Episode 394

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Podcasts, radio, and TV are all similar mediums with a broad reach across the US. But over the years, younger audiences have moved away from radio and TV in favor of other platforms that offer ad-free subscriptions.

Quickly rising to the top amongst millennials and Gen Z is podcasting. So how do we still reach people who are consistently opting out of popular advertising avenues? Tom Webster has some answers for us.

He’s on the podcast today to break down the findings from The Media Moves the Message study that his firm, Sounds Profitable, did on advertising performance between cable TV, AM/FM radio, and podcasting.

This deep dive will give you all the evidence you need to understand that podcasting has a bright future. And as long as we don’t oversaturate it with advertising, it will be here to stay amongst audiences, both old and young, as the medium grows.

A big thank you to our podcast’s presenting sponsor, White Label IQ. They’re an amazing resource for agencies who want to outsource their design, dev, or PPC work at wholesale prices. Check out their special offer (10 free hours!) for podcast listeners here.
podcasting

What You Will Learn in This Episode:

  • How we can take advantage of the podcasting medium as advertisers
  • The Media Moves the Message study
  • The most noteworthy takeaways from the study
  • How podcast listeners skew age-wise and where we can make improvements
  • What the study results mean for agency owners and leaders
  • Will we eventually oversaturate podcasts with ads?
  • What the study means for content creators and podcast hosts
  • Trusting that a podcast host knows how to advertise to their audience
  • Areas where podcasting is lacking
  • The power of small podcasts

“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 age of the radio and TV audiences.” @webby2001 Click To Tweet
“Podcasting is significantly better at mid and lower-funnel brand metrics than radio or TV.” @webby2001 Click To Tweet
“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.” @webby2001 Click To Tweet
“As long as we don't saturate the audience with ads and your content is good, they're going to be forgiving of multiple ways that you support your show.” @webby2001 Click To Tweet
“For podcast listeners, 60% said they go out of their way to support the brands that support their favorite podcast.” @webby2001 Click To Tweet

Ways to contact Tom:

Resources:

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