Why Programmatic Ads Aren’t Necessarily Great For Podcasting

A number of players in the podcasting and advertising industries are making bets on programmatic ad delivery — dynamically inserting ads into a podcast as the episode is downloaded. It’s an understandable temptation, but we at Midroll see some tradeoffs.

Compared to display ads and radio commercials, the host-read podcast spots we sell are downright artisanal. That’s a good thing, and we want to keep those spots sounding that way — because they perform better than every other more traditional ad spot out there. We have the results to prove it: 63% of listeners to our shows have bought something advertised on a podcast, and advertisers who started in 2013 spent literally double when they renewed in 2014.

Programmatic buying and podcast ad insertion offer advantages. You can snap up a lot of inventory across a multiplicity of properties very quickly, frequently at a volume discount. It’s easy to see why ad buyers like this – it makes their job easier and forces downward pressure on the price of individual ad units. For the content creator, the appeal is less clear. And we think there are serious downsides for advertisers, too — most notably in terms of ad performance.

A Slippery Slope to Blandsville

The biggest risk to programmatic podcast ad insertion is that the spots lose their charm, their nativeness, and thus their effectiveness. Regular Howard Stern listeners know that many of Howard’s reads are canned; you know exactly when during his read for a job hunting site Howard will interrupt himself with a belch, because you’ve heard that same ad five times already. That’s a problem. Over-familiarity with identical, repeating ads leads to tune-out, the audio equivalent of banner blindness.

What’s more, aiming for a programmatic buy that spans dozens or hundreds of shows on a tight turnaround means an even greater likelihood of getting rushed, timed reads. Most of our hosts don’t watch the clock when they record, because they’re naturally incorporating their ad reads into their shows. Avoiding that temptation to generate a crisp, ramrod 60-second spot becomes a lot harder when you’re pre-recording an inserted spot.

With programmatic the path of least resistance is to use pre-recorded spots. That’s how the top radio advertisers are able to be heard nearly every hour of every day on every station across the country. The strategy works, if saturation is your goal. But that’s not what we want for podcasting.

Hand-crafted podcasts

Podcasts’ live host-read ads are so valuable because they are both powerful and limited. Podcast advertisers don’t need their message to cut through a mass of commercials like they do in a single radio stop-set. That’s because we keep the ad load low and under control, with 5 or fewer spots per hour.

We called our spots artisinal at the top. That’s because the best host reads are original and well integrated into the show. Podcast listeners are savvy, and they know the difference between a canned ad and a fresh one. We just don’t think our listeners want to get interrupted with, say, a 1-800-Empire jingle; that’s jarring to the more intimate podcast experience.

The true live read is engaging and entertaining, because even if the listener knows the product, she still doesn’t know where her favorite host is going to take it. There’s still the chance for surprise and delight.

Programmatic: A Solution in Search of a Problem

To be clear, we’re not trying to protect our horse and buggy business. But, for us, programmatic is a solution looking for a problem.

Every week new advertisers are learning about and experiencing the singular advantages of podcast advertising. Now is not the time to dilute that power by reducing the effectiveness of individual spots while driving down their price. We have no problem filling inventory on shows like WTF with Marc Maron, The Bill Simmons Podcast, Question of the Day, or Comedy Bang Bang — they’re hitting tremendous sell-throughs relying on the “hand-crafted” live reads we offer today.

Lex Friedman, Midroll’s EVP of Sales, said, “Look, I understand an advertiser’s desire to pay less. Who doesn’t want to pay less? But people are also willing to pay a premium for real value.

“Podcast ads with live reads are a truly premium product. I firmly believe that if advertisers buy programmatic, pre-recorded podcast spots at a bargain-basement price, they’ll get what they pay for. Our advertisers deserve better.”

Innovation to Build Value, Not Dilute It

That isn’t to say there isn’t plenty of room for innovation in how podcast ads are sold and delivered. For instance, we look forward to being able to personalize the ad experience for specific audiences, which may employ a type of ad injection. The critical difference between this and programmatic is that we remain committed to keeping host reads original and fresh from episode to episode, even if the specific ad a listener hears is tailored.

We only want to pursue opportunities that enhance the value of podcast ads for advertisers and our podcasters. If there are ways that ad injection technology can be used to do this, without sliding down that slippery slope of commodification, we’re open to exploring that avenue. But, as it is now, programmatic buying threatens to diminish this. That’s why we will continue to emphasize the fresh and entertaining live reads that has fueled podcasting’s rocketing growth.

Comments 1

  1. John Lee Dumas

    Agreed! We pride ourselves on crafting unique reads that Fire Nation can resonate with. This makes it a win for everyone.

    Reply

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