Ideas & Insights

Paradigm Shift: The Evolution Of Podcast Advertising
A Happy Podcast Listener

The history of advertising can be traced back thousands of years, but it’s really been over the last century that we’ve seen numerous paradigm shifts within the advertising space. 

From print to out-of- home, direct mail, radio, TV, digital and finally to mobile, each decade has introduced a new medium that has drastically altered the way advertisers strategize tactics to engage and activate customers.

Per Merriam-Webster, the definition of a paradigm shift is “an important change that happens when the usual way of thinking about or doing something is replaced by a new and different way.” From print to out-of-home, direct mail, radio, TV, digital and finally to mobile, each decade has introduced a new medium that has drastically altered the way advertisers strategize tactics to engage and activate customers. What has resulted is an incredibly complex and delicate ecosystem where advertisers are trying to balance reach, awareness, brand integrity, budget, profitability, revenue growth, measurement and a litany of other complexities that put pressure on them to always make the right decision in a seemingly zero sum game between competitors.

On cue, this decade has produced what we believe to be the advertising latest paradigm shift as we’ve seen the astronomical rise in the medium of podcasting from both a content creation and ad dollars perspective. Podcasts have been around for over 10 years, but it’s really been the last two-to-three years that advertisers have begun to allocate much larger portions of their marketing budgets to the channel, and the production of hosted content has proliferated globally. Ad dollars dedicated to podcasting will swell approximately 85% (compared to last year) to an estimated $220 million, and some individual brands are now spending well over $10 million solely in this channel.

 So why the sudden interest from advertisers? Simply put, advertisers have finally figured out that the channel works from both a growth and profitability perspective. But beyond that, there are four main reasons this channel is a very compelling medium to test.

The first, and arguably most important reason that podcast advertising has become so popular, relies upon a foundational tenant of marketing, blocking and tackling. Since show hosts endorse a specific product, they can’t recommend two products in the same category as it would dilute the authenticity and effectiveness of each endorsement. If you watch a football game, you will see three or four competing beer advertisers constantly rotating commercials throughout the game, but when you listen to a podcast, you will only hear one advertiser in any category due to the exclusive nature of the agreement.

 “Our clients love podcasts in large part because they can block out their competitors and lock up the show and hosts indefinitely. It’s a huge competitive advantage and a way to truly own an advertising medium,” says Steve Shanks, a partner at my agency, Ad Results Media, where we specialize in audio endorsement campaigns.
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