A few data points about podcast advertising

MarketWatch’s Frank Barnako published a piece (free sub req'd) about podcast advertising, out of which a few nuggets of information are worth noting:

• Podshow claims to have reached in Q405 their 2006 revenue target of $300 to $400K, and predicts sales in the millions of dollars this year.
• There seems to be a consensus that there's money to be made by recycling established media in the podcast world, too. Michael Greeson, president of the Diffusion Group of Dallas, pointed out that NPR recorded 4 million downloads in the first two months it offered podcasts.
• Last summer, Greeson issued a research report projecting nearly 60 million people in the United States will be listening to podcasts by 2010. The report also estimated 15.5 million portable players would be sold last year; the tally was closer to 22 million.
• Cameron Reilly, the founder of the Podcast Network of Australia, is achieving between $40 and $100 cost-per-thousand on his podcasts, but this level of revenue will only be accessible to the most popular podcasts because of their traffic and/or demographics.
• At least half-dozen companies have announced plans to offer menus of podcasts to advertisers. Firms like Podtrac Inc. say that they will do the selling and help podcasters insert ads in shows, and take less than half of the revenue as commission.

Has anyone done a review or comparison of podcast advertising tools/networks ?

Comments

[Nik Cubrilovic]

Interesting post Jeff though I believe that Cameron is selling advertising at a fixed rate and then calculating back to work out a real CPM - I doubt you could sell podcast advertising for a $40+ CPM across the board.

[Cameron Reilly]

Nik, what makes you believe that?

[John Furrier]

Interesting post. Especially the NPR and PodShow comments. PodTech has experienced some very interesting growth over the past few months. We'll see what 2006 brings to the world of podcasting

[dan]

$40+CPM rates are absurd to represent to Content Owners or Advertisers; yet, the Big Boys (those who grabbed VC money in '05) still have that on their site(s). Yes, there will be the 1-off deal here and there -- but, any company who is planning for the long run is not smoking-that-kool-aid -- they aren't banking on those numbers.

Here's what's shaking out in the marketplace: 1. Audio advertising is, by its nature, local/regional; companies with those solutions will survive. 2. The ability to serve video ads in association with audio content works for ad agencies (again, the Creative teams have not focused on National audio ads since the hey-days of AM radio; being able to bundle video with audio is in demand; and, only one company does this today). 3. CPM rates will fall in line with the current on-line video ad market; yes, more targeting will = higher rates; but, it's proportional, not exponential. CPC options (again, there's only the one company working with this too) are also in demand and will expand and stabilize the marketplace.

The other reality-check is that advertisers don't really give-a-hoot about User Created content that is popular "today." Media buys are 6-9 months out -- and, professional, regular delivery schedules are mandatory. Tough to guarantee from garage-productions. Advertisers need a blend of professional with home brewed content.

Technology will not "win this market." Dynamic ad serving is not the Golden Ring -- it's just a component; and, sometimes "hand matching" delivers more value.

There are about 7 major players in this technology/service zone. Only one of them is hitting all of the above points. There are new companies coming on line each month, all hoping to grab some fairy gold. Some will succeed, many will fail.

"Rocketboom" is the Reality. 1-million weekly downloads and they got tired of slogging it around and trying to get Media Buyers to commit - so, they bid out their space on eBay -- and, had to produce the ads within the Bid price. As a 1-off, they nabbed a $40/CPM -- what do they do next week? Let's remember, the Bid hovered at $15/CPM for days...then, maybe due to the uniqueness, "I want to be first" -- they, there's great PR around this, it went up to $40/CPM...but, when the ancillary PR isn't there? What's it worth? And, will anyone bid again? 1-Million weekly AND video...and, it's a long road.

The sad part in all this is that many of the companies who are representing "high hopes" here are doing a disservice to the independent publishers they claim to adore.

2006 should be alot of fun...depending on which company you're aligned with.

[Marshall Clark]

"$40+CPM rates are absurd to represent to Content Owners or Advertisers..."

NPR's most popular podcast shows are routinely bringing in $50-60 CPMs:
http://podcastingscout.com/podvertising-success-at-npr