This post is a part of Made @ HubSpot, an internal thought series through which we extract lessons from experiments conducted by our very own HubSpotters.
Have you ever noticed how quickly things can change? A new product or service revolutionizes an industry overnight, and it becomes hard to imagine life before it. Who remembers T9 now that talk-to-text is so mainstream? Is anyone still holding onto the number for a reliable taxi service? Or, do we rely on our Uber and Lyft apps instead?
In the world of audio, there's been a massive (albeit slower shift) in the way people consume this content. The catalyst? A rise in podcast content paired with advancements in technology.
Here at HubSpot, we've been watching the world of podcasting grow and change. We've even been testing the proverbial podcast waters ourselves. If you're considering creating your own podcast or advertising through one, this post is for you.
But before we get into the nitty-gritty of podcasting, let's take a brief history lesson.
A Brief History of Podcasts
The word “podcast” is a combination of “iPod” and “Broadcast.” Adam Curry and Dave Winer coined the term when they created a program called iPodder in 2004. iPodder automatically downloaded internet radio broadcasts and uploaded them to an iPod — thus creating the first ever podcast.
From our POV here at HubSpot, it's clear we're slowly moving away from audio you tune into and towards on-demand audio.
This shift from broadcast to podcast is driven by two primary factors: content and technology.
There are currently over 660,000 active podcasts. From popular news shows and chat shows to fictional storytelling and true crime, almost everything is a podcast. Additionally, there's plenty of successful podcast content that would never work for broadcast radio, such as the free-wheeling, interview-based news show Pod Save America — which is consistently over an hour.
In terms of technology, smartphones have given everyone on-demand access to podcast content, newer, cheaper headphones are everywhere, and smart speakers are making their way into homes across the world.
The way we listen has fundamentally changed to an always-on, on-demand streaming experience. People are moving to podcasts in the same way we're moving towards on-demand services like Netflix, Hulu, and HBO.
This massive shift in consumer behavior is driving a lot more listeners to podcasts, and with more listeners comes more marketing and more advertisers.
Trouble in Podcast-Land
Podcasting today is facing a dilemma that mirrors the US economy: there's a widening gap between the top 1% of podcasts and the other 99%. This divide is exacerbated by a central issue with podcast content — discoverability.
Despite its mass growth, podcasts are mainly discovered in two ways: word-of-mouth and iTunes charts. Moreover, podcasts at the top of the charts tend to get recommended more often, further solidifying their leading position. The only way to break through is to have an incredibly innovative show or a massive marketing budget — and most successful shows have both.
In response, both independent and funded podcast networks like Radiotopia, Gimlet, and Wondery have formed. Those that are funded by venture capitalist money, though, are able to simultaneously launch multiple high-production shows and promote their shows with huge marketing budgets.
This shift became crystal clear through my experience with HubSpot's own flagship podcast, The Growth Show. When the show launched in 2016, it got a few thousand downloads and ranked in the top 25 business podcasts. Three years later, we're getting more downloads per episode (almost half from our back catalog — episodes that are 60+ days old). Yet, we're still struggling to break into the top 200 business podcasts.
Big platforms are investing more in podcast content, and VCs are throwing cash at podcast networks … this behavior begs the question, “Why?” I think, instead, we should be asking, “Who?”
Everything You Need to Know About the Podcast Listener
According to Edison Research, the average podcast listener is a well-educated, high-earning millennial. Podcasting is also one of the few channels with a listenership that accurately reflects the general population. The number of men and women who listen to podcasts is nearly equal, and, in terms of ethnicity, the makeup of podcast listeners roughly mirrors the actual demographics of the United States.
Overall, it's easiest to say that everyone listens to podcasts.
Habits of the Podcast Listener
Most research on podcast listenership divides listeners into a few categories: 1) listeners who've heard of podcasting, 2) listeners who listen monthly, and 3) listeners who listen weekly.
At the most frequent, weekly podcast listeners consume 5+ hours of content across about seven shows. Anecdotally, that typically breaks down into two dedicated shows, two occasional shows, and two brief shows.
Whether it be over-sharers on Instagram or keyboard cowboys on Facebook, every medium has a group of obsessed folks who want to consume everything. In podcasting, these people are called speed listeners. They represent a small segment that's set on consuming as much audio content as possible. To do this, they adjust the podcast playback speed to 1.5x, 2x, or even 3x.
This consistent, loyal group of intensive podcast users is a good indicator that the medium has built up a devoted following — and isn't going away anytime soon.
Podcast Engagement is Off the Charts
Whether you're a monthly listener or daily speed listener, one thing is clear: audio content is engaging. When comparing podcast content to other channels like blogs, social media, and video, we see some distinct differences.
1. Podcasts are long form.
The best podcasts are at least 30 minutes long. Take a look at the top shows, and you’ll find their average episode length is over 45 minutes long. Dan Carlin's Hardcore History is consistently a Top 100 podcast, and his episodes are often over four hours long. Joe Rogan's Joe Rogan Experience podcast is released weekly and most episodes average two to three hours. Although there are some benefits to a short podcast, the majority of podcast listeners enjoy their long-form content.
2. Consumption is almost 100%.
As a long-time marketer who's created videos, hosted webinars, and run workshops, I’ve found that audience content consumption is rarely over 80%. A recent report by Sumo found that the average blog visitor only about a quarter of an article and only 20% of readers finish the articles at all. On the other hand, webinars attendees often arrive late, exit early, and sometimes leave in the middle.
Furthermore, according to research by Wistia on optimal video length, videos that exceed two minutes experience a clear drop-off in consumption traffic. Wistia also found that videos under two minutes have a 70% engagement rate; at six minutes, engagement drops to 50%, and at 12 minutes, engagement falls to below half.
Let's face it — most advertisements are hardly noticeable. We walk by or fast-forward without a second glance. On the other hand, podcasts generally rely on host-read ads. These ads are novel, authentic, and interesting. According to a report comparing podcast ads to digital ads by Nielsen, podcast ads generate 4.4x better brand recall than display ads. That includes scroll static and pop-up ads on other digital media platforms. The study also found that 61% of consumers who heard the podcast ads were likely to purchase the featured product.
With such high engagement, podcasts have become a surprisingly effective ad channel. Now, here's what we've learned about advertising.
Everything We’ve Learned About Podcast Advertising
We've tested advertising for HubSpot Academy on our three podcasts and have sponsored a few podcasts in the past — and we've learned a lot.
Traditionally, podcasts have three places for ads: Pre-roll (before the show starts), mid-roll (in the middle of the show), and post-roll (at the end of the show).
Pre- and post-roll ad spots are generally cheaper than mid-roll and tend to take less time. Most ads have some sort of call-to-action that prompts listeners to go to a specific URL or use a specific discount code in order to get a discount.
One of the most frustrating aspects of podcast advertising is how difficult it is to track. As a digital marketer, you can see how many people download or listen to your show and how many people follow the URL or enter the discount code … and that's it.
Good news: The cost per impression (CPM) for podcast ads is still relatively cheap. If you are considering sponsoring a podcast, here's the standard formula.
Podcast Sponsorship = (# of Downloads Per Episode / 1000) x CPM
Note: The CPM (Cost per Thousand) generally ranges from $20-$50.
So far, we're confident that podcast ads are effective and that the CPM is affordable. So, potential podcast advertisers should keep a few things in mind:
Audience Analysis: What type of listener does the show attract and are they a good fit for your product?
Sponsorship Schedules: What’s your timeline? Most major podcasts with sizable download numbers are booked months in advance.
Frequency > Reach: From our own experiments with promoting our podcast on other podcasts, we found that we got a larger lift in total download numbers when we had ads appearing more frequently in on a single podcast versus a single ad on larger podcasts.
Is getting in front of podcast listeners your goal? If your answer is a resounding “Yes!”, here's your next question: Do you want to rent or own this audience?
To put it into podcasting terms: Do you sponsor a podcast, or do you create your own?
Rent Your Audience or Make Your Own Podcast
Despite what you may have heard, podcasting is not easy. Simply tossing a live mic between two people chatting rarely makes for a good show. As more and more podcasts are created, quality (and the demand for quality) has skyrocketed.
If you're dreaming of being the next How I Built This, you need to be prepared to put some serious time and effort behind your production.
That being said, there are some distinct advantages to owning a smaller, devoted audience than renting ad space on a much larger podcast. Here are the advantages when you create a podcast:
You get control of the ad space. You can promote your company and products or services during the ad space. Better yet, you can make an extra buck promoting someone else's.
You gain additional impressions. Not only is your audience engaging with your content and potentially hearing ads for your business, but every time they see the podcast creator, it's also an additional impression.
You can create a network. If you’re large enough and have the resources to create multiple podcasts, the promotion of one show can drive listeners to another show by the same producer by saying there are “more by this provider."
Sponsoring or starting a podcast is something every brand should consider. Podcast popularity and listenership will only continue to rise and, with it, the opportunity to connect with people in a new and novel way.
Audio content is one of the best opportunities out there for brands. My best advice? Don’t let this one pass you by.
Originally published Mar 20, 2019 9:44:54 AM, updated May 07 2020