Hernan Lopez, Founder and CEO of Wondery, argues the case for advertising effectiveness through podcasts.
According to Ofcom, the UK podcast industry has enjoyed sharp growth over recent years, with listener numbers almost doubling in the last five years. But this is not just a trend in the UK. The growing popularity of podcasts is a worldwide phenomenon. In the US, one in three adults listen to at least one podcast a month.
Our research has also shown that podcast consumers are more educated, affluent and younger than average – thus harder to reach through other media. And notably, 78% of them respond positively to the ads – especially host-read ads.
Against that backdrop, how can brands and agencies engage with consumers through podcasts the right way? Wondery, along with iHeart Podcast Network and Stitcher, is hosting a series of roundtable sessions at CLX, the new immersive and interactive programme with the world’s best content creators from Cannes Lions and MediaLink, to discuss just that.
One of the key things we will be discussing is how brands can create an emotional engagement and connect with their consumers through the right podcast. And this is important, as according to research by J.D. Power cited by the IAB, two-thirds of all US consumers expect direct connectivity to the companies from which they buy goods and services. Two-thirds!
The results of those who have done this successfully speak for themselves. This is especially true of direct brands such as Dollar Shave Club, Ring and Trunk Club – all of whom have managed to simultaneously build brand equity as well as direct sales with podcasts as one of the main channels.
According to the IAB, as recently as two years ago 73% of all ads on podcasts were coming from advertisers directly measuring the response (though notably 96% were priced on a CPM basis or sponsorship, underscoring the effectiveness of the medium). Which begs the question – why are podcast ads so effective?
It could be simply that listeners appreciate the ads. A Nielsen survey found 78% of podcast listeners said, “I don’t mind the ads, because I know they support my show.”
But we believe there’s something else.
Everyone loves hearing a story. There’s no better way to hear that story than from the voice of a friend – that’s the way podcast listeners think of their favourite hosts.
Perhaps it’s no coincidence than established brands are jumping onto the podcast bandwagon: in the latest release of the IAB/PwC Podcast Revenue study, brand awareness ads together with branded content have jumped to nearly half the total spend going into podcasts, from 27% two years ago.
Large brands measure results not via promo codes but instead via brand lift studies. Last year, with the help of Metrixlab, Wondery ran three such studies for large packaged goods brands. With two-month podcast campaigns, we delivered purchase intent lifts of 20 percentage points on average.
Finally, TV networks and movie studios are joining in stride. Nearly every major network and movie studio is advertising on podcasts. When so many people wait for a friend to recommend a TV show before they start watching, podcasts hosts become that above-mentioned friend.
And having a friend make that recommendation is even more important now as audiences are becoming sceptical towards a brand promoting their products on everything from social media platforms to TV. In fact, according to the Harvard Business Review, fewer than half of the people it surveyed globally said they could trust business, media, government and non-government organisations – and that even includes charities. Conversely, 60% of those respondents agreed that you can trust ‘a person like yourself’.
And that’s what podcasts offer – a way to connect and engage with consumers through someone they consider their friend... and who doesn’t listen to their friends?