Presented by AdColony

In 1848, gold was discovered at Sutter’s Mill. Thousands flocked to Northern California, seeking their fortunes in mountain streams. Seven years later, it stopped. The surface ore was gone, and the easy money disappeared. The California Gold Rush was over.

Fast forward to December 2017. Bitcoin crashed hard — also about seven or eight years after its big rise began.

While hundreds of years apart, these two gold rushes show us that value is often linked to a level of uncertainty. No one really knew how much gold there really was, and with Bitcoin, the level of unpredictability was exponentially higher than any economic outlook or sports game outcome. One minute it was low, the next sky-high, then a massive drop.

Podcast inventory, and the value of that inventory, is also experiencing a boom. The number of podcasts has grown to 700,000 (though 75% of them will discontinue production within a year) and there are nearly 30 million episodes in the wild, up from 18.5 million last year.

Following growth

There’s a long-tail problem to podcast growth though. If you get more than 36,000 podcast downloads, you’re in the top 1% — and if a website told you it had 36,000 weekly views with no reliable measurement, you’d laugh. Additionally, the vast majority of podcasts are low-quality and not worth yours, or anybody else’s, dollars.

Brand advertisers are jumping on podcasts like crazy, but why? The double-digit stats of podcast audience growth is impressive and they are following the audience. 62 million people listened to a podcast last week and podcast ad spend is projected to hit $1 billion by 2021.

Sixty million people isn’t that much. Compare that to mobile gaming, for instance, where 2.2 billion people globally are active mobile gamers, and of those, 62% are playing multiple times a day. That’s a 67x difference in audience volume. If you’re an advertiser looking to reach people on their mobile devices, sure, podcast audiences are mostly using their smartphones. But if you’re looking for scale, you’re not going to find it.

That’s just one reason why mobile app ad spend is also growing in the double-digits and expected to hit $64 billion worldwide and $13 billion in North America. (13x podcasts!) The elephant-in-the-room reason is that mobile apps offer far more than just reach. While audio certainly has an impact, particularly on long-term memory, the short-term impact of video ads is far more effective.

With sight, sound, and motion, advertisers can connect the viewer’s emotion to the brand, product, or service, and create a solid personal relationship. Additionally, two-thirds of podcast ads are read by the host, which means the advertiser has little control over branding elements like music, cadence, tone, and style of the delivery.

Ad skipping in podcasts is also a problem. The biggest listening platforms (Apple, Spotify and Stitcher) all offer a button that allows the listener to skip 15 or 30 seconds ahead — which is not-coincidentally the length of an advertisement. In mobile apps, on the other hand, it’s totally different. Most (88%) mobile users watch ads all the way through to the end and then continue back to their content or gaming experience, and then you have rewarded video, where consumers choose to start, view, and engage with the video. 

A matter of measurement

The reason we know this — that most mobile users complete the video ad — is because we have measurement. Advertisers and publishers know exactly how engaged viewers are because they are getting reporting on how many people are seeing, finishing, and also, with interactive video, actively engaging with the content of the ad.

Podcasters have no such access to impression or viewability metrics, let alone engagement. Despite efforts from the IAB to corral the industry with standard metrics, and from independent publishers like NPR to record “listening events,” Apple does not support any of these, not even at the impression level, which is table stakes for digital advertisers.

Podcasts can be downloaded from hosting networks, aggregation services, or independent websites, truly, a decentralized form of media. There is no way to simply tally how many people have listened to an episode. Podcast analytics are an estimate, at best. Advertisers are using a medium born of the 20th century (e.g., radio) and also stuck with 20th-century measurement.

Which brings me to what podcasting is, and should be, used for — exactly what radio has done for advertisers for the past 99 years: toll advertising. Old school term! Businesses would pay for the cost of a program in exchange for a brand mention, which is still alive and well in podcasts.

Don’t get me wrong, I love podcasts. It’s basically all I listen to if I’m not working out. Stuff You Should Know, RadioLab, Malcolm Gladwell’s Revisionist History, This American Life, My Favorite Murder. It’s a long, diverse list.

If you’re a startup brand like Casper was, and are looking for grassroots brand awareness, podcasts are an interesting experiment. But if you want scale and performance, and you want to be able to accurately measure the ROI on your spend, podcasts are not where you should be directing your dollars. For a targeted mobile audience and high-impact, trackable campaigns, mobile video is still your best bet.

Jonathan Harrop is Senior Director of Global Marketing & Communications at AdColony.

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