Programmatic advertising is a widely known term in marketing these days. At first, it sounds like an excellent opportunity of monetizing a podcast. But is it really what your brand needs? In this episode, Tom Hazzard explains how programmatic ads impact audience behavior and experience, which is actually not that great when implemented in most niche podcasts. Tune in as we peel back the curtain on programmatic ads to help you find much better ways to monetize your show and build a meaningful rapport with your listeners.
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Programmatic Advertising: Is Automating Media Purchase To Target Audience Worth Its Cost?
I want to talk about a subject that a lot of you existing podcasters and even aspiring podcasters have probably heard this buzzword that has been going around the podcast industry a lot in the last several because more podcast hosting platforms are offering this option for you to choose and they are called programmatic ads.
My topic now is to not only share with you what programmatic ads are, but I want to talk about programmatic ads’ audience cost, meaning the cost to your audience and you as a podcaster. A lot of people are offering this, and they say, “You can monetize your podcast from day one.” You can, but I want to break this down and provide some information to peel back the curtain a little bit on programmatic ads, what they mean, and what the pros and cons are. You can make a decision if this is something you want to participate in because you might be surprised. It is not all as rosy as it may seem when you first read about it.
What Are Programmatic Ads?
What are programmatic ads? The easiest way to explain this might be from a listener perspective, and one platform that a lot of podcasters are interested to be a part of, and if you already have a show, your show is probably on there, is Spotify. Spotify is a little different because they are a listening app. They are a listener destination. I’m going to explain there is a distinction here. There are a couple of facets or different kinds of programmatic ads on Spotify.
If you do not have a paid account or if you have a free account, whether you are listening to music or podcasts, I see this a lot on podcast shows that people use the Spotify app all the time. They are not paying for a paid account. When they click play to listen to an episode, they will hear an ad before that podcast is played for them.
This is true of any of you podcasters that have podcasts that are available to be listened to on Spotify. You have no control over this. You don’t get paid any money for it. This is something Spotify does, and it is their way that they’re trying to motivate listeners to sign up and pay for a Spotify account so that they don’t have to listen to those ads.
Spotify is going to monetize the listener one way or another. You are going to pay them a monthly amount to not have any ads served to you, or they are going to get paid by an advertiser to serve ads to any listener who wants to listen to their content on their platform because they are not paying. The advertiser’s going to pay, and the listener has to listen to some ads before they get the content.
By programmatic ad, what I’m talking about here is ads that run usually, there are some rare exceptions, but I’m going to say usually at the very beginning before anybody ever listens or is able to listen to the content that they have clicked and chosen to listen to. Spotify is one good example from a listener’s perspective.
There are also other platforms that are podcast-hosting platforms. Any of you that are existing podcasters know what I’m talking about. For those of you that may be reading this blog as a new reader, if you don’t already know, every podcast has to be hosted on the internet somewhere because the vast majority of listening apps don’t keep your MP3 files in their servers to make them available to their customers like Apple, Google Podcasts, Stitcher. They are tuned in to many different listening apps out there. There are more coming online all the time, and you can be available on all of them. For the vast majority of them, they are a directory and a middleman. You need to have a podcast media host to serve your MP3 files to that listener to upload it to them, or what they are doing is downloading it or streaming it to their device.
The podcast hosting platforms, of which Podetize is one, in full transparency, we are a state-of-the-art media host with advanced analytics, the best out there, in my opinion, but there are others out there as well. In particular, the ones that are participating and have programmatic ad programs would be Anchor, which is owned by Spotify, Megaphone is also owned by Spotify, Libsyn, and others have options for you as a podcaster at the host level to opt into their programmatic ad program.
Relevance (Or The Lack Of It)
I want to make sure you understand programmatic ads are like that word says programmed. I want to talk for a minute about the relevance or lack of relevance. It is more often what you would experience as a listener for the ads that are being put on the front of your show. We have experienced many customers coming to Podetize from other platforms like Megaphone and Anchor. One of the complaints we often hear is people that are unhappy with the ads being run at the beginning of their show before anybody ever hears anything from them as the host. Their message to the world is delayed until some ads are served.
Let’s talk about the relevance. Programmatic ads are random and trying to appeal to a wide variety of potential listeners out there. They are not targeted. What I mean by relevance is if you have a show on real estate investing, pretty much always, those programmatic ads are not going to be something related to real estate investing. If you got a show on business consulting, those ads are probably not going to be relevant to business consulting.
I have experienced some ads, personally, from customers coming from other platforms where they have a show that is on health and wellness. They are hearing ads on the front of their show for HP Digital Inc. I personally don’t even know what HP Digital Inc. is, but if I’m trying to listen to content for health and wellness, chances are probably not there, and interested in hearing about something from HP Digital Inc or Google Ad words.
There are lots of different Google ads out there, and it is not for people to go use Google as a search engine. Google pretty well has that covered. We all use the term, “Go Google it.” Google has other kinds of services and things they provide. They are advertising those to the widest audience they can find. These are the types of ads that are national brands and maybe more brand awareness campaigns or new products, things like that, that get run in these programmatic ads. They are not going to be relevant to what your show is about.
Let’s talk about the cost to you, the podcaster, not the monetary cost. I’m talking about the cost to you in audience loss by participating in such a program. We have experienced real-world cases of some of our customers because we produce episodes in Podetize for lots of different customers, and they don’t have to be hosted on Podetize. Most of them are, but there are some that are hosted on Libsyn, Megaphone, and Anchor. It happens.
Customers come to us and say, “You produced my episode. Why are there all these ads? Why are people having to listen to 2, 3, or more minutes of random ads from all these companies before they ever hear me and my content? Why is that happening?” You are participating in, for one reason or another, and maybe you realized or didn’t realize what you were getting into. Maybe you signed up for something you thought might be a little different. They said, “You can make some money.” You can. We are going to talk about the scale of that amount of money.
What people are hearing all this random stuff for 2, 3, or more minutes before ever hearing my stuff, and what you are doing is selling out your audience to these other advertisers and annoying them because they click to listen to your show. They are not getting it right away. They have to listen to this ad first. Yes, you are going to make a share of money at some point.
Let’s talk about the monetary reality of that. I’m sure by the time some of you are reading this blog have changed a little bit. What I have seen in checking them out before recording this episode is that you will find, on average, people are going to make somewhere between $12 to $20 per 1,000 downloads of their show, sometimes even less. I have seen most often somewhere in that range for participating in a programmatic ad program.
That means if you get 1,000 downloads, you are going to make $12, maybe less or as much as $20. You decide, is that worth it to you to inconvenience your audience and make them listen to these ads? Ultimately, it is your choice. Not on Spotify. That is different. Spotify did that to everybody’s show, no matter where you are hosted. That is different. On all the other apps, it is your choice to participate in these programmatic ad programs to make some money.
If you got a show that got 100,000 downloads and, let’s say, on the high side, you make $20, and you got 100,000. That is $20 times 100. You make about $2,000. That is a good chunk of change. That may well cover the production cost of your podcast and be worth it to you. If you don’t have tens of thousands of downloads, the amount of money here is so small. It may not be worth it to you. The ending up the audience cost to you, the loss of audience for people being annoyed because they wanted to listen to you, your content, not these ads, they may leave you. It is different. They may unsubscribe, listen to somebody else, and you give up on your show.
It is different if you are going to be putting a different ad within your episodes that is more relevant. That is different, and that is a subject for another episode. We are talking about programmatic ads and programmatic ad costs. I’m going to stay focused on that because the programmatic ad is the easiest program to opt into. Most podcast platforms invite people and entice them to sign up.
I want you to consider why they are enticing you to sign up because you are not the only one making money on that. The podcast hosting platform is making money. In reality, they are making a lot more money than you because they are doing this across thousands of shows. The money is more meaningful to them than it may be to you. It is not going to set the world on fire in terms of making you a lot of money unless you have built a large audience. I would suspect I would invite you to consider what I would call the shotgun approach of programmatic ads. Ads that are not focused on your topic and are being done across.
Many shows, at the same time, are paying less for that opportunity because they know it is a bit of a shotgun approach. It is random whether people are going to be interested to take advantage of that call to action, to go to that brand, to look into whether that product or service. They are going to pay less for it. If you got a lot of downloads and audiences that are well-defined, it is pretty obvious why people are listening. You can likely make a lot more money with an advertiser that is looking to reach your specific audience. They will pay a lot more for the same downloads than a programmatic ad program will.Programmatic ads are random. They are trying to appeal to a wide variety of potential podcast listeners while not being very targeted. Click To Tweet
Podcast Hosting Platform vs. YouTube
I want to make a distinction here and share with you something about a different programmatic ad that can have some more relevance. It is another example a lot of us are familiar with, and I want to share this to draw a distinction between the podcast hosting platform, the podcast industry programmatic ads, and YouTube. Many of us are familiar with YouTube. Whether we are big YouTube watchers or occasional YouTube viewers, we have all seen these ads that stream at the beginning, and if you watch along on our video, they will pause it and interrupt it and play an ad in the middle of it. We have all seen this thing.
On YouTube, that is programmatic to an extent. Although when you advertise on YouTube as an advertiser, you can say, “I want to have my ad featured in videos about these topics.” That is keyword based. I could say, “For Podetize, I want to have my video on the front of any video that is talking about launching a podcast.” There are a lot of different phrases in a way that is worded, and I can be on those. It is more relevant.
What I want you to understand as a podcaster or aspiring podcaster is that the viewing experience for those ads is different from a podcast listening experience. It is important to understand. When we are watching a video on YouTube, and the ad is served, it will say, “You can skip this ad in so many seconds, or your video will play after so many seconds.” You have a feedback loop that tells you what to expect and what is coming next.
When you are listening to a podcast, you don’t have that feedback loop, and it is not easy to skip. Different listening apps will let you skip ahead 30 seconds. I’m listening when I’m driving in the car, and it is not easy as I’m concentrating on driving to go and push that, or I’m at the gym, I’m exercising, and I’m sure not going to do it then, but I’m enjoying listening to content while I’m doing those things. It is a different experience.
I want you to understand, as a content creator and a podcaster, if you do your episodes, record them as videos and publish them on YouTube but you may, if you have enough of a listening audience, want to opt into monetizing your YouTube videos. It is a different experience because at least the ads that you are going to play there are usually a bit more in alignment with the content, and you have a visual feedback loop, whereas, in audio, your listener doesn’t. It is frustrating as a podcast listener that, “How many ads am I going to have to listen to before I get to my content?” Often, people will say, “Forget it.” They skip out. They don’t finish listening to the ads and never get to your content.
That is why I’m not a fan, in case that isn’t obvious yet, of programmatic ads. I don’t think they serve the listener well. I don’t think they serve you, the podcast host, well. Unless you have an awful lot of downloads, and maybe there is a monetary reward that is worth it to you. I still think the audience cost to you and that negative experience people have that listening experience, the reality of the fact that these are random things that they didn’t sign up for when opting in to listen to your show. It is probably not worth whatever amount of money you will make on your show unless your show is a general random topic.
If you got a subject matter that is broad and your audience is not well-defined as to who they are because your subject matter has such wide appeal, maybe programmatic ads are fine for you. For most shows that are niche topics, the misalignment between the random ads that are going to play and your content is usually not worth it. The audio experience is a little more intimate than the visual experience.
The other thing I want to share is some programmatic ads that are not put at the beginning are done. There are a lot of these radio networks that are also syndicating their ads through podcasts or syndicating their shows rather through podcast platforms. A lot of times, those radio networks will randomly, like YouTube does, interrupt the content and play an ad. They are not being careful about it. It will interrupt in the middle of a word. They are not discerning or careful about what is a good place to put an ad. Fifteen minutes in, they are going to run an ad, and that is it.
On YouTube, it is a visual experience. A lot of times, you will have a warning saying, “Your video will continue after an ad that is going to play in 3, 2, 1, and it shows you the ad. You know it is coming. It is less frustrating. At least you have a little warning and a feedback loop. In podcasting, it doesn’t do that. If you are not in control of where your ads are placed and choosing the exact locations where ads will go, that is after a thought is complete, maybe after a question before an answer is given. That is a logical place where you got to wait for the answer after the question. People will likely hang on because they want to hear the answer to the question. If you are interrupted in the middle of a word, it is disruptive, it frustrates people and probably not going to keep, especially new listeners, that is their first experience, coming back for more.
One last tip or recommendation. If you are an aspiring podcaster, somebody who is planning to launch a show but you haven’t launched yet, even if you are going to opt into one of these programmatic ad systems offers that you may get, you may not want to do it from day one because you haven’t built an audience yet. You haven’t earned the right to monetize your show.You need to serve your audience for awhile and earn the right to serve them ads, promotions, and calls to action that you think they may be interested in. Click To Tweet
Something we talk about on Feed Your Brand a lot is you need to build rapport with the audience. You need to serve that audience a while first and earn the right to serve them up some ads, promotions, and calls to action that you hope or think they may be interested in. If you do that from day one on your show, it makes listeners question, “What is in it for them by listening? I’m going to hear a lot of these ads. I don’t even know if I want to listen to this show yet.” We highly recommend you get your show established, at least start to build an audience, and work in some ads over time.
The more relevant they can be to your subject matter and topics, the better. Even if they are not going to be, if they are going to be programmatic, think you got to build some history of episodes and topics so people can at least go through that list and see, “There is some good stuff they are talking about here. I want to hear that.” At least they’re willing to put up with those programmatic ads. In order to get that content, they can see a lot of what they are going to get. Doing it from day one is challenging.
What I want to share with you is to raise awareness about what programmatic ads are, what does it mean, and what some of the pros and cons are. The pros are you can earn some money. Some, but how much? It is proportional to the number of downloads you have of your show. If you don’t have a lot of downloads, you are not going to get a whole lot of money. The cons are, is it worth it to sell out your audience? That is how listeners quite honestly would feel about it. They were like, “They are not trying to provide me value as a listener. They are trying to make money from these advertisers.” That is an unfortunate situation that may make it a bit of a tougher hill to climb for you to build that audience that, hopefully, you want to serve and maybe benefit from in the future. There may be a better way to do it.
That is what I wanted to share with you. I hope that was helpful. There will be a future episode where we talk about different kinds of advertising and monetary opportunities. Hang on for that in the future, but for now, that is what I wanted to share with you. We will be back with another great episode. Until then, this is Tom signing off on Feed Your Brand.