Culture Hack

Culture Hack

A Future in Audio: How Podcasts Are Becoming a Coveted Medium for Advertising

About a week ago, Amazon announced that it would begin to roll out ads in its podcasts. This comes nearly a year after the worldly tech and retail company acquired Wondery— a podcast firm known for shows like “Dr. Death.” While each show’s host currently reads ads during episodes, Amazon wants to sell ads that are closer to traditional styles that you would hear on the radio. The digital giant’s focus on this new medium as a source of revenue reflects a big shift in the importance of audio entertainment and its advertising potential. 

When the COVID-19 pandemic hit, podcast listenership initially declined mainly because a lot less people were commuting. For months since stay-at-home orders were established, the rates in podcast plays were all over the place until listeners decided to consume their podcasts in a new and engaging way: for afternoon and early evening entertainment. It’s obvious that, in order to listen to podcasts during their commutes, consumers had to like the idea of podcasts. However, before this turn in listening habits, the medium was not as appealing as film or television when it came to leisurely consumption. 

According to studies done by Edison Research, 40% of people have increased their spoken audio consumption since the pandemic started. 

As a whole, the American audience for podcasts broadened over the past year, becoming more diverse in gender, ethnicity, and age in a way that best reflects the population. And while not everyone is listening to podcasts in the same way they enjoy television, this medium is more broadly known by close to three-fourths of the population, meaning that the likeliness of someone listening to at least one podcast episode is very high. 

So why should advertisers, show hosts, and big podcast streaming platforms care about the medium as a means of connecting with their consumers? One major point to consider is that, up until now, most shows have been in charge of their ad roll out. This gives hosts the creative license to deliver their ads and receive payment in a way that best suits their style. Additionally, fans of shows often attribute a genuinity to the products or companies mentioned in episodes because the voices they trust are not forcing out-of-place commercials on them. 

In May of 2020, the average listening time for podcasts was 6 hours and 23 minutes.

Now that listenership has ramped up significantly due to the shift in consumer habits and attention given to podcasts, the door for in-episode advertising has opened up even more. Although ads are easier to skip compared to other streamed mediums, podcasts incorporate promotions into their show’s flow that listeners would be disrupting the show if they did skip. Because of the lack of ad skips, around 62% of consumers say that podcasts made them consider trying new products, according to a Nielsen study. 

Despite the evident success in podcasts as a way for companies to better connect with their consumers, there is a concern about how that effectiveness will increase or decrease with time. As more streaming platforms like Amazon get involved in the advertisement side of the podcasts they publish, establishing standardized commercial breaks similar to television commercials, the genuinity of show hosts in presenting partnerships may be lost on their audiences. Going into ad strategies for podcasts, brands should be aware of the sensitivity the general audience of the medium has to how their favorite shows bring in outside content. It would best benefit companies if they granted even the slightest creative license to hosts to be the bridge between companies and consumers, rather than distant messengers.