As podcast advertising revenue continues to grow—to $2 billion by 2023, by IAB estimates—podcast networks are enhancing ad tech for the burgeoning industry.
The past few years have seen a slew of acquisitions in the space. Take iHeartMedia, which acquired Triton Digital, an ad-tech platform for audio, last February. Later in the year, Spotify scooped up Whooshkaa, an Australia-based podcast tech platform.
Targeting and measurement capabilities have improved by leaps and bounds since podcasting’s early days. But the industry was built on host-read ads and sponsorships sold directly, so the integration of programmatic advertising hasn’t exactly been seamless. Still, podcast companies want to keep growing their ad revenue, and advertisers want to reach listeners at scale.
“You’re taking lots of tech from different places, and you’re ultimately creating it on the fly, so you’re driving the train down the tracks,” explained Natrian Maxwell, GM, emerging channels at The Trade Desk. “You’re also fixing the train and building the train at the same time, so there is going to be a little bit of a [learning] curve in terms of integrating this new tech, testing it, ensuring that it’s working the way it’s supposed to be working, and then building upon that with new features.”
Still, programmatic spending makes up a small portion of the industry overall. It’s forecasted to be 8% of all US podcast ad spend this year, per eMarketer, but just 2.2% of podcast ad inventory was sold through programmatic channels in 2020, according to the IAB.
Marketing Brew spoke with several podcast ad buyers, sellers, and industry execs who broke down what the small programmatic ecosystem looks like these days, how it’s helping the space grow, and why some are opting out.
Murky middle
Those who work in the podcast industry say that, at least on the whole, it doesn’t have full programmatic capabilities quite yet. That’s largely because only parts of the process are truly automated.
Much of it boils down to this: When media buyers purchase ads on digital platforms, they can do so with varying degrees of self-sufficiency. They can log into tools like Meta’s Ads Manager to place bids and manage campaigns without human interaction. That’s not the norm in the podcast space.
“I can’t log into any of these platforms and actually make the buys on the back-end,” said Krystina Rubino, GM, offline practice at marketing firm Right Side Up. “There’s no bidding yet. When I say we are not a programmatic medium yet, that's what I mean.”
As a buyer with years of experience across digital mediums—not just podcasting—Rubino said buyers need more control over transactions before she considers them fully programmatic.
Plus, Rubino told us, most podcast networks, which actually produce the content that marketers are buying ads across, don’t make their programming available on an open exchange, instead operating in private marketplaces.
That’s the case for global podcast company Acast, which counts about 40,000 podcasts as part of its network, the majority of which are available programmatically, according to Elli Dimitroulakos, Acast’s head of automation, Americas.
Ad buyers can access Acast’s inventory through a demand-side platform—Acast is integrated with The Trade Desk, for instance—to buy at scale, not just one campaign on one show. Even so, those buys are still done with help from an Acast salesperson, and there’s no open marketplace bidding involved, according to Dimitroulakos. That’s in part due to the fact that Acast’s inventory is in demand, she explained, so sell-through rates are high even without an open marketplace.
Brian Kaminsky, chief data officer and president of revenue strategies at iHeartMedia, said the company is selling out of almost all its inventory directly via its sales team, not through programmatic deals. When iHeart does sell programmatically, it, like Acast, does private marketplace (PMP) or programmatic guaranteed (PG) deals. These are types of deals that, in short, allow only selected advertisers in.
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That’s the norm for the small share of programmatic podcast ad deals, since most podcast companies don’t offer open marketplaces. These kinds of invisible handshake deals help publishers avoid miscategorization of their content, which can result in ads showing up on podcasts where they shouldn’t, according to Maxwell.
“The most important part is safeguarding the experience, having control over the creative, making sure that we understand who’s buying the supply and what podcasts it’s landing on to protect our podcasters,” Dimitroulakos told Marketing Brew. “And so we define that as our programmatic service.”
Different options
Though rare, open marketplaces for podcast ad sales are not entirely nonexistent: SXM Media’s AdsWizz platform offers one called Podwave. Still, publishers that work with AdsWizz only sell about 5% of their inventory programmatically, said Justine Benjamin, director, global marcom for AdsWizz.
Shoshana Przybylinski, media director at AMP Agency, says she still buys a lot of podcast ads directly—with no tech involved—depending on the client.
“It really depends…If [the client is] local, we’ll typically buy through a network or programmatically, just because we can’t waste any media dollars on something that’s going to run nationally,” Przybylinski said. “So that’s definitely when we would lean more towards the network buying. But sometimes you do want that host connection, and that’s when you would go to the show directly.”
For the past six months, iHeart’s been working on an offering—which it has only just started to roll out en masse—that allows advertisers to do a bit of both at the same time, according to Conal Byrne, CEO of the iHeartMedia Digital Audio Group.
The service, called the iHeart Audience Network, is what’s known as a managed service—not programmatic. It lets advertisers “pair things that they usually can’t,” Byrne said, bundling host-read ads with dynamic insertion that could help campaigns achieve greater reach across different shows.
Podcasting’s hypnotic hosts
On the sell side, some podcast networks, while offering technology to help brands target and measure ads, aren’t as interested in automating the sales process. Crooked Media, best known for its hit political show, Pod Save America, is one such network.
Crooked's VP of sales, Giancarlo Bizzarro, said the company partnered with Acast to help facilitate international sales, but opted out of its programmatic sales option.
Host-read ads just work too well, Bizzarro said. They sell at premium prices, sometimes as much as $75,000 for a 60-second shout-out, and that was in 2020. Prices have gone up across shows since then, as the supply of host-read ads has gone down across the industry, according to Bizzarro.
“One of the things we hear most from our audience is that they really appreciate the way we do our ads and they find humor in them,” Bizzarro said.
Jonathan Gill, founder and CEO of independent podcast advertising and analytics platform Backtracks, equates host-read ads to early product placements on television. While it seems unlikely that podcasting will move too far from host-read ads, there’s still a shift occurring in large part due to the rise of podcast ad tech.
“If you look at any form of modern media, all the way to print, there’s still advertorials, there’s still product placement, there’s still ads,” Gill said. “They’ll both exist, but the percentage of [their] contribution to the whole will change over time.”