How podcasting is shaping future advertising habits with Tom Webster

Speaker 1:

It doesn’t matter what kind of an agency you run, traditional, digital, media buying, web dev, PR, whatever your focus, you still need to run a profitable business. The Build A Better Agency podcast presented by White Label IQ, will show you how to make more money and keep more of what you make. Let us help you build an agency that is sustainable, scalable, and if you want down the road, sellable. Bringing his 25 plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McLellan.

Speaker 2:

Hey everybody. Drew McLellan here from Agency Management Institute. Welcome back to another episode of Build a Better Agency. Thanks for coming back. You are going to be glad you did. We have a great guest and a really fascinating topic today, and I will tell you about that in just a second. Just want to remind all of you, we have lots of workshops coming up. Not only do we have the Build a Better Agency Summit in May, which we hope you’ll join us in Chicago, but we also have the Advanced AE Bootcamp in late March. We have the regular bootcamp, AE Bootcamp in April.

We are repeating a workshop that was super popular with Carla Johnson called Rethink Innovation, where she teaches you a framework of how you can get everybody in your agency to be very innovative on behalf of the clients and the agency. It’s a great hands-on workshop. People loved it. And that’s going to be in early July and then later in July, we are back with Mercer Island Group who is going to be doing the Strategic Insights Workshop, which is responsible for over $100 million of new AGI in sales for agencies that have attended that workshop over the last couple years. So lots of huge results from that. And then we go right into the fall with the AE bootcamps. We’re actually going to do Money Matters in October this year. We’re going to do it in Denver rather than in Orlando. So that’s a shift for us. It’s a little earlier in the year than normal and in a different part of the country. So anyway, lots of workshops going on, all of them hopefully will sell out.

But if you’d like a seat at the table as it were, head over to agencymanagementinstitute.com and under How We Help Tab, you’ll see workshops and you just scroll in through those and you can cherry pick the ones that best fit you and your team. All right, we’d love to have you join us.

Okay, so let me tell you a little bit about our guest and the topic. So many of you are familiar with Tom Webster. Tom was a senior leader at Edison Research for many, many years and was really actually one of the first research companies and executives to really look at podcasting as a medium. And Tom has always been a huge advocator of audio content, and he’s always been a big fan of podcasts. And so a lot of his research and some of the things that he talked about at all kinds of different conferences, you’ve probably seen him speak somewhere and certainly you’ve seen him here on this show before around how we can take advantage of that medium.

So Tom has since left at Edison, and I’ll let him tell you a little bit about the new company that he and a partner have formed and what they’re up to. But they just released at March 22nd, I think is the release date. They just released a brand new study, which is fascinating from an advertising point of view on podcasts. So we’re going to dig into that data because I think it’s going to be very impactful for you, for your clients, and whether you’re a podcast host or whether you are just buying media for your clients, it’s super important data for you to have access to. So I’m elated that he was willing to come on the show and talk to us about it. So without any further ado, let’s get started. Tom, welcome back to the podcast. Glad to have you back.

Speaker 3:

Yeah, it’s exciting. Drew, I enjoyed my last stay here, so I’m looking forward to this chat.

Speaker 2:

So you’ve made some changes since you were last on the show. Why don’t you tell everybody about your new venture and what you’re up to?

Speaker 3:

I did last time I was on the show. I was SVP at Edison Research where I worked on a lot of things from media research to exit polling and brand research and all kinds of stuff like that. But I really wanted to focus on podcasting and audio, which is really my love, even though I come from a research background. So I partnered with Brian Barletta in a venture called Sounds Profitable. And what we have established is a research and advocacy firm, basically a practice, with over 130 partners currently in the podcasting space where we focus on promoting the space, making the space bigger, connecting people, and basically anything that we can do to get podcasting where it belongs in terms of its share of advertising and the monies, Drew, that are out there.

Speaker 2:

I love that. I love the monies part of podcast for sure. But it’s interesting. I mean, when you think about it’s still such a relatively new medium compared to it’s competitors and how quickly it has grown and become just part of a staple of people’s lives. It’s sort of remarkable.

Speaker 3:

Yeah, it’s come a long way in less than 20 years. I’ve been reading a book about the end of the Boomer generation called Aftermath, and there are some crazy stats in there about how few TVs there were in households in 1946 when the Boomer generation started, and then how many were in households at the end of the Boomer generation. But the thing about podcasting is you’ve always had the ability to get a podcast, you just listen to it through a browser or on an iPod, which for your younger listeners is an iPhone that doesn’t make calls or any way to consume audio basically. So right distribution is ramped up pretty quickly and I think it’s really established as a mainstream channel.

Speaker 2:

So you just completed a pretty big study.

Speaker 3:

We did. We wanted to do some focus on where the audience is right now, where the buyers are right now, and what the brand effects of three different media channels are with some basic kind of brand health measures. The study’s called The Media Moves the Message. And what we did was take a sample of 2,000 Americans, 18 plus, just waited to the census, so nothing was quoted there. And we exposed them to some questions about radio, AM/FM broadcast radio, linear broadcast television and podcasting and their receptivity and attention to ads.

But the heart of it was taking the top five brands by share of voice in each channel. So the top five share voice brands last year in radio, in TV, and in podcasting and going through some basic brand health measures, awareness, favorability, consideration. And did you take an action? And for each comparing people who don’t regularly watch TV to the people that do regularly watch TV for each of the TV brands, same for the radio, same for the podcast. And the goal here was we know that podcasting does really well in things like in general, do you support the brands that support your favorite podcasts? Those kinds of numbers have always looked good. We wanted to know why, and we also wanted to know what does that look like compared to linear TV and to broadcast radio? So that was the heart of it. It was a big study. Incredibly excited to roll it out.

Speaker 2:

So what were some of the takeaways that you thought were sort of most startling or noteworthy?

Speaker 3:

Well, the biggest takeaway for me is just how much the audiences of those three media channels have changed over the last 20 years. And I think if you haven’t looked at podcasting or haven’t looked at it in a while, I think there’s a temptation to think that the podcast audience is some smaller segment of the TV audience or it’s some smaller segment of the radio audience. And that was probably true 10 years ago. It’s not true now.

Speaker 2:

Or I think the other assumption is that I hear agency owners say, I didn’t jump in soon enough. There’s too many podcasts.

Speaker 3:

Which could not be further from the truth.

Speaker 2:

Right.

Speaker 3:

Yeah. Could not be further from the truth. What’s really happening, Drew, is that the audience, especially on the young end for podcasting, is pulling away completely from linear TV and fast radio. Those circles are pulling apart completely. And that the unique characteristics of the podcast audience, which is growing in reached significantly, are that A, they’re not getting a lot of advertising. Number one, because they’re checking out of linear radio and TV. But number two, they’re also the most likely Americans to subscribe to premium ad free television streaming to premium ad-free audio services.

Speaker 2:

Interesting.

Speaker 3:

So they are not saturated by ads and they’re much younger. And so they’re just, by virtue of their youth, they’re actually more receptive in some ways to advertising. I know agencies love the malleability. I’ve always hated that term. We’re hammering them into shape somehow. But it’s a different audience. It’s an audience that has not been super saturated and they are in fact more receptive to advertising because they’re not being clobbered with it in a lot of ways. So the audiences are different, is really the key finding from this. And then there’s some other brand effects too, which I’d love to unpack.

Speaker 2:

Yeah. So let’s talk a little bit just about the age thing for a minute. So when you say they’re a little younger, what do podcast listeners tend to skew agewise?

Speaker 3:

Well, here’s I think the jaw drop finding from this study for me, and it’s a two parter. The first is when you look at overall reach, what percentage of each demographic do these three media channels reach? The reach of podcasting is almost the same as radio and TV, 18 to 34. Now when you go up in demo 55 plus podcasting falls off quite a bit, but if you just look 18 to 34, it’s nearly there. That is sort of the entree to this next finding, which is the real jaw dropper. When you look at heavy users of all three media for podcasting, that’s five or more a week, five plus hours a week for radio, it’s 10, for TV it’s 20. When you look at heavy users of each of these three media, the mean age of the podcasting audience is a full generation younger than the mean radio and TV audiences. The radio and TV audience mean at the heavy users are rate at the very last Boomers, right? Like 58, 59, the very tail end of the Boomers.

Speaker 2:

Right, right.

Speaker 3:

Podcasting, it’s late 30s like squarely millennial.

Speaker 2:

Wow.

Speaker 3:

Yeah. Skipping gen Gen X entirely. Thank you very much. But a full generation different, and I’m not sure I’ve written a more jaw dropping headline in my research career than that.

Speaker 2:

So what do you think that means to us as agency owners and leaders? What’s the takeaway for us with that?

Speaker 3:

Well, that’s the other exciting part about this study because we did so much detailed work on 14 different brands, basically those, there’s some overlap. Progressive is a top five advertiser in all three channels, and that gave us some really interesting looks at the kind of crossmedia effects and even the additive effects. Podcasting is significantly better at mid and lower funnel brand metrics than radio or TV. And adding a podcast by two, some kind of a linear broadcast by is additive and not duplicative. And it has different results and different effects. There’s still a role for reach in radio and TV, but there’s also a role for reach in podcasting.

Speaker 2:

That’s right.

Speaker 3:

But it’s really at the mid and lower funnel impacts. And I’ll give you one stat, and this is one of the craziest stats in the whole report. We took a look at how TV viewers and not regular TV viewers, these brand metrics for the top five advertisers in TV. And then we looked at the difference between them. So you would expect in a lot of these measures that heavy users of TV would rate some of these things higher than non-regular users of TV. And for the most part they do. When you look at action, did you take an action, however that brand defined that action, right? Did you visit a website? Did you purchase the product? Et cetera. The difference on taking action between non TV viewers and regular and heavy TV viewers for the top five TV brands was 1%. 1%. That’s lower funnel. It’s a differential. In podcasting, same thing. Apples to apples, top five brands in podcasting by share voice, it’s 16%. Wow. So podcasting is enormously just better at-

Speaker 2:

Moving the needle.

Speaker 3:

And when you think about it, Drew, there are a lot of ways to get people’s attention for five seconds at a time, whether that’s looking at a display ad or something on YouTube before you skip out of it, right? There are very few ways to get people’s attention for 30 or 60 seconds at a time. And those are the three media that we studied.

Speaker 2:

Right.

Speaker 3:

Podcasting is just significantly better and reaches different people at those middle and lower funnel measures.

Speaker 2:

Well, and to your point, I mean if a lot of people have the ability to buy their way out of all of those ads in some of the mediums, but that’s not really a option on a podcast, you have a captive audience. For sure.

Speaker 3:

You do. And one of the things I think in the earlier, or I would say middle [inaudible 00:14:26] period of podcasting, whatever, it’s not that old people often talk about the engagement of a podcast, the intimacy, that connection between the earbuds. But honestly, it’s simpler than that. And the best example I think we have of that in this study is looking at the performance of two major insurance brands, progressive and Geico, who are both very heavy advertisers in all three media. I mean, Progressives top five in podcasting, Geico’s not far. And when we look at the measures of the TV audience, the radio audience and the podcast audience with the insurance brands, those two insurance brands in lower funnel measures actually perform worse on TV and radio. I mean even just between listeners and non listeners or viewers and non, that’s that sort of carpet bombing backlash I think that they get. But they perform much better in podcasting because, and here’s the thing, that’s not about intimacy and between the earbuds and engagement, because they’re running the same ads, they’re running the same radio [inaudible 00:15:33]

Speaker 2:

Oh, interesting. So about the receptiveness of the audience.

Speaker 3:

Exactly. They’re younger and they’re not getting saturated with ads like that. They’re not getting killed with Progressive and Geico ads because they’re not watching TV.

Speaker 2:

Or they’ve bought their way out of watching the ads. It’s interesting to think about, I’m envisioning everybody hearing about the study and advertisers going, “Okay, we’ve got to pull some of our budget and move over to podcasting.” So it’ll be interesting to see when you go back, because I know you will at some point in time, at what point do we break the very thing that’s working, which is that, do we saturate podcasts with so many ads that again, we do what we’ve done in television and radio.

Speaker 3:

Boy, I hope that’s not the case. And honestly, if I do nothing else in my last few trips around the career sun in podcasting, it will be to do what we can to prevent that. Because it is a special environment in a lot of ways. And that’s why, I mean commercial broadcast radio as in America ruined itself with spot load.

Speaker 2:

Right. No doubt.

Speaker 3:

So I think we have a pretty good example there. I think we already know to some extent. And then I’ve researched this, what pushing it looks like in podcasting. And I think with publishers and people who are really devoted to podcasting, I think the challenge is to show them that there’s value in Preproduced Creative, that there’s value in programmatic advertising, that it doesn’t have to be live host read MailChimp ads, that there’s room for everything, but that only works if we don’t saturate the environment with ads.

Speaker 2:

That’s right. Well it’ll be interesting to see too, I mean in most cases, most podcasts are a little more closely contained and controlled than TV station or radio station. So it’ll be interesting to see how podcasters themselves choose to regulate that a little bit.

Speaker 3:

And I think most people have their heart in the right place and we have the advantage of podcasting, having the warmth and the engagement of an analog medium, but a whole lot of digital metadata and controls, and especially in programmatic, I think when podcasting gets better at programmatic, people fear it in podcasting, I think they misperceive that it’s going to flood podcasting with remnant ads for gold and stuff like that. But anybody listening to this podcast right now has bought something on Facebook because Facebook ads got really, really good and they got really good because of that targeting and that metadata. And we have access to that in podcasting.

Speaker 2:

Well, I mean that’s sort of the beauty of podcasting is that most podcasts are very narrow in their focus and so it is easier to understand who the audience is and what they might be interested in or not.

Speaker 3:

Yeah, I mean I know Adam Carolla is a sort of big legacy podcaster, one of the first big podcasts. He also has a show devoted to cars CarCast I think. And if you’re somebody like Castroil or somebody like that, you don’t need to have a whole lot of, you don’t need a cookie to know that that’s a good show for you to be on.

Speaker 2:

That’s right. Yeah. So what else about the study surprised you?

Speaker 3:

Well, I think the age thing was certainly a big part of it. The other thing that we looked at were, you we looked at the top five brands by Share Voice in podcasting as well. And that was a really interesting mix because two of them were Progressive and McDonald’s, which are fairly ubiquitous advertisers, two of them were Athletic Greens and Better Help. Better Help was the top advertiser in podcasts.

Speaker 2:

Well that’s interesting.

Speaker 3:

And honestly, they will keep spending because every dollar they spend brings them many more dollars basically. And they just keep ramping that up and what they have been able to achieve, I’ve talked about mid and lower funnel, they’ve actually been able to achieve reach and awareness gains that are significant cause they have saturated the space. And I think it should be apparent to anybody listening to your show, Drew, that’s bought media, it’s a lot cheaper to dominate, share of voice in podcasting than it is radio and TV.

Speaker 2:

Yeah, no doubt.

Speaker 3:

So you actually can make significant gains even in awareness with a significant buy. And it’s getting a lot easier to buy reach in podcasting to buy scale in podcasting.

Speaker 2:

So I’m curious how, I mean, a lot of the people listening not only on agencies are leaders and agencies, but they also have a podcast or they have clients that have a podcast. So from the flip side of this, how do you believe podcasters should look at this data and behave differently Or the same? What do you think it means for the folks who are hosting or own a podcast?

Speaker 3:

Yeah, I touched on this a little bit. I think a lot of podcasters or as we like to call ourselves, Drew, content creators.

Speaker 2:

Yes, that’s right.

Speaker 3:

Believe that podcasting is this kind of special snowflake and there’s a lot of resistance with creators to programmatic. There’s a lot of resistance with creators to using Preproduced broadcast ads and things like that. And I will tell you two things. Number one, those things are not as good as host read ads. I’ve done that research. There’s a study that we put out that sounds profitable last year called After These Messages where we examined the three different creative executions of the same ad. It was an ad for Athletic Greens actually on the Jordan Carpenter show. We looked at host read ad lib, host read scripted, and then announcer read scripted. And A, the announcer read did the host read, of course did a little bit better, which sure, that’s what I told you. But the announcer read did phenomenally well. It just did a little bit below it. And I think if you’re a podcaster, it’s to trust your audience and trust that your content is good. And if someone stops listening to your podcast because of an ad, right, because they heard a Geico ad or something like that, then I would suggest your podcast is not that good.

Speaker 2:

Right. Right.

Speaker 3:

People don’t do that on YouTube, right? They don’t do that. It’s not about the ads. So again, as long as we don’t saturate the audience with ads, if your content is good, they’re going to be forgiving of multiple ways that you support your show.

Speaker 2:

Yeah, that’s interesting to think about that because I think a lot of podcasters are very protective of their audience and don’t want to sort of rock that boat. So your point is well taken. And I think most people who podcast, they do it for financial reasons, but in the past anyway, having a podcast and selling ads on, it wasn’t the way you were going to pay your mortgage. I mean, unless you were one of the top folks doing podcasts. But for most people listening to this show, the podcast is a biz dev tool. And so if they make money on it too, that would’ve been gravy. But what you’re saying is there are opportunities for it to self-fund and be a revenue stream as well as a biz dev stream.

Speaker 3:

There are, but do you want some real talk?

Speaker 2:

Yeah.

Speaker 3:

Let’s have some real, most podcasts aren’t very good. And everything that I’ve talked about and everything that you just said about the podcast that make a lot of money in advertising are good. And most kind of biz dev style podcasts are not terribly entertaining. People do them because they feel like they want to do them, but they’re not necessarily audience driven. They’re not necessarily solving an audience problem that the audience would agree that they have in a compelling fashion. So there’s a lot of blame placed on advertising and the commercialization of podcasting and things like that. But the truth is, people don’t quit compelling content. People will listen to your show if it’s entertaining. And ultimately, if you’re a podcaster, whether you’re an agency podcaster or brand podcaster or somebody providing professional services, if you have not produced an entertainment, if you have not produced a show, then you have no right to an audience.

Speaker 2:

Yeah, very true. Very, very true. Okay. The audience is an elusive thing. All right. So going back to the data, so let’s flip it around also as agency folks, what does this mean? What is this saying to us about our radio and TV buyers, do you think in the grand scheme of multimedia and mixed channels and all that sort of thing?

Speaker 3:

Yeah, I think what I would hope people would take away from this, if you’re a buyer, a media planner, I think podcasting deserves some of those dollars. But I’m not suggesting that podcasting replace radio or TV, although 18 to 34, you might think about how you’re going to reach 18 to 34s because they are rapidly leaving both of those media. But there’s some data in here and on a few of the slides about the additive impact of podcasting on a media buy. The one thing I can tell you about podcasting in terms of its share of listening overall versus its share of advertising dollars is that it continues to punch way below its weight. We’re now spending about, America spends about 12% of its audio time listening to podcasts. And I guarantee you that podcasts are not pulling 12% of audio advertising. They’re just not.

Speaker 2:

That’s for sure.

Speaker 3:

So number one, it should. But in terms of a radio or television buy, radio and TV I think are still very important for reach. But podcasting is so much more effective at middle and lower funnel measures that adding podcasting to a buy and maybe sequencing it so that the linear broadcast comes out first, and then you follow that up with deeper levels of engagement and podcasting. I think that completes the circle really, really well. My suspicion is that there are a lot of people on the buy side and at agencies that have thought about podcasting in a certain way for some time. It’s just different now. It’s just different now. And it’s such a great opportunity. It’s so unsaturated, it does different things that are additive to a broadcast by that it’s worth carving out some of that budget.

Speaker 2:

So I want to take a quick break and then when we come back, I want to talk about what the study told you about perhaps what advertising on podcasts isn’t good for or doesn’t perform as well. So we’ll jump into that when we come back.

Hey everybody, I promise and would keep you more than a minute, but I want to make sure that at AMI, one of the things that we offer are virtual peer groups. So think of it as a Vistage group or an EO group Only everybody around the table, figuratively in this case, is an agency owner. So you have to be an agency owner to belong. The virtual peer groups meet every month for 90 minutes on Zoom. This was not a COVID creation, it was pre COVID. You see the same people in your cohort every time. So you get to create relationships with them. And it is facilitated by AMI staffer Craig Barnes, who has owned his own agency for 25 or 30 years. So plenty of great experience both from Craig, but also learning from each other. So if you have any interest in learning more about how that works, head over to the AMI website and under memberships you will find the virtual peer group and you can get all the information there. All right. Okay, let’s get back to the show.

All right. We are back with Tom Webster. We’re talking about a study that they just completed that is called The Media Moves the Message, and talking about how podcast advertising is comparing to radio and television advertising. And so before the break, what I asked you, Tom, was okay, so we’ve talked the first half of the show all about all the ways that podcast advertising or advertising on a podcast can be a potent solution for an advertiser. What’s it not great for?

Speaker 3:

Well, a couple of things. First of all, the overall reach of podcasting compared to radio and TV, still about half. And it over performs 18 to 34. But you do that math. And here’s the second thing it’s not particularly good at yet, and that’s reaching 55 plus. As strong as radio and TV are 55 plus, podcasting has really not broken into that yet. And I think a lot of that, it’s incumbent upon podcasters, it’s in it’s incumbent upon the creators themselves to think beyond just making shows about how to spend your retirement income. That’s not what it’s about, right? Again, it’s about creating an entertainment for a thriving segment of humans in America. And some of that is ageism, I think, with creators and networks and producers. Some of that is just that 55 plus have not been given a reason to go to podcasts that’s compelling. That gives them something that they don’t already have access to. That’s one of their perceptions. I think I’ve researched this, that doesn’t give me anything. I can’t already get in radio, TV or the internet. We did not look at digital at other digital media at all in this study. We compared one on demand medium broadcasting to two linear broadcast media. But I think reaching older Americans and just a reach by in general, if you’re looking for 18 plus reach, it’s not quite there.

Speaker 2:

But are there indicators, do you mean other than obviously the audience will age and take its media consumption habits with them? Are there other things that suggest to you that is coming sooner than the audience aging?

Speaker 3:

Well, I can’t talk a lot about this, but I can tell you that Brian and I at Sounds Profitable, we’ve been talking to a lot of people in Hollywood and talking to production companies in TV that are producing very broad concept mass appeal content, and podcasting has not really gotten that to date. A lot of podcasting is high brow to middle brow. And the thing about the most successful media properties in America, I think the podcast creator of five years ago would turn their nose up at something like The Bachelor. But let me tell you about The Bachelor. You’re not going to find a better produced show. And middle America, mainstream America, they may have a different taste from you, but they do not have low standards. In fact, their standards are highest. They only will watch the highest quality, best produced stuff. It might be broad concept, it might be about the Bachelor, but I will tell you it’s well done. And that kind of content is I think the next phase in podcasting to bring people into the fold that when they say there’s nothing there that I don’t already have or can’t already get, maybe we should believe them and maybe we should start creating some of that content.

Speaker 2:

I can’t help but think about the old days of radio and all the old radio shows that my grandparents and parents listened to and wondering if podcasting will go down that path. And purely for entertainment’s sake, almost just revitalize that genre of entertainment.

Speaker 3:

I hope so in a lot of ways. I mean, think audio fiction continues to grow a lot in podcasting. I think it underperformed for many years, although people are audio fiction, fans are incredibly passionate about it. But I also know the size of the audiobook market in this country. There’s no difference between a fiction podcast and an audiobook in content. But there are, the two key differences are that audiobooks to date have not been brought to you by Blue Apron. So that’s going to change. But also I think for audio fiction, there is a relationship with the creators themselves that an audiobook does not necessarily have the audience for audio fiction. I support some audio fiction podcast creators on Patreon and things like that. I feel like I know them. I probably don’t. Probably horrible people, Drew, and I’ve been fooled, right. But I feel like I know them and support them, which you don’t necessarily have with an audiobook, but humans love stories.

Speaker 2:

And great storytellers.

Speaker 3:

Yeah. And great storytellers. Yeah.

Speaker 2:

Yeah. That’s interesting. I think about some of the, I watched some fiction authors trying to create relationships with their readers with Facebook pages and newsletters and all of that. And would it be very interesting to create the intimacy of a podcast with an author where they’re talking about their book or reading their book or whatever? It lends itself to that, right.

Speaker 3:

I think so. Yeah. There’s a noted fantasy writer named Brandon Sanderson who has sold crap ton of books through traditional publishing, but he’s also done a very good job maintaining his own email list and maintaining his own relationship outside of the publisher. And then one day Brandon Sanderson shows up on Kickstarter saying, Hey, I’ve got five books already written. Help me get him out there. Five books. And his books are like thousand pages or whatever. And that Kickstarter went absolutely nuts. And so he flipped the switch overnight from needing a traditional publisher to not needing anybody. And that’s the difference.

Speaker 2:

Sort of fascinating. So when you think about how agencies obviously need to be able to help clients understand all of this, what are some of the data points that if you were presenting to a client and you were, had historically done a more traditional media mix in your buy, what were some of the things that you would pull out to help clients go, yeah, okay, let’s pull some money from television, radio, whatever it may be, and move it over to podcasting.

Speaker 3:

Well, one thing I would share with them, I think is one of the questions we asked in this study is, do you go out of your way to support brands that support your favorite podcast, support your favorite network or cable TV show or support your favorite radio program or radio station? For podcast listeners, 60% said they go out of their way to support brands that support their favorite podcast. The corresponding numbers in TV and radio were 48 and 43% respectively. That’s a sign significant difference.

Speaker 2:

No, no lie.

Speaker 3:

So that’s the kind of data that I would point to. But also in prompting purchase, another question we asked was, do the ads on this media, one of those three channels make you more likely to purchase the products or services advertised? And now we’re really talking about lower funnel here and podcast listeners, 43% said, yeah, the ads make me more likely to purchase. This is a group of people that are avoiding ads that aren’t getting a lot of ads, but they’re responding positively to ads on podcasting. And so that’s 43% with podcasts. TV, it’s 33, and with radio it’s 26.

Speaker 2:

Wow. Fascinating to me though, the idea that not only are they more likely to buy, but that they go out of their way to do that. And again, it does speak to the intimacy of the medium that they feel like they’re helping their favorite podcast or their favorite podcast host. By doing that, it’s a almost a gratitude action of sorts.

Speaker 3:

And that’s the power of small podcasts. And it’s easy to buy the large podcasts. I mean, you can call up Spotify and get on Joe Rogan, it’s going to cost you at least a million and you’re going to have to be on other shows. Right? That’s an easy buy. But if you’re listening to a big mass appeal podcast like that, I think your assumption is that if Joe Rogan did not get this particular ad from this CBD gum manufacturer [inaudible 00:36:51] Yeah. But it’s the small shows and the really smart agencies in podcasting, and there are some really devoted to it that understand how to buy it, have these massive spreadsheets of all of these small shows because they convert like bananas.

Speaker 2:

Yeah.

Speaker 3:

Those are the really grateful people.

Speaker 2:

Well, I mean, it’s part of the whole micro influencer trend. I mean, it is all part of that. There is an intimacy and a connection to that host and to the topic probably that warms up the audience for the ad.

Speaker 3:

A hundred percent. And it’s already an opt-in medium, right? It’s already somebody saying, I’m going to spend a half an hour or an hour with this show. I could be doing something else. I could be watching White Lotus right now, but you know what? I’m going to go mow the lawn or walk the dog and I’m going to spend that time with this show. And again, I think it’s common in podcasting circles to think that podcasts are this kind of special snowflake, pristine environment. To some extent that’s true. But a lot of it is just that we haven’t killed people with ads yet. And as long as that’s maintained, as long as we don’t destroy it with advertising, I think we’ll always be able to maintain that relationship with a variety of different executions of advertising.

Speaker 2:

You have a deep fondness for this medium. Why?

Speaker 3:

I grew up in northern Maine. I grew up on the kind of Canadian border where the coast ends, and I did not get a lot of, we didn’t get a lot of TV stations. I grew up when I was really young, we didn’t have cable or anything like that. I think we got three TV stations and two of them them were Canadian. And I would fall asleep at night with a transistor radio under my pillow listening to WBZ in Boston, which if the clouds were right and the winds were fair, you could get on a skip. Even though I lived about an eight hour drive from Boston. And I would grow up listening overnight to Larry King’s radio show, which when I say Larry King, people think about the almost caricature of Larry King on CNN. But he’s was one of the greatest radio interviewers and radio hosts ever. And I just was fascinated by audio and spoken word as a companion in a lot of ways. So I’ve carried that love with me forever. And even though my training and my craft has been in media research, I didn’t fall into audio by accident.

Speaker 2:

So for the podcast, the content creators, the podcast hosts out there, what’s our role in protecting and preserving the medium while also taking advantage of the opportunity?

Speaker 3:

It’s to never lose track and lose connection with your audience to always be talking to your audience and always be asking questions. How would an listener describe your show? Yeah, what would a listen miss if your show went away? What does a listener to your show look like? Who are they when they are at home? If you can’t answer those questions, you are still a padawan learner.

Speaker 2:

Yeah. At the end of the day, it all does boil down to the audience.

Speaker 3:

It really does mean, yeah, especially if your job is to monetize a podcast. Your product is not your show. And it sounds crass to say this, your product is the aggregation of listeners that you deliver for a particular advertiser brand or for some other purpose. And if you cannot describe what that aggregate looks like and reliably deliver them, then your product is flawed.

Speaker 2:

Oh, this is fascinating stuff. So putting on my agency owner or agency sort of creative hat in the study, I know you’ve done in the past, you’ve looked at some different kinds of advertising on podcasts and what’s effective anything come out of this study in terms of just some guideposts for us when we’re creating advertising for this medium?

Speaker 3:

Yeah, I mean would, I’ve talked about how well the Progressive and Geico ads performed, even though they’re same broadcast ads, but I would rather brands didn’t do that. I would rather brands see that podcasting serves a vital but different role. And I would like to see more to date. If you want to have a Geico ad on your show, you got to take the gecko, you’re stuck with the gecko, right?

Speaker 2:

Right. That’s right.

Speaker 3:

There’s a lot of risk aversion to it, but I would like to see people push back on that a little bit. And I would like to see more trust because nobody knows a particular audience better than the content creator is going to know that audience. And for brands to have a little bit of trust, and I know that’s hard to do, especially in things like financial services and healthcare where they’re regulated up the wazoo.

Speaker 2:

Right.

Speaker 3:

But it just performs better when you trust the host a little bit. And there’s a lot of, one of our projects last year called Safe and Sound was about brand safety and suitability and brand safety is binary. Something safer isn’t. But suitability is an interesting topic and brands are really kind of gun shy. What happens if I just said gun shy, which is going to get you flagged, Drew.

Speaker 2:

There you go. Well, good. I haven’t been flagged for a while. So there we go.

Speaker 3:

Haven’t been flagged for a while. But brands are reluctant to say, all right, I’m going to run my ad, but what if it gets run on an ad where somebody’s talking about how great it is to own lots and lots of guns and stuff like that. But those are edge cases, and B, we have a lot more metadata and a lot more tools in podcasting to prevent that sort of thing than broadcast radio will ever have.

Speaker 2:

Yeah. All right. This has been fascinating. So what did this study make you want to ask next that you didn’t ask in this study? What now is itching at you around this?

Speaker 3:

I want to do a little bit more on sequencing and flow of a campaign. And I think we intuited a lot of things from this, but I want to do a little bit more on when should you run a podcast campaign compared to a display campaign? I want to bring digital back into a little bit. So that’s one thing. The other thing, and this really is going to happen, this isn’t our product roadmap as it were, is a survey of buyers. They’re still on the buy side. People that are reluctant to buy podcasts and some of the reasons why are things that have changed that maybe they’re not aware of. Some of those things are misinformation, some of those things are correct and podcasting needs to adjust and figure some of those things out. But that’ll be one of the next big things we put out.

Speaker 2:

Yeah, I can’t wait to hear it. Well, we will have you back for sure. This has been fascinating. If folks want to follow the work of the company, follow you, track the research that you’re doing, because I know you’re always up to something, what’s the best way for them to get plugged in so they don’t miss anything?

Speaker 3:

The best way is to go to soundsprofitable.com and sign up for our weekly newsletter, which is one of the most widely read in the industry. We have over 130 partners right now in the space, all the publishers you can think of and people on the ad tech side. And that is the best way to stay plugged into everything that we’re doing. You can also subscribe or follow to our podcast feed, just search for Sounds Profitable. We put out a number of shows every week, including a show called The Download, which is a very short, this is the news you need to know about podcasting this week, kind of show, but that’s soundsprofitable.com is the home of all of that.

Speaker 2:

That’s awesome. Thank you my friend. It’s nice to have you back on the show, always have interesting things to talk to us about. So I am, I’m grateful for your time and you sharing your expertise. Thank you so much for being with us.

Speaker 3:

Delighted to be back, Drew. Thank you.

Speaker 2:

We will have you back again, no doubt. All right guys, this wraps up another episode of Build a Better Agency. So really some fascinating data points. I know that you can download the entire study at Tom’s site, and so make sure you go do that. And again, be starting to be thinking about, there’s multiple sides of this for us. If you are a podcast producer, either for yourself or for your clients, I think there’s data here that allows you to think differently, not only about how you produce the content, but how you approach advertisers. For many of you, you’re buying media for your clients. And so I think the data’s pretty compelling that if you are not putting podcasts into that mix that for some of your clients, it may make perfect sense, especially for some of those who can get on some of the smaller, very, very narrowly niche shows and you can have some significant impact.

I love the fact that it drops down to that middle and lower level of the funnel. We don’t think of media doing that as often anymore, and so I think that’s a powerful argument for you to share with your clients. So lots of action items from today’s episode, which you know I love. So don’t just listen to this and think it’s interesting, do something with it, share it with your team, share it with your clients. Think about the way you approach your media buys a little differently, and we will be back next week with another show getting you to think a little differently about the business.

In the meantime, speaking of advertisers, huge shout out and thank you to our friends at White Label IQ. As you know, they are the presenting sponsor of this podcast. So they do white label dev design and PPC for many, many agencies out there. And what’s cool about them is they actually are an agency. They were born from a traditional agency that’s been around for I think about 30 years. And they were struggling to figure out how to financially profitably build out websites and do PPP campaigns, and they cracked the code and they cracked the code so well that they wanted to offer it to their agency brethren. So check them out at whitelabeliq.com/ami. Good, good folks. They’ve known them for probably 20 years. They take great care of agencies and they understand your world because they live in it. So check them out and if you go visit them, make sure you tell them that I said to say hello. All right, I’ll be back next week. Thanks for listening. I appreciate you guys very much. Talk to you next week.

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