When PodcastOne launched two year ago, 90% of its business was direct response ads. Audience deliveries were small. But engaged, loyal followings produced strong results and high CPMs. “The podcast audience is worth more for an advertiser because they had to perform a positive act to access the content,” (CEO Norm) Pattiz says. The company’s national brand advertisers have surged from six to 46 during the past two years and it expects to end 2015 with a 50-50 ratio of direct response to brand advertisers.
“National brands are starting to use the medium in much more effective ways,” Pattiz says. The company expects to bill $20 million this year, ten times what it booked when it launched two years ago.
How much do advertisers spend on podcasts? The experts have no clue.
Zenith Optimedia pegged it a $34 million last year. A report by Edison Research and Triton Digital’s it at $100 million. I have no clue which forecast is correct and don’t understand how they reached such dipsarate conclusions. Both firms have solid reputations and I imagine measuring something so small — in the scope of the worldwide advertising market –poses huge challenges. Nonetheless, I am optimistic about the podcast industry. I wouldn’t have started this blog if I didn’t think so.
The reasons for my optimism are many.
Business Insider estimates that the connected car market will grow at a 5-year compound annual growth rate of 45 percent. About 75 percent of the 92 million cars that will be shipped globally in 2020 will built with Internet connection hardware. People who never heard of podcasts are discovering them and those what know about the medium are listening to them more frequently.
I have seen this pheneomna first-hand. The AHA entertainment system in my wife’s new Honda CRV offers access to podcasts such as Marc Maron’s “WTF.” When I drive my 2008 Ford Edge, I listen to “The Adam Carolla Show.” I am sure it’s a matter of time when drivers of older cars will be able to steam audio content easily. This is bad news for Sirius. Like cable television, subscribers to satellite radio pay for lots content that they don’t want.
While podcast audiences may be small, they are passionate and loyal, which advertisers are increasingly warming up to. As PodcastOne noted recently: