Ep.15 - And Now... A Word from Our Sponsor

Tim and Kyle explore the thinking behind Luminary's non-Tweet about podcast ads by exposing the realities behind an advertising-based monetization strategy.

Episode at a Glance:

• Tim and Kyle questioning the reasons behind why Luminary tweeted: "Podcasts don’t need ads" and then apologized and deleted the tweet.
• This leads to a conversation that begins with, "Well, is Luminary technically correct? The best kind of correct?"
• We then weigh the pros and cons of having skip buttons in apps and if listeners are actually skipping most podcast ads.
• Tim talks about how a podcast ad led him to buy a new product based on the host's recommendation -- and how it worked out well!

What did we learn?

• Both Kyle and Tim agree that we are not against podcast ads, we just want better ads that take your audience into consideration.
• Practice moderation. Too many ads -- no matter if they are host read or not -- is still too many ads.
• If the advertising message or product matches the host AND the host's audience, then the ad actually works up to 25-percent of the time.
• Host read ads appear to fit the content better because the host can personally connect the ad to the podcast.
• However, automated ad placement is still tone-deaf by creating a jarring listening experience created by poor placement and content alignment (SNL even made fun of this fact).
• The data shows that loyal followers will both trust a sponsor AND buy their product if they advertise with their favorite host.
• Sponsors are still the best way to monetize a podcast, even if you only sponsor yourself.
• Sorry, Luminary. Ads or no ads, paywalls for podcasting are still a bad idea (like we told you back in Episode #3).

Additional Reading:

• The future of the podcast business isn’t advertising or subscriptions. It’s both.
• Podcast Ads Are As Effective As TV Commercials, Study Says
• Podcasting Has An Ad-Skipping Problem, Too
• January Top 15: Skillshare learns podcast advertising
• U.S. Podcast Ad Revenues Reached Landmark $314 Million in 2017, Marking 86% Growth Year-Over-Year, According to IAB & PwC Research
• The #2 radio advertiser is also the #2 podcast advertiser

Industry Predictions:

• Read our growing list of podcast industry predictions for 2020!

Industry Quotes:

• "The #2 radio advertiser in 2017 is now also the #2 podcast advertiser, according to data from Magellan’s podcast ad report for January. Magellan details all 110 ads the company found in the US top 2,000 Apple Podcasts trending chart. The top three: #3 Indeed, #2 Geico, and #1 ZipRecruiter. While this does show that US radio’s $15.9bn annual revenue is beginning to come to podcasting (which stands at a more meager $314m), none of radio’s other big advertisers are yet visible in the podcast top 15."
  ― Podnews.net
  
• [A Sponsor] HAS to fit my audience. [That's why I charge $90 an episode]. How did I come up with this? I felt $50 wasn't work the extra effort and paperwork involved. $70 didn't seem enough as I have a niche audience. $120 I was worried that they may not get their money back. I settled at $90. I'm thinking in the future I might charge $100 as I can do that and still sleep, and look at myself in the mirror"
  ― Dave Jackson, School of Podcasting

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