Programmatic Sales May Not Work For Podcasts

Automation technologies arguably are having the biggest impact on the evolution of the advertising and marketing industry.

From automating the collection, management and analysis of consumer data to automating ad-selling and ad-buying processes, these fast-developing systems are revolutionizing what advertisers can achieve with state-of-the-art adtech and martech.

For instance, programmatic advertising systems allow brands to “group interest, intent and individual consumer knowledge into a single formula,” according to my colleague, Ethan SchriebergOpens a new window . In other words, programmatic connects publishers and ad-buyers, placing marketers’ ads in and around content that attracts their target consumers.

Moreover, as fellow Toolbox contributor, Peter Kowalke, statesOpens a new window , these platforms can even “customize and segment automated messaging for truly personalized communication with customers and prospects.”

Although such advanced capabilities have been massive game-changers for digital marketers, this corporate approach to serving ad options won’t necessarily work across every medium.

The podcast industry — which is slowly and gradually implementing ad automation — is sharply divided over whether to welcome this adtech trail-blazed by the internet.

Programmatic, meet podcasts

Podcasts have evolved from a niche marketing tactic into a key, and often principal, aspect of campaigns.

There are now 700,000 active podcasts and more than 29 million podcast episodes.

Ultimately, the sector’s rapid growth — further characterized by its $479 million in 2018 advertising revenues in the US, up 53% from $314 million the previous year — puts pressure on podcasters to integrate ad technology.

As Rachel Lowenstein, associate director of Invention+ at WPP PLC-owned agency Mindshare, explains in an interview with the Wall Street JournalOpens a new window , “If there is any way we can make things more efficient and targeted, it’s going to happen.”

Enter programmatic.

For now, programmatic sales are taking a small slice of the podcast advertising pie — up from 0.7% of US sales in 2017, they nearly doubled to 1.3% last year, according to research from the Interactive Advertising Bureau and PricewaterhouseCoopers LLP.

If such exponential growth continues, though, programmatic’s role in the podcast space could expand rapidly. Indeed, this ad tech promises many potential improvements to the ad-serving dynamic between publishers and advertisers that many in the industry are anticipating.

For example, automation can help podcast publishers attract bigger advertisers that don’t want the hassle of multiple deals — as is customary in that space — in their search for new, large audiences. Plus, some podcasters believe programmatic technology could be used to raise revenue from older shows by refreshing the ads for new audiences.

The problem with programmatic

According to Sahil Patel in the Wall Street Journal, industry executives warn that “the trick is figuring out how to apply ad tech to podcasting without breaking what’s working.”

To understand what Patel means by that, you have to understand what makes podcast advertising particularly effective.

Barstool Sports produces several major podcasts and according to its Chief Executive Erika Nardini, “podcasting is a great medium because there’s essentially a relationship between a host and a listener — they are in your ears, they are telling you stories and it creates an ongoing relationship.”

That dynamic can be leveraged by advertisers.

Nardini warns, however, that programmatic advertising could tarnish that intimacy that inherently creates trust between listeners and podcasters.

In addition, streamlining ad sales to such an extent could result in publishers cramming podcasts with as many commercials as possible, diluting their authenticity and making the audience experience far more ‘corporate.’

Then there are potential brand safety issuesOpens a new window that could spread as a consequence of programmatic. As Katherine Hays writes in EntrepreneurOpens a new window , “on the one hand, digital automation has made blanketing every corner of the internet as easy as clicking a few buttons, lowering the cost and broadening the scope of brand outreach. On the other hand, it has taken control out of the hands of companies, leaving their brands vulnerable.”

Advertisers must be wary of jumping onto the programmatic bandwagon for podcasts.

Risks abound here and while it may be cumbersome to go through the current process of buying podcast ads directly from publishers, this relationship will ensure that the podcast-based elements of your campaign maintain an air of authenticity — exactly as the modern consumer wantsOpens a new window .

Most of us are better off being in complete control of where — and to whom — our ads are being served.