Here's the best strategy for advertising on podcasts.
If your company or marketing team has sat out of the "podcast revolution" but have seen it helped catapult scores of startups into million-dollar or billion-dollar brands, this is for you. Perhaps you don't know where to begin to form a plan for podcasts to become your secret weapon – or, worse, perhaps you tested podcasts and failed.
Whatever the reason, now is your last chance to act. As the hype machine behind podcasts sends valuations soaring, CPMs are likely to follow, closing the door for performance marketers to pursue low-cost advertising tests that immediately show tremendous returns. It's a quarter till 3 at the "podcast saloon," so here's some advice to get in on the action before last call.
Who should advertise?
This question could be an article on its own, so let's keep it general. Direct-to-consumer (DTC) brands have been the bread and butter of the podcast advertising space since its inception, and if that's your company, the path is set. However, success in podcasts comes in a variety of business models, and DTC is not the only way.
Provide enough budget to test widely. There is no one-size-fits-all budget, but a minimum viable test spend is generally $50,000. If that number sounds ridiculously low, it is. Many podcasts charge that much for just one episode, but for the first test, steer clear of those. Test as many different types of shows as possible, giving each podcast enough time to prove its potential. While there are success stories where advertisers tested podcasts with $20,000 and quickly scaled to 50 times that amount, that was more indicative of the good old days.
Today, the fail rate for advertisers going in on the cheap is far higher than those who set aside a more significant test budget. It's a numbers game. Half of the shows tested will often not perform to expectations, and testing wider will increase the likelihood of finding the true winners.
Brands should have a national footprint or as close to it as possible. While dynamically inserted ads have made geotargeting on podcasts a reality, it'll never truly be able to scale the channel until the business is close to national.
Which podcasts to buy
There are more than half a million podcasts available for consumption, and while most don't offer ads, choosing which podcasts to test the first campaign is daunting.
Listeners and brands love Serial, The Daily and This American Life – everyone does. However, the shows that everyone is talking about rarely pay off from a performance perspective. There are exceptions, but they are few. Launching a podcast test on the most popular shows will undoubtedly get a marketing message heard by millions of ears, but chances are it will not see an immediate return on investment. The strange secret is that the podcasts that drive efficient performance are seldom those that show up on the iTunes top-10 list.
The same holds true for podcasts that may seem like a no-brainer for your business category. It's logical to think a widget company would see success only on podcasts that talk about widgets, but it's not necessarily the case. Maybe the widget podcasts are overpriced, or perhaps the reads aren't engaging. Maybe their download numbers are overreported. Most likely, there just aren't many people who want a whole podcast about widgets, so downloads never reach critical mass in a way that can help a business. You could spend all day managing a channel that gives two acquisitions per month. Whatever the reason, a podcast's subject is only part of the equation. It really comes down to the audience engagement, which is impossible to predict with CPMs and show descriptions alone. You need data.
Oxford Road has tested thousands of different podcasts from hundreds of network partners. We've found that you need to know which podcasts will drive conversion and those that won't. When evaluating which podcasts to test in the initial phase, first consider your demographic, and preferably work with a partner who can dig through an extensive cache of cross-client performance data to find the podcasts that will give you the best opportunity for success. Testing a wide variety of genres on proven shows will identify pockets of success that work for your business and set the stage to scale up in the next phase.
After determining your business is ripe to advertise on podcasts, let's get to the nuts and bolts. How many episodes per podcast do you buy, and how often should they run? The best practice during a test is three episodes per podcast, with a "one week on, two weeks off" cadence.
Why? Performance fluctuates wildly. While performance varies on each podcast in the test, performance teeters on the same podcast, episode to episode. A show may come out of the gate and crush performance goals on the first read and fail to drive a single conversion on the second. Often, the reverse is true. A show's performance will get better each time an ad airs. Running three drops will give you the clearest picture of the show's capabilities once the average response over the three episodes is identified.
Three episodes allows for course correction on hosts who may have had a weaker read in the first spot. Between onboarding hosts, setting up landing pages and sending product, a lot of time and effort was invested getting this thing off the ground. Running three or more episodes will give hosts a chance to optimize their reads and get comfortable selling the message to their listeners – and better results will follow.
Start with a "one week on, two weeks off" flighting strategy. Waiting two weeks between drops is helpful for a couple of reasons.
By the time the second drop happens, the tail from the first drop will have mostly subsided. You'll typically get 40-60 percent of your response in week one, and 30-40 percent in the next two weeks. Waiting two weeks between drops allows your response from the previous drop to come down close to leveling off before the next drop.
Second, having two weeks between drops gives you time to evaluate the host read and performance so you can chat with the host to optimize it if need be.
That's it! The simple ABCs of podcast advertising. Many shows behave differently for different advertisers, but these are best practices for a first test, as proven by millions of dollars of other people's money.