Michael Geoghegan (who hosts the Official Disney podcast among other things) is stirring up the podcasting community again (like the good friend who comes over to your house for an intervention) with an article titled “Podcasting – It’s a Community Not an Industry“.
I agree that “this is the year that podcast advertising takes off” seems like the slogan every year. At each of the last 3 Podcast Expos there was a meetup group about monetizing podcasting. The first year the group was just Paul Colligan and I and it has grown over the last two years. My feelings back in 2005 was that the whole ad selling process was harder than people realized based on my experience during the dot com boom at an advertising supported company. My guess at the time, as I recall, was that it would take 5 years for podcast advertising to take off. I signed with PodShow in 2006 in part because I did not see anyone else out there that I thought would do a better job and I thought they would help me grow my audience. A lot of people thought a potential 3 year contract was way too long, but I was pretty sure that I would be done with the contract before things really took off in podcast advertising anyway.
Part of the problem is that the whole advertising industry needs to change and that is only slowly happening. The money going into television is not proportional with the value that advertisers are getting from that media. The agencies actually know this now and a number of companies know this as well now. GM just announced that half of their budget next year ($3B) will go to the Internet. I would love to say that all of that will be for podcasting but that would be naive. I think that GM’s decisions is the beginning of a good trend but also of a period of instability and upheaval within the advertising industry.
The other unrealistic expectation that Michael did not touch upon was that advertising will pay based on what influence do you have and who do you influence. I have known people who have quit their day job to podcast when they have 50 listeners. That might be a good plan if you have a podcast heard by 50 billionaires.
When I was selling advertising on my own i was getting a $50 CPM for advertising on the Amateur Traveler podcast. But people spend more money online on travel than any thing else and my audience is not just composed of travelers but they are the people their friends ask for advise about travel (one of my listeners in Istanbul told the story her friends keep asking how she knows so much about different destinations) so many podcasts should not expect rates at that level. So best case, even if I was able to sell out advertising every week, traffic of 80,000 downloads a month would pay me $4000 a month or $48000 a year. My wife and two kids are all in private college so that would not be quit your day job numbers for me. And as Michael points out, podcast are generally not selling out ad inventory every week.
So is podcasting done? I don’t think so. Is it taking off slower than most people expected? Certainly. Will some companies go through hard times? I think so (see the rumor that PodShow is doing layoffs). But I also see some positive signs.
- The audience for podcasting is growing. Dollars will eventually follow the eyes and ears.
- Well known brands are starting to get more regular advertising by big brands, at least in my sector of podcasting which is travel. If advertising comes to podcasting on a regular basis we should expect it to come first to podcasts from old media. I expect that advertisers will start with the people in their rolodex until their is more demand than supply and then they will branch out to the larger podcasts and then they will look at aggregation of smaller podcasts. This is what I expected in 2005 and what I still expect in 2008. Of course, I also still expect that 2010 is the year podcast advertising will come together.
My plan is continues to continue to grown my audience and keep podcasting… for now at least. My plan is not to quit my day job… for now at least.