad inventory is now sold through most major programmatic vendors on a CPM basis.

Because the buy is audience based, there isn’t a specific show schedule and advertisers can define the length of the campaign. When an ad is dynamically inserted for a specific user who downloads a podcast, the ad is then embedded in that file. Campaign reporting is limited to information on ads served through streamed or downloaded podcasts.

The good and the bad of podcasts
Given that podcast audiences are growing, and advertising opportunities are improving, how should B2B marketers approach podcasting? And how does podcast advertising fit into a vast landscape of media options?

To start, you absolutely need to understand the current benefits and limitations of podcasts as an advertising option.

Four big podcast benefits include,

1. It’s a rapidly growing advertising format.
2. Engagement is generally high; listeners make an active choice to subscribe, download and listen to podcasts when it’s most convenient for them.
3. It offers a captive audience of sorts, with listeners often consuming podcast content during long drives or workouts. (Farmers increasingly listen while spending long hours in the cab during planting or harvesting.)
4. It’s a unique digital format, allowing advertisers to reach people with a targeted digital message even when they’re not online.

And two notable limitations include,

1. Most ads are measured by audio completion rates (which are typically 90% or higher, since most ads aren’t skippable). Site engagements are difficult to attribute to podcasts. Easy-to-remember vanity URLs or promo codes can be used within audio files, but listeners may be just as likely to show up on a site later as organic traffic.
2. While audiences are growing rapidly, scale can still be a challenge for reaching highly niche audiences.

So, what’s our best recommendation for B2B advertisers? Slowly integrate podcasting into your overall paid digital media mix. The growth of this format and recent improvements in targeting at competitive CPMs make it an increasingly attractive option for reaching niche audiences. And while measuring success can be elusive, you can start with a limited test budget and include a trackable vanity URL or promo code to ensure your podcast ads have enough impact to justify the investment.

R+K’s resident expert Chris Yuzeitis, Supervisor, Paid Media, contributed to this post. If maximizing the impact of your podcast advertising is high on your marketing agenda, contact Gino Tomaro, R+K Business Development Director, at gtomaro@rkconnect.com to start the podcast conversation.