Cheat Sheet: Industry executives lament podcast advertising’s challenges during the IAB’s Podcast Upfront

By Sara Guaglione

The podcast advertising market continues to be a work in development. That was evident during the first day of the two-day Interactive Advertising Bureau’s Podcast Upfront yesterday.

In between podcast publishers like Blue Wire, NPR and WarnerMedia pitching their latest programming slates, panel discussions dealt with the limitations of host-read ads, the challenges of measurement and the need for advertisers to adopt contextual targeting.

Key details:

Advertisers feel the limits of host-read ads and are trying to expand contextual ad targeting capabilities, as well as the technology to support programmatic buying.
Fragmentation is still an issue for podcast advertisers, who want to measure listeners across devices.
A slate of podcast programming across genres like sports, news and multilingual were announced, coming this fall and next year.
Revenue from brand focused campaigns represent 45% of all revenue in podcasting, approaching parity with performance and direct response, and dynamically inserted ads and host-read ads continue to dominate the podcasting space, according to Eric John, vp of the IAB’s Media Center.

The effects of fragmentation

While podcast advertising revenue is expected to be more than $1 billion this year, programmatic buying represents less than 5% of that revenue. A big reason for that is the issue of fragmentation, according to Hayley Diamond, evp of U.S. digital investment at Publicis. It was a topic that came up many times during the conference, and especially during the last segment of the day on programmatic podcast advertising.

People are listening to podcasts on smartphones, smart speakers and even “connected cars” (cars that can get 5G and have audio streaming apps built into their infrastructure), said Andre Swanston, svp of media and entertainment vertical at TransUnion. It’s a persistent challenge for advertisers in the audio space to be able to measure listeners across those devices. Multiple audio streaming platforms “makes things quite difficult,” Diamond said.

“There is a need for technology to determine episodic-level targeting and viewer targeting and brand safety and suitability,” Diamond added. “Stitching together the different measurement requirements will help us in this space.”

The host-read holdup

Listeners’ “connection” to host-read ads is another challenge, according to Claire Fanning, vp of ad innovation strategy at SXM Media. Advertisers are struggling to maintain the “authenticity and intimacy” of the host-read ad but overcome the limitations of that native podcast environment (a host will read an ad in their own podcast — which is not a creative spot that can then be programmatically inserted into other podcasts, for example).

Programmatic provides “flexibility, control and speed of execution,” said Regina Sommese, svp of paid media at Discovery. However, it also requires “sophisticated technology,” added Fanning.

As a result, finding a way to combine the merits of host-read ads with programmatic buying processes sounds like it is still a work in progress. Ashutosh Gangwar, gm of inventory partnerships at The Trade Desk, said they are working with publishers like SXM Media to figure out new ways to “automate the process of ad insertion and buying.”

Oddly, for all the grousing about host-read ads’ lack of dynamism, the IAB …read more

Source:: Digiday