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Big Podcasting seems almost designed to collect advertising
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dollars, with very little leftover for small to mid-sized podcasts.
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Rather than fighting for table scraps, maybe the narrative needs to be changed.
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Hello and welcome to another Podcast Pontifications with me, Evo Terra.
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Consolidation and acquisitions have become commonplace in podcasting
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since, well, honestly, since the beginning of podcasting.
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But the pace has picked up big time in the last three to four years.
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And with the looming recession, or the one that's already here, depending
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on your experience, you can expect that to accelerate as companies who
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are flushed with cash will swoop in and grab the overleveraged companies
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or media properties looking for upfront payments or revenue guarantees
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for these uncertain times ahead.
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In fact, just this week, we've seen Team Coco, Conan O'Brien's podcast production
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company, be acquired by SXM or Sirius XM.
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And WTF with Marc Maron has signed an agreement to let Acast handle
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his ad sales and distribution exclusively starting this summer.
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Both of those deals, one an acquisition and oh, let's call the other one a
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strategic partnership, probably went for eye-watering sums of money, betting
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on the fact that even more envious piles of cash will flow out the other
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end, further enriching the parties on, well, all of the parties involved.
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And that spells really good news for other shows that get tens or hundreds
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of millions of annual downloads and ad impressions to be sold against,
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but what if you're not in the millions of annual downloads range?
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What if you're just in the thousands?
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Which makes you more than a thousand times smaller than those really big shows.
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With the changing economic climate, will that mean more opportunities
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for you, too, to be acquired?
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Or will you get people sniffing around looking for a strategic partnership?
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Probably not.
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You see, those deals, you know already, they happen because those shows have
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huge audiences that can be monetized even more so than they are today and can
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also be grown to rake in even more cash.
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They're a fairly safe bet seen from that perspective.
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Better and more efficient ad buying, the network effect, more package
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deals and bundles that can, and often are, worth multiple millions
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of ad dollars on a single buy.
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It's a model that more and more big advertisers are turning to
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simply because, well, it's easy.
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Yeah, it's easy.
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Look at this from a buyer's perspective, an ad buyer's perspective, and
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not just any ad buyer, but a big spender in podcast advertising.
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Magellan AI tells us the top 15 advertisers are spending more than $1.3
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million each month in podcast advertising.
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Now, at an average of around $25 CPM, that's a lot of M's,
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about 52 million impressions.
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How many podcasts do you want to spread that around?
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I mean, the answer is as few as possible.
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Let's use a more modest ad spend for a moment, $500,000, roughly a third of
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what the top advertisers are spending.
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Now, as an ad buyer, who by the way, is also responsible, not just for
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vetting and placing those ads, but also tracking and reporting on the
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efficacy of the overall campaign spend.
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Do you want to spend your hundred thousand dollars this way, where you
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spend it 1000 at a time on 500 shows?
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No, that's way too much work.
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No, you'd rather take that 500,000 and spend 50,000 across 10 shows.
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Or maybe $100,000 on five shows because it's going to get you as much return and,
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really, it will, for half the effort.
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So why wouldn't you make it easier on yourself?
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Now, that's not good news for shows that have less than, let's do the
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math, 4 million monthly downloads, or a million downloads per episode.
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How can shows that are smaller than that compete?
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Now, not surprisingly, I have some suggestions for you.
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I recently read an article from Digiday that talked about the disconnect between
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scrappy podcasters who want to do something more creative than just run
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host-read or programmatic, pre-produced ad units on their podcast and then the
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ad buyers, who I just mentioned above.
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The bottom line, the ad buyers, at that level at least, aren't
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interested in creativity.
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They're interested in spending money as efficiently and effectively as they can.
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And of course, yes, sure, having a positive ROAS - return on ad
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spend - is important, or at least having data that their bosses
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can interpret as a positive ROAS.
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But creativity?
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For what?
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And that's where smaller shows, mid-level and below, can really shine.
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The big spenders may not care about ad creativity, but the
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smaller spenders sure might.
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But only if we, and by we I mean you, stop trying to sell ads on your
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smaller podcast the way that ads are bought and sold by the big players.
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That's almost always a losing proposition.
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So, instead of trying to justify why spending $500 worth of advertising
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on your show is worth some insanely high CPM of 50 to $200 or more, a
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fight you're going to lose nine times out of ten, reframe the conversation.
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Don't even talk about CPM.
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It's not worth it.
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And don't even offer to run ads as they're generally known.
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Ads, at least the way we think about them today with pre-rolls and mid-rolls
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and post-roles, dynamically inserted or host-read, those are all ads and
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you're automatically competing against other shows who can run ads way more
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effectively and efficiently than you can.
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Change the narrative by offering something different.
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Offer custom sponsorships that are unlike anything the potential ad
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buyer has heard before from podcasts.
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I'm talking about custom, highly creative deals that would be extremely cost
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prohibitive to convince a big show to run, but a smaller, more nimble show
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like yours could seriously lean into.
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How about a branded segment of your show?
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Three to five minutes of sponsored, but highly valuable, content that
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your audience will still love.
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No, no, no, not just a long host read.
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I know you've done that.
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Get creative.
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Turn your sponsor into a partner and craft a segment with them that
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really, really works on your show.
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Or what about a completely branded episode?
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Or maybe even a series of episodes that you produce in
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conjunction with the sponsor?
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No, not an infomercial.
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That's just an ad and then you're back into that trap once again.
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I'm talking about solid content that you can only make because of
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the involvement from that sponsor.
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That means more than just getting their money so you can afford to do something.
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Really working with them.
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Smaller companies are often looking for ways to outdo, but not
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outspend, their bigger competitors.
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They're used to being scrappy and are always looking for interesting ways to
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parlay their brand and their dollars into doing creative executions their
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big competitors don't have time for.
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Look, I think it's going to get tougher out there for the middle
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sized and smaller podcasts as more ad dollars will be reallocated to a
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smaller number of larger podcasts.
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So trying to get some of that just isn't worth your time.
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But, being creative and providing real value through clever
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partnering and sponsorships that only your show can deliver?
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That's something worth trying.
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With that, I shall be back next week with yet another Podcast Pontifications.
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Cheers!
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Podcast Pontifications is written and narrated by Evo Terra.
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He's on a mission to make podcasting better.
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Links to everything mentioned in today's episode are in the notes
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section of your podcast listening app.
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A written-to-be-read article based on today's episode is available at
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podcastpontifications.com where you'll also find a video version and a corrected
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transcript, both created by Allie Press.
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Podcast Pontifications is a production of Simpler Media.
