- CarMax is the biggest mover, ramping up their podcast investment from $59K to $1.037 Million.
Magellan AI notes that the auto category has been slow to spend on podcasts. At present, the auto category comprises only 2% of podcast spending; in 2019. this amounted to just over $14 mm out of $708 mm in U.S..
The auto industry’s relative slowness in embrace podcasting is rational. Other digital formats can target auto buyers with a granularity derived from Web searches, sites visited, and even gps data that places them at auto dealers. Within audio formats, both digital and terrestrial radio geo-target local markets and cover dealer spend very well — and have established attribution data.
As podcasting ad tech matures, however, the auto category represents a rich opportunity. The category’s overall radio spend was $2.7 B in 2019. With a level targeting and attribution field, the unique benefits of podcast advertising will make it an attractive space for Auto industry spend.
*Ad spend numbers sourced from Zenith Media and the IAB
On the heels of the iHeart/Triton deal, The Verge has a piece extolling the longer term competitive power of tech over exclusive content. While both are important, I’d flip the ticket. In digital media markets, over time, strong tech becomes a minimum competitive requirement and content becomes the difference maker.
This dynamic is playing out now in the SVOD OTT streaming market. Netflix started out with a big advantage in streaming tech. While others struggled, Netflix streaming was smooth, even over low bandwidth. Netflix early growth was driven by good tech, decent content, and little premium competition. Soon enough, Netflix recognized others would catch up and began to invest heavily in content. Netflix has spent multiple billions per year to license and create exclusive content – outspending even scaled media companies – and it has paid off.
Smooth streaming is now the norm among OTT video apps and UI/UX is good and improving. Netflix, Disney, HBO Max, Hulu, and the other main services are now competing primarily on content, and Netflix is still dominant.
In digital audio, the winners will all offer strong ad tech solutions and good streaming app UI/UX to listeners – such tech strength will be the minimum to compete. It will ultimately be exclusive content that attracts consumers, and consumers and exclusive audio content brands that attract advertisers.
The analogy is not perfect – the Podcasting industry is built on open platforms and has a history of free ubiquitous content. For better or worse, this will change as differentiating exclusives become common and branded distribution grows brand identity based on a well known podcasts. Spotify’s Joe Rogan deal, which will see Rogan disappear from iTunes and others, is the biggest example so far. The dynamic may play out slowly, but as ad dollars grow, not to mention the potential for consumer payment, investing in exclusive content will accelerate. Yes, most podcasts will still be available everywhere, and the long tail will be important. However, the top content layer will be determinative in the long run.
In it’s biggest Podcasting acquisition to date, iHeartMedia purchased full stack podcast tech provider Triton Digital from E.W. Scripps for $230M (Podcast Business Journal). In 2018 iHeart purchased Stuff Media for $55M and in the last quarter of 2020 Voxnest for $50M.
With all the consolidation in the industry, the buzz is about the main players including Spotify, iHeart and SiriusXM now having real audience scale to leverage their grown and acquired ad tech+sales+content. iHeart is the #1 podcast publisher in January 2021 by Unique Audience (29.1M), Global Downloads and Streams (254M), and, by far, Active Shows (539) according to Podtrac.
The Verge has a piece extolling the importance of tech over exclusive content in the competitive Podcast space in the medium to long run with some insight on the deal, and agreement on the premise from iHeart management. In the long term, I disagree. This perspective will change – eventually we will enter a market phase where tech capabilities become less differentiated among several big players and the battle to attract consumers and the listening Apps they download and favor will be driven by content. Content attracts consumers, and consumers attract advertisers. It’s up to all of the scaled players to deliver a great UI/UX to listeners, and appealing solutions to advertisers.
Between Spotify, iHeart and SiriusXM (includes Pandora, iHeart is trailing app/distribution. With a market cap just above $1B, it would be a cheap and interesting target for Apple or Amazon.
With the deal, E.W.Scripps has completed their shedding of Audio and Podcasting assets having sold Stitcher (including Midroll) to Sirius last June at an enormous profit. Scripps also did well on this deal having purchased Triton for $150M in 2018 (InsideRadio).
Edison Research published has published a Top 50 of 2020 podcasts list measured by audience size. The data is generated through ongoing consumer self-reporting surveys of podcast consumers 18+ years old as part of Edison’s Podcast Consumer Tracker.
The top ten are:
- The Joe Rogan Experience (Joe Rogan)
- The Daily (The New York Times)
- Crime Junkie (Audiochuck)
- This American Life (This American Life)
- My Favorite Murder (Exactly Right)
- Stuff You Should Know (HowStuffWorks)
- Office Ladies (Earwolf)
- Pod Save America (Crooked Media)
- Planet Money (NPR)
- Wait Wait…Don’t Tell Me (NPR)
The full list can be found here