Programmatic in Podcasting

Published on
March 27, 2022

Podcast advertising revenue is a growing market and expected to reach $2 billion by 2023. Most ads are still bought and made in the traditional way – as a host read ad. But the current state has started to shift. Targeting and measurement capabilities have improved since the early podcasting days. With the need of podcast companies to keep growing their ad revenue and advertisers wanting to reach listeners at scale.

Natrian Maxwell, GM of emerging channels at The Trade Desk found a very great metaphor for the process of building programmatic advertising for podcasting: “You’re taking lots of tech from different places, and you’re ultimately creating it on the fly, so you’re driving the train down the tracks. You’re also fixing the train and building the train at the same time, so there is going to be a little bit of a learning curve in terms of integrating this new tech, testing it, ensuring that it’s working the way it’s supposed to be working, and then building upon that with new features.”

Despite the fact that programmatic is still relatively small, it is a growing industry. It’s forecasted to be 8% of all US ad spend for 2022 which is a big step up from just 2.2% in 2020 (according to IAB). The biggest issue at the moment is that the industry as a whole doesn’t have programmatic resources yet – only certain parts of the process are fully automated as yet. This means that ad buyers for podcasts don’t have the ability to log into buying platforms to place bids and manage campaigns.

Most podcast networks don’t make their programming available on an open exchange but operate in private marketplaces. And even when podcast ads can be bought programmatically, there is still some help from sales staff involved. These kinds of invisible handshake deals help publishers avoid mis-categorization of their content. And according to the majority of audiences, host-read ads are appreciated, and listeners prefer them. The founder and CEO of independent podcast advertising and analytics platform Backtracks compared host-read ads with TV product placements on how the coexist with other ad formats and he thinks that it is unlikely that host-read ads will be completely gone. But he also believes in a shift in podcast ads mainly due to a rise of podcast ad tech. The future might be a mix of both – but either way it is a new ad industry to watch. For more details on programmatic advertising, check out our latest blog post.

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