Media Briefing: Why podcast execs are making a play for advertisers’ influencer budgets

Three podcast execs told Digiday that during the second quarter, it became clear that they should try and win ad dollars out of marketers’ influencer budgets instead of solely going after the (oftentimes smaller pool of money) that marketers earmark for audio.

Many podcast hosts, they argue, have followings on social platforms that rival traditional social media influencers, making hosts prime candidates for the influencer treatment among advertisers.

“We should be vying for those creator influencer budgets … [and while] the focus has been performance agencies and holding [companies] like WPP, Publicis, etc … [what] we’re seeing now is the line of budgets from audio to influencer budgets are blurring,” said Ross Adams, CEO of podcast network Acast. 

In Q2, iHeart Media’s podcast revenue grew 8% year over year to $105 million, which Conal Byrne, CEO of the iHeartMedia Digital Audio Group, attributed, in part, to his team beginning to pitch podcast hosts as social media influencers. All in an effort to try and win some dollars from brands’ large social media ad budgets.

Byrne said the pitch to social media marketers centered around key stats, citing a study by ARN NeuroLab — the research division of Australian Radio Network, which distributes iHeartRadio in Australia and New Zealand — which found that social campaigns experience an 83% uplift in performance when audio ads are incorporated into the plan. It’s unclear what performance metric(s) the study was referring to.

“Podcasting is certainly audio, and it is sometimes video and a lot of times social. And we see that when all three of them are working together, they actually are much more effective. And the reason why is because people discover podcasts on social, and that’s often the first time that they meet a host,” said Gretchen Smith, vp of media at audio advertising agency Ad Results Media. She added that there’s been a trend toward building out more multi-channel campaigns among her advertiser clients in recent months, but declined to provide specifics.

But it also meant speaking to agency execs in charge of influencer marketing budgets — often for the first time — in their own language. Bryne said his team had to rephrase the way they pitched podcasts, incorporating the terminology of influencer marketing so that it didn’t feel like they were learning an entirely new medium. “These podcast influencers just look and feel a little different. They’re college professors, they’re best-selling authors, they’re Malcolm Gladwell,” he said. 

The word “podcast” has massively changed in the last five years alone, according to Adams. 

The rise of video podcasts and social media as a distribution platform has changed the way younger audiences are discovering podcasts, with 76% of Gen Z audiences reporting that they discover podcasts through clips on social media versus any other medium, per a study by Edison Research and SXM Media. 

Therefore, Adams argued that the term “podcast” in the ad market does a bit of a disservice to the medium by not representing how much the category has expanded beyond audio. Instead, he said podcasting and podcast hosts should be reclassified under “creators,” to try and make the gap between audio, video and social media budgets more narrow. 

But each of those platforms are usually controlled by different budgets and different teams, he added. “Therefore, you do apply for different budgets … And a lot of the time, the audio buyers don’t operate or have access to the influencer budgets, so you’ve got to deal with a whole new set of customers,” Adams said. So far this year, the number of multi-channel campaigns booked at Acast has increased 46% compared to the year prior, according to Adams.

Multi-channel brand campaigns that extend beyond podcasting into video and social media is also an “area of opportunity and growth” in the back half of the year, for SiriusXM, according to Scott Walker, the company’s svp of ad platform.

And so now in conversations with agency execs, Walker said his team is not limiting itself to only asking after the traditional audio budgets that clients or their agency reps have set aside. Instead, he said they’re going directly to the brands’ CMOs to take part in the strategic planning conversations.

But these pitches to CMOs and social media marketers aren’t as easy as responding to the typical inbound RFP for podcast ads. This process requires significant relationship building and setting expectations that multi-channel deals are going to have longer sales cycles, Walker said.

Essentially, podcast sellers have to think up brand campaigns “that gets [influencer marketers] excited, and it can be manifested not just on the podcast, but on camera with video distributed to YouTube … and pushed to social [media] in the form of sponsored posts. That opens up the aperture in terms of the budget available,” said Walker.

On the buy side, multi-channel campaigns that encompass an influencer’s video, audio and social assets tend to be more efficient from a budgetary perspective as well. According to Smith, creators tend to remove ad hoc fees and cut bigger brand deals, which she said has helped incentivize the trend toward podcasts and social campaigns merging. 

“I saw many of my clients’ brains break when they’re like, ‘I have a video team, and I just can’t meddle with what they do,’” said Smith. But given how much young millennial and Gen Z audiences consume podcasts on platforms like YouTube or social media, it becomes necessary for marketers to have a cohesive plan when working across audio and video mediums. According to a study by Cumulus Media and Signal Hill Insights from the fall, 36% of podcast audiences between the ages of 18-34 say they use YouTube the most to access podcast content.

“[You can’t] not reach those consumers just because of how your marketing department is set up,” said Smith.  

All in all, it’s still the “early days” of podcast networks making a play for influencer budgets, according to Walker, but he’s adamant that as long as podcasters continue growing their presences outside of audio and on social media platforms or video channels, influencer marketers will continue to bake podcasts into their social media budgets.

“It can’t be done for every podcast — you have to have a certain level of scale to really leverage that capability — but it’s going to be a greater and greater percentage of the overall mix as the most popular shows and creators are diversifying their audience across all these channels,” Walker said. 

What we’ve heard

“The question that, as a publisher, that always comes into play is, can your ad server do more? … Is Google Ad Manager being pulled back because of the other Google businesses of AdX and DV360?” 

– A media exec on the DOJ’s antitrust trial against Google’s ad business 

Numbers to know

250: The number of unionized editorial staffers at legal trade publication Law360 that went on strike this week. 

622: The number of unionized staffers in The New York Times Tech Guild, the “overwhelming” majority of which voted to authorize a strike.

$15 million: The amount of money that a new nonprofit organization, the Los Angeles Local News Initiative, raised to support small independent news outlets in the area.

$131 million: The amount of money hedge fund founder and investor Paul Marshall paid to acquire the right-wing British magazine The Spectator. 

$1 billion: The amount of money that conservative activist Leonard Leo is pledging to end “liberal dominance” in news and entertainment. Leo said he intends to invest in a U.S. local media company within the next year. 

What we’ve covered

Google’s ‘my way or the highway’ approach takes center stage in antitrust trial:

• On today’s episode of Google on Trial, the word of the day is “uncompromising.” 
• According to witnesses, whenever the ad industry tried to negotiate, Google’s message was clear: it’s their way or the highway.

Get caught up on the latest from Google’s antitrust trial here.

How social platforms stack up for publishers:

• Social media is always changing, and that’s especially true for publishers, who often find it challenging to determine where each platform fits into their business.
• To find out where different social platforms stand with publishers, Digiday+ Research surveyed more than 40 publisher professionals this summer on their social media usage and ad spend, and how social platforms play into their revenues and branding.

See the latest stats from Digiday+ Research here.

Decoding the jargon behind Google’s antitrust ad tech trial: 

• Keeping track of the Google ad tech antitrust trial that could shake up the most influential company in media and advertising is challenging, especially with all the technical terms that keep cropping up. 
• From industry terms like “header bidding” to “AdX” to “DSPs” to internal Google terms, such as “Jedi Blue,” there’s a lot to wrap your head around. To help, Digiday has compiled a glossary of the terms likely to come up throughout the trial.

Take a look at Digiday’s glossary for the confused here.

With AI, agencies advance CTV contextual targeting by seeking emotional connections:

• With the help of artificial intelligence, media agencies are analyzing emotions detected in streaming content to contextually align their ads, with the hopes of improving outcomes from attention to ad recall.
• Agencies hope that generative AI tools will help them perceive and log the emotions and context of the content on a scene level, be it a show or movie, to help transition ad breaks with a better fit in tone, volume, message and imagery.

Read more about AI’s applications for CTV advertising here. 

Google’s ad tech impact on publishers front and center during opening day of DOJ’s antitrust trial: 

• At issue is the government’s investigation into whether Google’s business practices and corporate culture have been skirting the rules of fair competition, namely whether it leveraged its dominant position in the display ad market. 
• In its opening statement on Monday, the Justice Department sought to lay the groundwork in its attempt to show Google controlled the competition, controlled customers and controlled the rules. 

Learn more about how the DOJ’s antitrust trial against Google covers publishers here.

What we’re reading

Business Insider names Jamie Heller as its new editor-in-chief: 

After about 20 years at The Wall Street Journal, Heller is taking on the top editorial role at Business Insider, filling the opening left by Nich Carlson, who stepped down from the helm after almost seven years, The New York Times reported. 

The Guardian US taps a new chief advertising officer:  

Sara Badler is joining the Guardian US as its chief advertising officer, less than a year after she took on the role of chief commercial officer of advertising at Morning Brew, Axios reported. Advertising makes up about 40% of the Guardian US’s revenue per year – equalling about $17.6 million in its last fiscal year, which ended March 31 – and Badler will be tasked with increasing that business line.  

Activist investor Starboard Value wants to limit the Murdoch family’s influence on News Corp: 

Starboard Value is pushing for News Corp to eliminate its dual-class share structure, which gives more voting power to one class of stock over another. The Wall Street Journal (an entity within the News Corp portfolio) reported that Starboard argued that the structure is not in the best interest of shareholders and affords too much power to owner Rupert Murdoch and his family. 

There is “no confidence” in Forbes’s leadership, according to the union:

The overwhelming majority of Forbes’s unionized editorial staff passed a vote of “no confidence” in the company’s CEO Mike Federle and chief content officer Randall Lane, Talking Biz News reported. The union claims that Federle and Lane failed to maintain editorial standards of integrity as well as allowing for pay inequity and ultimately refusing to be part of productive contract negotiations.