Podcast Advertising
Episode Show Notes
Welcome to PodOn, the podcast where we share stories from other podcasters and talk with them about the challenges we all face when beginning the podcasting journey. If you are a podcaster, we would love to hear your story and your feedback. If you love this podcast, please subscribe and share it with your friends.
Today, podcasting has become a source of income for thousands of creators, so what’s their secret to land deals with sponsors? On this PodOn episode, we chat with Heather Osgood, True Native Media’s founder, and CEO. A long time podcast listener and head of a podcast representation agency, Heather is a passionate expert and leader of the advertising game in the industry. Listen now to learn all you need to know about the podcast monetization models, and how your podcast can transform into the desired environment for ads. Indeed, the podcast ad space is an ever-growing, exciting place to be!
Jump straight into:
(01:04) - On Heather and True Native Media’s mission to help podcasters focus on creating content - “The more I listened, the more I was perplexed at why there weren’t more ads in all of these shows.”
(03:52) - On the growing numbers of shows, audiences, opportunities and sponsors in the podcasting industry - “When we reach out, they no longer say ‘What’s a podcast?’, they say ‘Thanks for emailing because we’re interested in learning more’.”
(09:43) - Podcast Monetization 101: the power of host read ads and dynamic insertion - “They’re going to trust when the person is genuine about the product that they’re pushing.”
(15:48) - Excited about advertising? We are too! But reflect on this first. - “Take time to look at the flow, at the peaks and valleys of the content that you are creating, and figure out how to make natural transition points into ad reads.”
(20:16) - The importance of knowing and understanding your numbers - “You have to look at the tactic that you want to take to get advertisers.”
(23:08) - How to make your project desirable form brands - “If your show sounds bad, people aren’t going to want to sponsor it.”
(26:04) - How affiliate marketing is a great first step in the podcast revenue plan - “There are definitely really good affiliate partners out there, I’ve talked to a lot of podcasters that make a lot of money on those.”
(29:55) - How to determine if a brand will renew a partnership with your podcast - “Most advertisers that we work with, are evaluating the success of a podcast based on how many customers they get.”
(32:07) - Put a price tag! How to objectively determine your ad pricing. - “The more targeted your audience is, the more you can charge for it.”
(35:07) - The main differences between a network and a representation agency all curious, scrappy podcasters must know - “A good network really should be providing you with information about how to grow your show.”
Resources
Connect with Heather
PodOn is hosted by TJ Bonaventura and Julian Lewis, founders of the full-service podcast company based in San Francisco, StudioPod. If you want more details on how to record and produce your podcast with our services fully, you can reach us at http://studiopodsf.com, send us an email at info@studiopodsf.com or contact us through our social media channels as @studiopodmedia. Music by GaryOAKland.
Episode Transcript (via Rev.com)
Heather Osgood:
When I first started in advertising, I would literally call companies and be like, "Hey, are you interested in podcast advertising?" And they would be like, "What's a podcast?" Or, "I think I've heard of a podcast." And so, it's really great now that when we go out and we prospect to advertisers, when we reach out they don't say, "What's a podcast?" they say, "Thanks for emailing because we're interested in learning more. We've heard that podcasts are really amazing. Can you help us understand it better?"
Julian Lewis:
This is the PodOn Podcast.
TJ Bonaventura:
We're your host, TJ Bonaventura, that's me, and Julian Lewis.
Julian Lewis:
That's me. As founders of a podcast media company, we had to start a podcast.
TJ Bonaventura:
So join us each episode as we and our guests drop knowledge on podcasting for you, the curious and scrappy podcaster.
Julian Lewis:
Welcome back to the PodOn Podcast. Today we have a special guest, Heather Osgood, the founder of True Native Media. Heather, do you want to go ahead and introduce yourself to the curious and scrappy podcaster?
Heather Osgood:
Absolutely. Thank you guys so much for having me. I am, as you said, Heather Osgood, and I'm the founder of True Native Media, which is a podcast advertising agency. We've been in business for about four and a half years now. And we work with about 60 different podcasts, connecting them with advertisers. So, everything that we do is centered around how we can help podcasters create great content by selling ads on their shows.
Julian Lewis:
That's amazing. And the main reason why we wanted to have you on is because any podcaster that comes through the door at StudioPod, most of them are like, "How do I monetize? Like how do I make money off of this thing?" And so, we really want to center our time around that. But before we jump into that specifically, tell us a little bit about like why you started True Native Media and how you entered the podcasting landscape.
Heather Osgood:
Yeah, absolutely. So, I have a background in advertising. I started my career in radio ad sales and then moved to newspaper ad sales, and then founded a trade show production company. I had my trade show production company for almost 10 years. And when I sold that for kind of the first time in my adult life, I had some extra time on my hands, so I started listening to all of these great podcasts. And the more I listened, the more I was kind of perplexed why there weren't more ads in all of these shows.
Heather Osgood:
I knew that there were so many new podcasts coming online, and yet it seemed odd to me that when everything else on the internet was just so full of advertising, that there were so few ads in podcasts. So, I kind of looked around this space and found that while the top 1% of podcasts were represented well and full of advertising, there was everybody else. And my thought was, "Well, gosh, you don't need to have 50,000 downloads per episode in order to be attractive to an advertiser."
Heather Osgood:
So, I founded True Native Media specifically to help service that mid-level podcaster that was looking for advertisers. And I knew in my advertising background that most podcasters aren't interested nor do they have the time or the talents to go out and secure advertisers for their shows that I did. And so I wanted to help those podcasters monetize their shows and continue to have the resources necessary to create great content.
TJ Bonaventura:
That's amazing. And I think there's so many podcasters who are grateful for you making that jump and realizing that there is those folks who are middle of the road who are looking to find and monetize their podcast even if they're not the top 1%. Before we go into what advertisers are looking for out of podcasters, I want to go into just what have you seen in the last four and a half years as podcasting has grown into where we're at today?
TJ Bonaventura:
You know, it is beyond that stage of where now people are just dabbling in it. It is now becoming more prevalent with companies, more prevalent with everyday people, with everyone being home now, everyone is interested in wanting to do a podcast. But I'd love to learn what you have noticed in the industry over the four and a half years to where we're at today versus what you started?
Heather Osgood:
I think that podcasts really... It's been a fascinating journey for me, because it's been four and a half years but it feels like in so many ways that it's been 10 because the industry really has changed so much. I think one of the coolest parts about the podcast industry is how how close everyone is as an industry. And I think that because we all have so much love for podcasting, we want to see it succeed and develop. And so, it's really terrific to be able to network and connect with other people who are trying to get the industry up and off its feet and really flying and growing.
Heather Osgood:
I mean, it's amazing to me to think that we're nearing a billion dollars in ad revenue for the podcast industry, but when you compare that billion dollars in ad revenue to any other sort of advertising, a billion dollars is nothing, right? It's just a drop in the bucket. And I should remember the number, but I want to say that when I entered the space in 2016, that there was like, I don't know, maybe 300 million in ad sales that year.
Heather Osgood:
So, I mean, it's grown substantially. And I think the biggest changes that I've seen, number one, IAB Compliance has come on board, which has been a really important piece of how we calculate listenership and downloads. And what that has done is it's ensured that our numbers are more accurate. Before IAB Compliance, every hosting provider was calculating a download differently, and really the numbers were quite inflated. So, I want to say it was about the end of 2017 when a lot of podcasts lost a ton of listenership. And when I say that, I mean that in air quotes, because realistically they didn't actually lose listenership, they just got a more accurate number about how many people were actually listening to their show. So I think that was a huge step forward.
Heather Osgood:
I think the other parts that I have seen grow are, there's a lot more attribution tracking that's happening in the podcast advertising space now, where there are different platforms where we're able to see who's listened to a podcast. And then with pixel tracking, see which of those listeners are coming to an advertiser's website to either visit or make a purchasing decision. So, I feel like advancements like that have been really helpful to the industry.
Heather Osgood:
And I think there's also really just the growth of the quantities and the quality of shows out there has also really I would say accelerated, just the industry as a whole. And obviously, if you look at the reports, simply the fact that the average person is now much more aware of podcasts and what they are and listenership of course has grown every single year has been a big part of the growth as well.
Heather Osgood:
When I first started in advertising, I would literally call companies and be like, "Hey, are you interested in podcast advertising?" And they would be like, "What's a podcast?" Or, "I think I've heard of a podcast." And so, it's really great now that when we go out and we prospect to advertisers, when we reach out, they don't say, "What's a podcast?" they say, "Thanks for emailing because we're interested in learning more. We've heard that podcasts are really amazing. Can you help us understand it better?"
Julian Lewis:
And that brings up a great question in terms of the education level of advertisers. So you just mentioned like they're aware that it is an opportunity, but I guess what do you have to pitch to them or sell to them to convince them that like their dollar spent on a podcast is actually worth it for the return that they might get?
Heather Osgood:
Well, IAB just put out a report last week about the ad revenue that had been coming into the space. And they also tracked different details about the podcast advertising space. And one of the things that they found is that last year, 66% of ad reads were host-read. And for me, that's one of the very biggest selling propositions. And that host-read component actually increased from 2018 to 2019. So host-read ads make a huge difference.
Heather Osgood:
So, when we're approaching advertisers and we're trying to convince them to purchase into the space, we are selling them on the influence that podcasters can bring to their product, we're selling them on the connection that the host has with their audience. And it's not interruption marketing, like so much advertising is out there, it's really people love the shows that they listen to and no one ever just stumbles upon a podcast, you're very intentional with your listening. And when you've got a host-read ad that's going to be in that podcast, it's going to have a much better response than any pre-produced ads or interruption ads that are going to happen.
TJ Bonaventura:
I think it's not surprising, but I think it makes a lot of sense. And I think about it from my perspective if I'm listening to a podcast, I've now been conditioned to most of the ads that I read and I get attracted to the host-read ads, even the ones where, you know what? They may not even be putting the sponsor or the advertiser in the best light, but it's real, and it makes it more willing and funny for me to hear a host-read mess up an ad. I know Conan O'Brien does a lot of that, Bill Burr does a lot of that from a comedian standpoint.
TJ Bonaventura:
I want to take a couple steps back because our audience here for the PodOn Podcast is the curious and scrappy podcaster. So, I think for us in the industry, we know what a host-read ad is, but looking at the different types of advertising that you can do within your podcast, do you mind just giving us a little bit background of like, "Okay, well, we have a host-read, we have dynamic ads, we have post, mid, pre-roll ads." Can you just give us a quick landscape of what advertisers can do when they want to insert what they're advertising within a show?
Heather Osgood:
Yeah, absolutely. So, when we're looking at host-read ads, the definition of a host-read ad is an ad that is created by the host. So ideally it's not even scripted. So when we're working with an advertiser, we always encourage them to send us what we classify as talking points. So, what's the unique selling proposition of the company? Give us that, give us any special offers you have, but then let the host create their own unique SPIN on the product.
Heather Osgood:
Ideally, the product will have been sampled out to the host, so the host has had an opportunity to try that product, and then is able to speak in their voice about the product. And like you said, it doesn't necessarily have to be even sometimes in the best light, right? Because part of what we're trying to do is we're trying to create awareness of a product and memorability of a product. So, when you've got that host that's creating something that's funny or interesting, you're going to remember that far more than a very scripted ad read. So, ideally the ads should be host-read.
Heather Osgood:
And I feel like it's what separates us, podcast or from all the other opportunities to advertise out there. Now, there... So, like I said, 66% of ad reads right now are these host-read ads and they are predominantly what we have seen historically in the space. There are also certainly prerecorded ads that can be placed within your podcast. And there's a space where people are really trying to make ads that sound better for podcasting than a radio ad. There's also a layer of producer-read ads, so maybe the host doesn't do the ad read, but the producer does the ad read. So that feels more like a host-read, but it's not actually the host of the show.
Heather Osgood:
And then there are just pure programmatic, I don't even know who your podcast is, I've just got this prerecorded, most of the time, radio spot that I'm going to stick in your podcast. So, those are all opportunities and versions of ads within the space.
Heather Osgood:
Now, I know you brought up dynamic ad insertion, and I could probably do an entire podcast about dynamic ad insertion alone, but essentially, how podcast ads have traditionally been inserted in podcasts is they have been embedded in the audio file of an episode. So let's say I had Blue Bottle Coffee as a sponsor of my episode. I would record my podcast episode. I would record the ad read for Blue Bottle. I would stick them into that episode. Right? So, if we were going to talk about them in this episode, they would reach anyone who listened to just this episode.
Heather Osgood:
How dynamic ad insertion works is that instead of you stitching the ad read into the native audio file, you tell the computer, "I want my ad to run in these ad placements across my entire catalog." Now, I think one of the big misconceptions with dynamic ad insertion is that people feel like it has to be a prerecorded ad, but it can be a host-read ad just as easily as it can be a pre-produced ad.
Heather Osgood:
So, I still encourage people to look at it being a host-read ad, but if you can do dynamic ad insertion, it takes your ability to reach just one small piece of your audience with one episode and it gives you the ability to reach your entire listenership, because it doesn't really matter when content is created, it matters when it's consumed. So, if we have this ability to place these ads within your entire catalog during a specific time period, not only does it allow the advertiser greater reach, it also allows the advertiser greater flexibility because there's not an old stale ad that's been in an episode for six months that has an outdated product offering, maybe even talks about a product that's not even relevant or important to the company anymore. So that's the value of dynamic insertion, and I really believe that it's where the industry is headed right now, about 50% of the ads in the space are being inserted dynamically, and about 50% are embedded ad reads.
Julian Lewis:
I think that's so many great points. And you started the conversation talking about how it's not destructive, right? And then you talked about the fact that a host has the ability to experience the product before they read it. And I feel like that is the biggest difference about advertising. I've been in advertising between media sales, as well as media buying and planning for almost 15 years, and I'll be very transparent, and I've been very transparent is that I hate most advertising. However, I love it when it's additive to the experience. And if somebody, to your point, is going to listen to a podcast and going to listen to a host that they enjoy, they're going to trust when the person is genuine about the product that they're pushing.
Julian Lewis:
And I think the best example that I've ever heard is, MeUndies, there was an ad read from Bill Simmons on his podcast, where he was talking about... it was during the NBA finals, he was talking about how he was on the road. And he was talking about like how he's not going to have time to do laundry. And so, he essentially got like 10 pairs of MeUndies or whatever the number was that he used, and he was talking about how comfortable it was when he was traveling on the road. And it was just like very much in his voice. And I think that is so much the value of what podcasting brings. And so, I think just to pivot, it's just like, how do hosts or how do shows put themselves in a position where they can be "ready" for advertising?
Heather Osgood:
Yeah, that's a really good question. And I think just to follow up on the point you made, one of the things that I find absolutely fascinating about the podcast space is that when I had been selling radio ads or newspaper ads, if an advertiser came to us and said, "I want to spend $10,000, here's a bunch of money," we would say, "Great! Where can we put your ad?" Right? If an advertiser comes to a podcast and says, "Hey, I want to spend $10,000," the first thing the podcaster says is, "Tell me about your product. Do I want to endorse your product? Do I like your product?" And I am shocked at the number of times that podcasters will turn down advertisers.
Heather Osgood:
I say that with the utmost sincerity. Podcasts turn down advertisers all the time. And to me, the cool thing about it is that you know that when somebody is doing an ad read for someone, that they actually do really genuinely find the product interesting or they wouldn't be talking about it. So I think that that is really, really cool about the space. And as a podcaster, when you're looking to prepare yourself to receive advertisements, I think one of the first steps that I like to talk to people about is how are you formatting your podcast? Are you formatting it in a way that it is acceptable to take on advertisers?
Heather Osgood:
And I think one of the hard things about host-read ads is that a lot of times people just cram them in wherever they can put them, right? So it's like you're listening to a podcast and all of a sudden you feel kind of blindsided because you're interested in the conversation and then, zoom!, the next minute there's an ad read, right? And you're like, "Whoa, what happened?"
Heather Osgood:
So, I personally think that while, yes, we're trying to integrate the ad read into the content, we're trying to make it feel like it's part of the show. If you're doing an interview and all of a sudden somebody takes a breath and you insert an ad read, that's not really good formatting, right? That's not good production of your show. So if you really are thinking that you want to have ads in your show, my recommendation is to take time to look at the flow, look at the ebbs and flows, look at the peaks and valleys of the content that you are creating and figure out how to make natural transition points into ad reads. Because if you don't start there, I think it really does just disrupt your entire podcast.
TJ Bonaventura:
That's a really good point. Because I've started to notice with a lot of different hosts and podcasts that I've been listening to is they've taken almost an old radio approach. Well, they'll say, "We need to take a break," right? "We're going to take a break." But I appreciate that because it makes my skin crawl, to be honest with you, when I'm listening to a really good podcast, and some of the older podcasts are like this, for sure, especially in the true crime genre, where all of a sudden you'll just get slammed with an ad out of nowhere and you're like, "Whoa, what just happened?" I was driving, I was doing this, I was doing that, and all of a sudden you just get bombarded with an ad.
TJ Bonaventura:
So, I like that approach of just being a little bit more upfront, like, "Hey, we're going to take a quick break to hear from whatever," or, "Let's take a quick break," and then you just go right to the sponsor read. And it's the same host who's speaking. And then you know you're going to be served an ad. I actually appreciate that and I am now more genuinely interested in what the ad's going to be saying and what their approach is.
Heather Osgood:
Yeah, I agree. And I think the other thing that people need to realize is that you can creatively format your show so that you have different transitions. And my recommendation as you're creating your show, especially if you're getting started, and like you said, I mean, we talked about dynamic insertion. If you've been doing your podcast for three or four years and you didn't have it set up to take ads, that's okay. And you can insert them where it makes sense. And there's nothing wrong with that.
Heather Osgood:
But if you are starting your show out or you're just at the beginning phases of creating your show, why not set it up so that it makes sense for ads? And if you can create creative transitions through music and through just different transition tactics, you could transition from one segment to the next one, impactful part of the conversation to the next, and then you can also transition from content to ad, right? But if you have it set up correctly, it really, I think, benefits the listener and the advertiser.
Julian Lewis:
Definitely. So, I'd love to start to talk a little bit about the numbers. So you talked about not necessarily representing the top 1%, but kind of that middle. What classifies that middle in your eyes in terms of what True Native will work with?
Heather Osgood:
Yeah. That's an interesting thing to examine. And I think numbers are always super interesting and super tricky. Libsyn, I'm sure they have an updated one of these slides, but a couple years ago I saw a slide that said that if you have more than a thousand downloads per episode, that you really are in like the top 10% of podcasts.
Heather Osgood:
So I think, we look at these numbers and we think, "Gosh, I've got to get to 50,000 or 20,000 or whatever that number is," and it feels really daunting, but I always just like to encourage podcasters that if you are getting a thousand downloads per episode, you're doing phenomenally and you should congratulate yourself. And also you have to look at the tactic that you want to take to get advertisers. If you have the personal bandwidth to go out and secure advertisers for yourself, if you have a thousand downloads, go sell ads. I mean, there are plenty of people out there who would be interested.
Heather Osgood:
If you're looking to outsource that to a representation firm, or if you're trying to get advertisers by using maybe an ad buying platform, your numbers really do need to be a bit higher. So, we are looking at True Native Media for shows to have at least 10,000 downloads per episode, if they're doing the baked-in embedded ad reads, or if they're doing dynamic ad insertion we're looking for them to have 20,000 downloads per month.
Heather Osgood:
The other important point that I want to make is know your numbers. And I realize that sometimes the hosting providers can be a bit confusing, but it's so important to realize that if you are doing embedded ad reads, it doesn't matter how many downloads you're getting per month, it doesn't matter how many downloads your show has gotten to date, it only matters how many downloads each episode is receiving. Because as we mentioned earlier, the advertiser is only going to get in front of the listeners who listen to that episode.
Heather Osgood:
And while you of course can move to dynamic ad insertion, I would look to dynamic ad insertion as being more of a secondary growth phase, because it is more expensive, significantly more expensive typically to do dynamic ad insertion, you have to upgrade your hosting provider. And while maybe you're paying 20 bucks a month right now for your current host, when you move to dynamic you could be paying 200 and up to... I mean, we've got shows that are playing a thousand plus a month for their hosting. So, know your numbers. And if you're confused about your numbers, if you don't understand them, ask your hosting provider, ask someone because understanding your numbers makes a huge difference.
TJ Bonaventura:
Let's take a step back and let's say you're just getting started, right? And your goal as a podcaster is to monetize. What are some of the things that advertisers are looking for when it comes to things like consistency? When it comes to quality? When it comes to content? Obviously, advertisers aren't going to put their name on something that they don't believe in, or something that's like not going to be withstanding or long withstanding to the podcaster themselves. Do you get what I'm saying? Like, what are the steps podcasters can take from the early days to make sure that they are set up nicely to get advertisers?
Heather Osgood:
I think first of all you really need to look at your production quality. If your show sounds bad, people aren't going to want to sponsor it. And it doesn't take all that much effort to make your show sound good. So, if you listen to it and it sounds like you're recording in a metal tube or an empty room, or if you sound like you're 10 feet away from the mic, or your guest sounds really loud and you're really quiet, I mean, I hate to say that because it seems like an A, B, C of podcasting, but make sure your production quality is good.
Heather Osgood:
And then look at all of the other elements, because essentially a brand is saying, "I am partnering with you as a podcast," and they want to know that you are going to be a good ambassador for their brand. If they go on your website and it doesn't work, if they see your cover art and it's blurry, if they can't read your cover art because you have 10,000 words in it, I mean, take a look at all the things that you're doing and try to just make them be the best that they can be, because brands want to partner with podcasts that are going to be a good representation of that company.
Heather Osgood:
The other thing that's really, really important is understand your audience. Realistically, advertisers don't care what kind of content you're creating most of the time. I mean, certainly yes, if you're creating very explicit content, there are advertisers out there that are not going to want to partner with you. But I would say, by and large, the advertisers don't care about what you're talking about as much as they care about how well you're doing it, how it's being executed, and then you understanding who is listening to your podcast, because the brand knows who they're trying to reach. And if you are clear about who is listening to your show, then they'll be more likely to want to partner with you than if you're like, "Well, I think that my listeners are men and women, and they're old and young, and rich and poor," right? It's like you have to know specifically who is listening to your show in order for an advertiser to be interested. And that might mean running a survey, but use tactics so that you can really get clear on who your listener is.
Julian Lewis:
You and I talked before about affiliate marketing. And so, I want to talk about that because I feel like the way you presented it when we spoke was that that's like an easy way in the beginning to kind of going back to your point about building it into your show, where people can start to build that muscle of having ad reads but then also really start to train their audience like, "Hey, this is the part of the show in which I'm going to bring value to you through a partnership that I have." And it might not be that sponsorship dollar, but I'd love for you to talk a little bit more about kind of affiliate marketing and how people could potentially start there before they get that major MeUndies type deal that Bill Simmons has.
TJ Bonaventura:
And I think it'd be helpful too to understand what affiliate marketing is, what that means and how that's different from a traditional ad.
Heather Osgood:
Yeah, absolutely. So, essentially what affiliate marketing is, is when you partner with a company or a brand and you promote their product essentially for free and they pay you based on customers that you send their way. So, let's take Audible for example, is one we've all heard many, many ads for, and they've got a great affiliate program. So you can sign up for Audible to be an affiliate with them, and then you promote their product.
Heather Osgood:
And on their website, when you're signing up as an affiliate, you create your code, and then you would say, "Hey, go to audible.com/pod to receive your first free book or what have you." Right? And then when any of your audience members use that code at checkout, then Audible says, "Oh gosh, this podcast sent me an advertiser. They're going to get $25 or what have you." Right?
Heather Osgood:
So, of course each affiliate partnership is going to pay a different amount, some pay on a flat fee, some pay a percentage of them. I mean, there are some out there like BetterHelp, I want to say they give you like a $200 commission every time you send somebody their way. So, I mean, there are definitely some really good affiliate partners out there. And I've talked to podcasts that make a lot of money on affiliate ads. So, the cool thing about affiliate ads is that there certainly are different platforms where you can go and sign up and find a variety of different affiliate partnerships, but you don't have to sell anything, right? So you just go, you sign up, and then you promote that company as an advertiser.
Heather Osgood:
And Julian, to your point, my opinion is that if you want to get advertisers, a good place to start is with these affiliate partnerships. Because as we had mentioned, you formatted your show correctly to have these nice ad breaks. And then you get your audience accustomed to knowing that they're going to hear ad reads by reading these affiliate ads. And then you also get to know how responsive is your audience, right? So, you have those exact numbers.
Heather Osgood:
One of the things that's always super challenging with paid ads is that most advertisers are not going to tell you how many customers you actually sent their way. So, you have to guess whether it's successful or not, but when you run affiliate ads, you know for sure how many sales you're sending. So then you can create really great case studies. And as you're looking to move into paid sponsorships, you can say, "My audience responds super well to makeup. They respond super well to food products. And our track record is that when we partner with these types of brands, we have a conversion rate of X, Y, and Z." Those are the types of things that paying advertisers are really interested in knowing. So if you're able to really set these affiliate deals up, it's a good way to get yourself comfortable with how to work advertisers and ease into paid ad spaces.
Julian Lewis:
Yeah. I think that leads directly into my next question is, with these advertisers, what KPIs or key performance indicators are they focused on? It sounds like it's more performance than brand, but I'd love for you to touch on that as well.
Heather Osgood:
Yeah. And just in case any listeners aren't familiar, the difference between brand or performance or direct response is branded advertising or just ads that companies are running because they want to create greater awareness of their product. So that when you say their product name, you know for sure that people have heard of your product. So, Match.com, for instance, they told me once that they had like a 98% recognition. So that means if you went out and asked 10 people had they heard of Match.com, nine of those 10 people, or nearly 10 of those 10 people would say, yes, they knew what Match.com was. Right?
Heather Osgood:
So, running those branded ads is great because it's just creating greater awareness, but it's hard to get brand advertising because, especially in podcasts, there aren't a lot of stats or details about who exactly is listening, who exactly heard the ad, and things of that nature. So there's a lot of direct response ads in this space right now.
Heather Osgood:
Gosh, the latest report I saw, I think was... I want to say 64, 65% of all the ads in this space were direct response. So, that means that anytime you hear, "Go to Audible.com and enter promo code podcastcheckout," that's a direct response campaign. And really, all of those direct response advertisers are looking at how many customers you were sending their way, they want to know at the end of the day that they actually got a return on their investment. And so they're going to be tracking how many sales you're sending their way.
Heather Osgood:
And I mean, to be truthful, I would say most advertisers that we work with are evaluating the success of podcasts based on how many customers they get. So, if you're able to send customers their way, they're going to be happy. And if you're not able to send customers their way, then chances are they're not going to renew with you.
TJ Bonaventura:
You're giving us so many good points. Right now I'm hoping our listeners are finding this as valuable as we are. I want to get to the nitty-gritty. So, as a podcaster, you're starting your podcast, you're getting some traction, you have some advertisers in your podcast or in your show. How do you get paid? What are the cost of having ads in there? What are the different fees or costs that podcasters should be associated with, especially if they use a network or someone else is helping them find their ads? What are the different things or gotchas that our listeners should be aware of when they're getting to the point of having advertisers and they're getting paid out?
Heather Osgood:
Yeah, absolutely. Those are all really important questions. When you look at podcast ads, especially pricing of podcast ads, most people will have heard of CPM pricing, and CPM stands for cost per thousand. So, essentially how much is it going to cost the advertiser to reach a thousand people? And if you were to Google right now, what are average CPMs in the podcast industry? You would get somewhere between 18 and $50. Now, if you are a podcaster and you have a thousand downloads, are you really going to sell an ad for 18 bucks? No. Right? Like...
Heather Osgood:
So I think that in my opinion, unless your show is getting into the multiple thousands of listeners, typically a CPM pricing model is not the best route to go down. When you look to join a group of podcasters, whether that's a marketplace or a representation firm or a network, you really are going to be basing your pricing on a CPM model. Because part of what happens, like at True Native Media, if I go to an advertiser and I have 10 or 15 different shows that I'm presenting, I have to have some commonality of pricing, right?
Heather Osgood:
I have to say, "This show is going to be a $30 CPM, this one's a 25, that one's a 30." I can't say, "And this one's a $100 CPM," right? Like it doesn't work to do it that way. So when you are looking at joining a group of podcast, really you are going to have to get to that CPM model. But if you're selling ads individually, I feel that a flat rate is a better way to go. If you have a great Instagram account, if you've got a nice e-newsletter and you've got a podcast, package all of those together and create a nice campaign for an advertiser, where you're going to give them multiple touch points on your website, in your podcast, in your newsletters, in your social. Because then you could come to them and say, "Hey, this whole package is going to be $2,000," and it makes sense, instead of, "I have 500 listeners on my podcast. Give me 2000 for that."
Heather Osgood:
The other thing is when you're looking at pricing, you really have to look at your audience. And if you're reaching very difficult to reach people, if you're reaching doctors or attorneys or a very specialized field of people, you can charge a lot more for that than you can for, "Hey, I've got a comedy show, and I reach a broad range of people," right? So, the more targeted your audience is, the more you can charge for it. So take a look at that, and that is certainly a reality.
Heather Osgood:
And then when we talk about really looking at different groups, like you had mentioned, networks or representation firms, when you go through those types of places, typically to my knowledge, most networks will charge 50% of your ad revenue. So when you join a network, if they're bringing advertisers to you, you could look to pay 50% of what's coming into the network.
Heather Osgood:
The cool thing about networks is that if you're joining the right network, they can help you with cross-promotion and growth of your show, they can help you with maybe content creation, or even just auditing your show to give recommendations. So, joining a network can be a really positive thing. I certainly have talked to lots of podcasts who haven't always had the best experiences with networks as well. So, just do your homework before you join one. And then typically marketplaces or representation firms are going to charge about a 30% commission to sell ads. So you the podcaster would receive 70% and the representation firm would receive 30%. So those are some numbers for you.
Julian Lewis:
And just to clarify that the biggest difference between the network and the representation other than the difference in percentage, you mentioned that a network will almost be like more consultative, but I guess I want to make sure the curious scrappy podcaster understands kind of like the difference between the two.
Heather Osgood:
Yeah, for sure. So, the idea behind a network is usually that you're joining a group of podcasts that either has a similar genre as you, oftentimes if it's not a similar genre, it might be a similar target listener. So if... You know, we've all, or I would guess most people have heard of like different true crime networks. So if you're a true crime show and you join a true crime network, the cool thing is that if you are joining a network where you're within a group of all-sport shows, or all-business shows, or these different genres, then there's an opportunity for you to do cross-promotion.
Heather Osgood:
And like I mentioned, a good network really should be providing you with information about how to grow your show, they should be helping you with content ideas or... And it's not like they're going to sit down and create your content for you, but there's going to be somebody to bounce ideas off of. As an independent scrappy podcaster, if you're just somebody sitting in your closet by yourself trying to make your podcast, it can feel really lonely, right? And it can feel like, is there anybody out there? Is there anybody listening? What do people think of my show? Maybe you've got 20 reviews but they're all friends and family that you've encouraged.
Heather Osgood:
So, it can be a little bit daunting sometimes to not get that feedback. And I think the benefit of a network is that it does give you that. And I mean, a lot of networks do the ad sales as well. So, networks can address a lot of issues for people, but a lot of networks charge you a monthly fee to be part and they'll take a 50% pay or 50% of your ad revenue. So, they are not without cost.
Heather Osgood:
And the difference between that and like a marketplace or a representation firm, there are companies out there like AudioBoom or Cadence13 or True Native Media or AdvertiseCast, and those types of companies their sole job is to sell ads on your podcast. So, like all of our shows, I don't say, "Hey, I was thinking that maybe you could do a segment about wild animals next month or whatever," right? I mean, they create whatever they create, and we sell it. So, our sole job is to get advertisers for them. Of course, we're interested in the quality of the show. If it's not a good show, we're not going to want to sell it, but we're not giving them those really specific details, we're just focused on advertising.
Julian Lewis:
That's extremely helpful. Definitely a treasure trove of great knowledge that TJ and I are definitely... He was showing me notes on his phone that he's taking. I'm excited for the curious and scrappy podcaster to hear all these tips. So, Heather, where can people find you? Where can people follow you? I know for me personally, I'm connected with you on LinkedIn, and I love the videos that you post there, but where can people find you?
Heather Osgood:
Yeah, for sure. So, like you mentioned, I'm really active on LinkedIn. I try to create a lot of content for podcasters, just to give you ideas about how to improve your show and get advertisers. So, you can find me there just at Heather Osgood. You can also find me at truenativemedia.com. So if you're thinking you're interested in representation, we've got a little application you can fill out there.
Heather Osgood:
And the other thing that I'm really excited about is we recently launched heatherosgood.com. So, we created a course for podcasters to help them learn how to increase listenership and then sell ads themselves. So if you're a smaller show and you don't qualify for a representation firm, the course outlines from beginning to end how you can get listeners and advertisers. So, I'm excited about that at heatherosgood.com.
Julian Lewis:
Awesome. We're signing up.
TJ Bonaventura:
Amazing.
Heather Osgood:
Thank you guys so much. It's been so great to chat with you. And I'm glad that I could provide some insight and information. I hope it wasn't too overwhelming, I know there was lots of details, but the podcast ad space is an ever-growing exciting place to be.
Julian Lewis:
Most definitely. We really appreciate your time.
TJ Bonaventura:
Yeah. Thank you so much Heather.
Heather Osgood:
Thank you.
TJ Bonaventura:
PodOn. Every episode of the PodOn Podcast is produced and edited by StudioPod Media. For more information about our work and our clients, go to studiopodsf.com.
Julian Lewis:
Shout out to GaryOAKland for the Fire track.
TJ Bonaventura:
Gary O.
When I first started in advertising, I would literally call companies and be like, "Hey, are you interested in podcast advertising?" And they would be like, "What's a podcast?" Or, "I think I've heard of a podcast." And so, it's really great now that when we go out and we prospect to advertisers, when we reach out they don't say, "What's a podcast?" they say, "Thanks for emailing because we're interested in learning more. We've heard that podcasts are really amazing. Can you help us understand it better?"
Julian Lewis:
This is the PodOn Podcast.
TJ Bonaventura:
We're your host, TJ Bonaventura, that's me, and Julian Lewis.
Julian Lewis:
That's me. As founders of a podcast media company, we had to start a podcast.
TJ Bonaventura:
So join us each episode as we and our guests drop knowledge on podcasting for you, the curious and scrappy podcaster.
Julian Lewis:
Welcome back to the PodOn Podcast. Today we have a special guest, Heather Osgood, the founder of True Native Media. Heather, do you want to go ahead and introduce yourself to the curious and scrappy podcaster?
Heather Osgood:
Absolutely. Thank you guys so much for having me. I am, as you said, Heather Osgood, and I'm the founder of True Native Media, which is a podcast advertising agency. We've been in business for about four and a half years now. And we work with about 60 different podcasts, connecting them with advertisers. So, everything that we do is centered around how we can help podcasters create great content by selling ads on their shows.
Julian Lewis:
That's amazing. And the main reason why we wanted to have you on is because any podcaster that comes through the door at StudioPod, most of them are like, "How do I monetize? Like how do I make money off of this thing?" And so, we really want to center our time around that. But before we jump into that specifically, tell us a little bit about like why you started True Native Media and how you entered the podcasting landscape.
Heather Osgood:
Yeah, absolutely. So, I have a background in advertising. I started my career in radio ad sales and then moved to newspaper ad sales, and then founded a trade show production company. I had my trade show production company for almost 10 years. And when I sold that for kind of the first time in my adult life, I had some extra time on my hands, so I started listening to all of these great podcasts. And the more I listened, the more I was kind of perplexed why there weren't more ads in all of these shows.
Heather Osgood:
I knew that there were so many new podcasts coming online, and yet it seemed odd to me that when everything else on the internet was just so full of advertising, that there were so few ads in podcasts. So, I kind of looked around this space and found that while the top 1% of podcasts were represented well and full of advertising, there was everybody else. And my thought was, "Well, gosh, you don't need to have 50,000 downloads per episode in order to be attractive to an advertiser."
Heather Osgood:
So, I founded True Native Media specifically to help service that mid-level podcaster that was looking for advertisers. And I knew in my advertising background that most podcasters aren't interested nor do they have the time or the talents to go out and secure advertisers for their shows that I did. And so I wanted to help those podcasters monetize their shows and continue to have the resources necessary to create great content.
TJ Bonaventura:
That's amazing. And I think there's so many podcasters who are grateful for you making that jump and realizing that there is those folks who are middle of the road who are looking to find and monetize their podcast even if they're not the top 1%. Before we go into what advertisers are looking for out of podcasters, I want to go into just what have you seen in the last four and a half years as podcasting has grown into where we're at today?
TJ Bonaventura:
You know, it is beyond that stage of where now people are just dabbling in it. It is now becoming more prevalent with companies, more prevalent with everyday people, with everyone being home now, everyone is interested in wanting to do a podcast. But I'd love to learn what you have noticed in the industry over the four and a half years to where we're at today versus what you started?
Heather Osgood:
I think that podcasts really... It's been a fascinating journey for me, because it's been four and a half years but it feels like in so many ways that it's been 10 because the industry really has changed so much. I think one of the coolest parts about the podcast industry is how how close everyone is as an industry. And I think that because we all have so much love for podcasting, we want to see it succeed and develop. And so, it's really terrific to be able to network and connect with other people who are trying to get the industry up and off its feet and really flying and growing.
Heather Osgood:
I mean, it's amazing to me to think that we're nearing a billion dollars in ad revenue for the podcast industry, but when you compare that billion dollars in ad revenue to any other sort of advertising, a billion dollars is nothing, right? It's just a drop in the bucket. And I should remember the number, but I want to say that when I entered the space in 2016, that there was like, I don't know, maybe 300 million in ad sales that year.
Heather Osgood:
So, I mean, it's grown substantially. And I think the biggest changes that I've seen, number one, IAB Compliance has come on board, which has been a really important piece of how we calculate listenership and downloads. And what that has done is it's ensured that our numbers are more accurate. Before IAB Compliance, every hosting provider was calculating a download differently, and really the numbers were quite inflated. So, I want to say it was about the end of 2017 when a lot of podcasts lost a ton of listenership. And when I say that, I mean that in air quotes, because realistically they didn't actually lose listenership, they just got a more accurate number about how many people were actually listening to their show. So I think that was a huge step forward.
Heather Osgood:
I think the other parts that I have seen grow are, there's a lot more attribution tracking that's happening in the podcast advertising space now, where there are different platforms where we're able to see who's listened to a podcast. And then with pixel tracking, see which of those listeners are coming to an advertiser's website to either visit or make a purchasing decision. So, I feel like advancements like that have been really helpful to the industry.
Heather Osgood:
And I think there's also really just the growth of the quantities and the quality of shows out there has also really I would say accelerated, just the industry as a whole. And obviously, if you look at the reports, simply the fact that the average person is now much more aware of podcasts and what they are and listenership of course has grown every single year has been a big part of the growth as well.
Heather Osgood:
When I first started in advertising, I would literally call companies and be like, "Hey, are you interested in podcast advertising?" And they would be like, "What's a podcast?" Or, "I think I've heard of a podcast." And so, it's really great now that when we go out and we prospect to advertisers, when we reach out, they don't say, "What's a podcast?" they say, "Thanks for emailing because we're interested in learning more. We've heard that podcasts are really amazing. Can you help us understand it better?"
Julian Lewis:
And that brings up a great question in terms of the education level of advertisers. So you just mentioned like they're aware that it is an opportunity, but I guess what do you have to pitch to them or sell to them to convince them that like their dollar spent on a podcast is actually worth it for the return that they might get?
Heather Osgood:
Well, IAB just put out a report last week about the ad revenue that had been coming into the space. And they also tracked different details about the podcast advertising space. And one of the things that they found is that last year, 66% of ad reads were host-read. And for me, that's one of the very biggest selling propositions. And that host-read component actually increased from 2018 to 2019. So host-read ads make a huge difference.
Heather Osgood:
So, when we're approaching advertisers and we're trying to convince them to purchase into the space, we are selling them on the influence that podcasters can bring to their product, we're selling them on the connection that the host has with their audience. And it's not interruption marketing, like so much advertising is out there, it's really people love the shows that they listen to and no one ever just stumbles upon a podcast, you're very intentional with your listening. And when you've got a host-read ad that's going to be in that podcast, it's going to have a much better response than any pre-produced ads or interruption ads that are going to happen.
TJ Bonaventura:
I think it's not surprising, but I think it makes a lot of sense. And I think about it from my perspective if I'm listening to a podcast, I've now been conditioned to most of the ads that I read and I get attracted to the host-read ads, even the ones where, you know what? They may not even be putting the sponsor or the advertiser in the best light, but it's real, and it makes it more willing and funny for me to hear a host-read mess up an ad. I know Conan O'Brien does a lot of that, Bill Burr does a lot of that from a comedian standpoint.
TJ Bonaventura:
I want to take a couple steps back because our audience here for the PodOn Podcast is the curious and scrappy podcaster. So, I think for us in the industry, we know what a host-read ad is, but looking at the different types of advertising that you can do within your podcast, do you mind just giving us a little bit background of like, "Okay, well, we have a host-read, we have dynamic ads, we have post, mid, pre-roll ads." Can you just give us a quick landscape of what advertisers can do when they want to insert what they're advertising within a show?
Heather Osgood:
Yeah, absolutely. So, when we're looking at host-read ads, the definition of a host-read ad is an ad that is created by the host. So ideally it's not even scripted. So when we're working with an advertiser, we always encourage them to send us what we classify as talking points. So, what's the unique selling proposition of the company? Give us that, give us any special offers you have, but then let the host create their own unique SPIN on the product.
Heather Osgood:
Ideally, the product will have been sampled out to the host, so the host has had an opportunity to try that product, and then is able to speak in their voice about the product. And like you said, it doesn't necessarily have to be even sometimes in the best light, right? Because part of what we're trying to do is we're trying to create awareness of a product and memorability of a product. So, when you've got that host that's creating something that's funny or interesting, you're going to remember that far more than a very scripted ad read. So, ideally the ads should be host-read.
Heather Osgood:
And I feel like it's what separates us, podcast or from all the other opportunities to advertise out there. Now, there... So, like I said, 66% of ad reads right now are these host-read ads and they are predominantly what we have seen historically in the space. There are also certainly prerecorded ads that can be placed within your podcast. And there's a space where people are really trying to make ads that sound better for podcasting than a radio ad. There's also a layer of producer-read ads, so maybe the host doesn't do the ad read, but the producer does the ad read. So that feels more like a host-read, but it's not actually the host of the show.
Heather Osgood:
And then there are just pure programmatic, I don't even know who your podcast is, I've just got this prerecorded, most of the time, radio spot that I'm going to stick in your podcast. So, those are all opportunities and versions of ads within the space.
Heather Osgood:
Now, I know you brought up dynamic ad insertion, and I could probably do an entire podcast about dynamic ad insertion alone, but essentially, how podcast ads have traditionally been inserted in podcasts is they have been embedded in the audio file of an episode. So let's say I had Blue Bottle Coffee as a sponsor of my episode. I would record my podcast episode. I would record the ad read for Blue Bottle. I would stick them into that episode. Right? So, if we were going to talk about them in this episode, they would reach anyone who listened to just this episode.
Heather Osgood:
How dynamic ad insertion works is that instead of you stitching the ad read into the native audio file, you tell the computer, "I want my ad to run in these ad placements across my entire catalog." Now, I think one of the big misconceptions with dynamic ad insertion is that people feel like it has to be a prerecorded ad, but it can be a host-read ad just as easily as it can be a pre-produced ad.
Heather Osgood:
So, I still encourage people to look at it being a host-read ad, but if you can do dynamic ad insertion, it takes your ability to reach just one small piece of your audience with one episode and it gives you the ability to reach your entire listenership, because it doesn't really matter when content is created, it matters when it's consumed. So, if we have this ability to place these ads within your entire catalog during a specific time period, not only does it allow the advertiser greater reach, it also allows the advertiser greater flexibility because there's not an old stale ad that's been in an episode for six months that has an outdated product offering, maybe even talks about a product that's not even relevant or important to the company anymore. So that's the value of dynamic insertion, and I really believe that it's where the industry is headed right now, about 50% of the ads in the space are being inserted dynamically, and about 50% are embedded ad reads.
Julian Lewis:
I think that's so many great points. And you started the conversation talking about how it's not destructive, right? And then you talked about the fact that a host has the ability to experience the product before they read it. And I feel like that is the biggest difference about advertising. I've been in advertising between media sales, as well as media buying and planning for almost 15 years, and I'll be very transparent, and I've been very transparent is that I hate most advertising. However, I love it when it's additive to the experience. And if somebody, to your point, is going to listen to a podcast and going to listen to a host that they enjoy, they're going to trust when the person is genuine about the product that they're pushing.
Julian Lewis:
And I think the best example that I've ever heard is, MeUndies, there was an ad read from Bill Simmons on his podcast, where he was talking about... it was during the NBA finals, he was talking about how he was on the road. And he was talking about like how he's not going to have time to do laundry. And so, he essentially got like 10 pairs of MeUndies or whatever the number was that he used, and he was talking about how comfortable it was when he was traveling on the road. And it was just like very much in his voice. And I think that is so much the value of what podcasting brings. And so, I think just to pivot, it's just like, how do hosts or how do shows put themselves in a position where they can be "ready" for advertising?
Heather Osgood:
Yeah, that's a really good question. And I think just to follow up on the point you made, one of the things that I find absolutely fascinating about the podcast space is that when I had been selling radio ads or newspaper ads, if an advertiser came to us and said, "I want to spend $10,000, here's a bunch of money," we would say, "Great! Where can we put your ad?" Right? If an advertiser comes to a podcast and says, "Hey, I want to spend $10,000," the first thing the podcaster says is, "Tell me about your product. Do I want to endorse your product? Do I like your product?" And I am shocked at the number of times that podcasters will turn down advertisers.
Heather Osgood:
I say that with the utmost sincerity. Podcasts turn down advertisers all the time. And to me, the cool thing about it is that you know that when somebody is doing an ad read for someone, that they actually do really genuinely find the product interesting or they wouldn't be talking about it. So I think that that is really, really cool about the space. And as a podcaster, when you're looking to prepare yourself to receive advertisements, I think one of the first steps that I like to talk to people about is how are you formatting your podcast? Are you formatting it in a way that it is acceptable to take on advertisers?
Heather Osgood:
And I think one of the hard things about host-read ads is that a lot of times people just cram them in wherever they can put them, right? So it's like you're listening to a podcast and all of a sudden you feel kind of blindsided because you're interested in the conversation and then, zoom!, the next minute there's an ad read, right? And you're like, "Whoa, what happened?"
Heather Osgood:
So, I personally think that while, yes, we're trying to integrate the ad read into the content, we're trying to make it feel like it's part of the show. If you're doing an interview and all of a sudden somebody takes a breath and you insert an ad read, that's not really good formatting, right? That's not good production of your show. So if you really are thinking that you want to have ads in your show, my recommendation is to take time to look at the flow, look at the ebbs and flows, look at the peaks and valleys of the content that you are creating and figure out how to make natural transition points into ad reads. Because if you don't start there, I think it really does just disrupt your entire podcast.
TJ Bonaventura:
That's a really good point. Because I've started to notice with a lot of different hosts and podcasts that I've been listening to is they've taken almost an old radio approach. Well, they'll say, "We need to take a break," right? "We're going to take a break." But I appreciate that because it makes my skin crawl, to be honest with you, when I'm listening to a really good podcast, and some of the older podcasts are like this, for sure, especially in the true crime genre, where all of a sudden you'll just get slammed with an ad out of nowhere and you're like, "Whoa, what just happened?" I was driving, I was doing this, I was doing that, and all of a sudden you just get bombarded with an ad.
TJ Bonaventura:
So, I like that approach of just being a little bit more upfront, like, "Hey, we're going to take a quick break to hear from whatever," or, "Let's take a quick break," and then you just go right to the sponsor read. And it's the same host who's speaking. And then you know you're going to be served an ad. I actually appreciate that and I am now more genuinely interested in what the ad's going to be saying and what their approach is.
Heather Osgood:
Yeah, I agree. And I think the other thing that people need to realize is that you can creatively format your show so that you have different transitions. And my recommendation as you're creating your show, especially if you're getting started, and like you said, I mean, we talked about dynamic insertion. If you've been doing your podcast for three or four years and you didn't have it set up to take ads, that's okay. And you can insert them where it makes sense. And there's nothing wrong with that.
Heather Osgood:
But if you are starting your show out or you're just at the beginning phases of creating your show, why not set it up so that it makes sense for ads? And if you can create creative transitions through music and through just different transition tactics, you could transition from one segment to the next one, impactful part of the conversation to the next, and then you can also transition from content to ad, right? But if you have it set up correctly, it really, I think, benefits the listener and the advertiser.
Julian Lewis:
Definitely. So, I'd love to start to talk a little bit about the numbers. So you talked about not necessarily representing the top 1%, but kind of that middle. What classifies that middle in your eyes in terms of what True Native will work with?
Heather Osgood:
Yeah. That's an interesting thing to examine. And I think numbers are always super interesting and super tricky. Libsyn, I'm sure they have an updated one of these slides, but a couple years ago I saw a slide that said that if you have more than a thousand downloads per episode, that you really are in like the top 10% of podcasts.
Heather Osgood:
So I think, we look at these numbers and we think, "Gosh, I've got to get to 50,000 or 20,000 or whatever that number is," and it feels really daunting, but I always just like to encourage podcasters that if you are getting a thousand downloads per episode, you're doing phenomenally and you should congratulate yourself. And also you have to look at the tactic that you want to take to get advertisers. If you have the personal bandwidth to go out and secure advertisers for yourself, if you have a thousand downloads, go sell ads. I mean, there are plenty of people out there who would be interested.
Heather Osgood:
If you're looking to outsource that to a representation firm, or if you're trying to get advertisers by using maybe an ad buying platform, your numbers really do need to be a bit higher. So, we are looking at True Native Media for shows to have at least 10,000 downloads per episode, if they're doing the baked-in embedded ad reads, or if they're doing dynamic ad insertion we're looking for them to have 20,000 downloads per month.
Heather Osgood:
The other important point that I want to make is know your numbers. And I realize that sometimes the hosting providers can be a bit confusing, but it's so important to realize that if you are doing embedded ad reads, it doesn't matter how many downloads you're getting per month, it doesn't matter how many downloads your show has gotten to date, it only matters how many downloads each episode is receiving. Because as we mentioned earlier, the advertiser is only going to get in front of the listeners who listen to that episode.
Heather Osgood:
And while you of course can move to dynamic ad insertion, I would look to dynamic ad insertion as being more of a secondary growth phase, because it is more expensive, significantly more expensive typically to do dynamic ad insertion, you have to upgrade your hosting provider. And while maybe you're paying 20 bucks a month right now for your current host, when you move to dynamic you could be paying 200 and up to... I mean, we've got shows that are playing a thousand plus a month for their hosting. So, know your numbers. And if you're confused about your numbers, if you don't understand them, ask your hosting provider, ask someone because understanding your numbers makes a huge difference.
TJ Bonaventura:
Let's take a step back and let's say you're just getting started, right? And your goal as a podcaster is to monetize. What are some of the things that advertisers are looking for when it comes to things like consistency? When it comes to quality? When it comes to content? Obviously, advertisers aren't going to put their name on something that they don't believe in, or something that's like not going to be withstanding or long withstanding to the podcaster themselves. Do you get what I'm saying? Like, what are the steps podcasters can take from the early days to make sure that they are set up nicely to get advertisers?
Heather Osgood:
I think first of all you really need to look at your production quality. If your show sounds bad, people aren't going to want to sponsor it. And it doesn't take all that much effort to make your show sound good. So, if you listen to it and it sounds like you're recording in a metal tube or an empty room, or if you sound like you're 10 feet away from the mic, or your guest sounds really loud and you're really quiet, I mean, I hate to say that because it seems like an A, B, C of podcasting, but make sure your production quality is good.
Heather Osgood:
And then look at all of the other elements, because essentially a brand is saying, "I am partnering with you as a podcast," and they want to know that you are going to be a good ambassador for their brand. If they go on your website and it doesn't work, if they see your cover art and it's blurry, if they can't read your cover art because you have 10,000 words in it, I mean, take a look at all the things that you're doing and try to just make them be the best that they can be, because brands want to partner with podcasts that are going to be a good representation of that company.
Heather Osgood:
The other thing that's really, really important is understand your audience. Realistically, advertisers don't care what kind of content you're creating most of the time. I mean, certainly yes, if you're creating very explicit content, there are advertisers out there that are not going to want to partner with you. But I would say, by and large, the advertisers don't care about what you're talking about as much as they care about how well you're doing it, how it's being executed, and then you understanding who is listening to your podcast, because the brand knows who they're trying to reach. And if you are clear about who is listening to your show, then they'll be more likely to want to partner with you than if you're like, "Well, I think that my listeners are men and women, and they're old and young, and rich and poor," right? It's like you have to know specifically who is listening to your show in order for an advertiser to be interested. And that might mean running a survey, but use tactics so that you can really get clear on who your listener is.
Julian Lewis:
You and I talked before about affiliate marketing. And so, I want to talk about that because I feel like the way you presented it when we spoke was that that's like an easy way in the beginning to kind of going back to your point about building it into your show, where people can start to build that muscle of having ad reads but then also really start to train their audience like, "Hey, this is the part of the show in which I'm going to bring value to you through a partnership that I have." And it might not be that sponsorship dollar, but I'd love for you to talk a little bit more about kind of affiliate marketing and how people could potentially start there before they get that major MeUndies type deal that Bill Simmons has.
TJ Bonaventura:
And I think it'd be helpful too to understand what affiliate marketing is, what that means and how that's different from a traditional ad.
Heather Osgood:
Yeah, absolutely. So, essentially what affiliate marketing is, is when you partner with a company or a brand and you promote their product essentially for free and they pay you based on customers that you send their way. So, let's take Audible for example, is one we've all heard many, many ads for, and they've got a great affiliate program. So you can sign up for Audible to be an affiliate with them, and then you promote their product.
Heather Osgood:
And on their website, when you're signing up as an affiliate, you create your code, and then you would say, "Hey, go to audible.com/pod to receive your first free book or what have you." Right? And then when any of your audience members use that code at checkout, then Audible says, "Oh gosh, this podcast sent me an advertiser. They're going to get $25 or what have you." Right?
Heather Osgood:
So, of course each affiliate partnership is going to pay a different amount, some pay on a flat fee, some pay a percentage of them. I mean, there are some out there like BetterHelp, I want to say they give you like a $200 commission every time you send somebody their way. So, I mean, there are definitely some really good affiliate partners out there. And I've talked to podcasts that make a lot of money on affiliate ads. So, the cool thing about affiliate ads is that there certainly are different platforms where you can go and sign up and find a variety of different affiliate partnerships, but you don't have to sell anything, right? So you just go, you sign up, and then you promote that company as an advertiser.
Heather Osgood:
And Julian, to your point, my opinion is that if you want to get advertisers, a good place to start is with these affiliate partnerships. Because as we had mentioned, you formatted your show correctly to have these nice ad breaks. And then you get your audience accustomed to knowing that they're going to hear ad reads by reading these affiliate ads. And then you also get to know how responsive is your audience, right? So, you have those exact numbers.
Heather Osgood:
One of the things that's always super challenging with paid ads is that most advertisers are not going to tell you how many customers you actually sent their way. So, you have to guess whether it's successful or not, but when you run affiliate ads, you know for sure how many sales you're sending. So then you can create really great case studies. And as you're looking to move into paid sponsorships, you can say, "My audience responds super well to makeup. They respond super well to food products. And our track record is that when we partner with these types of brands, we have a conversion rate of X, Y, and Z." Those are the types of things that paying advertisers are really interested in knowing. So if you're able to really set these affiliate deals up, it's a good way to get yourself comfortable with how to work advertisers and ease into paid ad spaces.
Julian Lewis:
Yeah. I think that leads directly into my next question is, with these advertisers, what KPIs or key performance indicators are they focused on? It sounds like it's more performance than brand, but I'd love for you to touch on that as well.
Heather Osgood:
Yeah. And just in case any listeners aren't familiar, the difference between brand or performance or direct response is branded advertising or just ads that companies are running because they want to create greater awareness of their product. So that when you say their product name, you know for sure that people have heard of your product. So, Match.com, for instance, they told me once that they had like a 98% recognition. So that means if you went out and asked 10 people had they heard of Match.com, nine of those 10 people, or nearly 10 of those 10 people would say, yes, they knew what Match.com was. Right?
Heather Osgood:
So, running those branded ads is great because it's just creating greater awareness, but it's hard to get brand advertising because, especially in podcasts, there aren't a lot of stats or details about who exactly is listening, who exactly heard the ad, and things of that nature. So there's a lot of direct response ads in this space right now.
Heather Osgood:
Gosh, the latest report I saw, I think was... I want to say 64, 65% of all the ads in this space were direct response. So, that means that anytime you hear, "Go to Audible.com and enter promo code podcastcheckout," that's a direct response campaign. And really, all of those direct response advertisers are looking at how many customers you were sending their way, they want to know at the end of the day that they actually got a return on their investment. And so they're going to be tracking how many sales you're sending their way.
Heather Osgood:
And I mean, to be truthful, I would say most advertisers that we work with are evaluating the success of podcasts based on how many customers they get. So, if you're able to send customers their way, they're going to be happy. And if you're not able to send customers their way, then chances are they're not going to renew with you.
TJ Bonaventura:
You're giving us so many good points. Right now I'm hoping our listeners are finding this as valuable as we are. I want to get to the nitty-gritty. So, as a podcaster, you're starting your podcast, you're getting some traction, you have some advertisers in your podcast or in your show. How do you get paid? What are the cost of having ads in there? What are the different fees or costs that podcasters should be associated with, especially if they use a network or someone else is helping them find their ads? What are the different things or gotchas that our listeners should be aware of when they're getting to the point of having advertisers and they're getting paid out?
Heather Osgood:
Yeah, absolutely. Those are all really important questions. When you look at podcast ads, especially pricing of podcast ads, most people will have heard of CPM pricing, and CPM stands for cost per thousand. So, essentially how much is it going to cost the advertiser to reach a thousand people? And if you were to Google right now, what are average CPMs in the podcast industry? You would get somewhere between 18 and $50. Now, if you are a podcaster and you have a thousand downloads, are you really going to sell an ad for 18 bucks? No. Right? Like...
Heather Osgood:
So I think that in my opinion, unless your show is getting into the multiple thousands of listeners, typically a CPM pricing model is not the best route to go down. When you look to join a group of podcasters, whether that's a marketplace or a representation firm or a network, you really are going to be basing your pricing on a CPM model. Because part of what happens, like at True Native Media, if I go to an advertiser and I have 10 or 15 different shows that I'm presenting, I have to have some commonality of pricing, right?
Heather Osgood:
I have to say, "This show is going to be a $30 CPM, this one's a 25, that one's a 30." I can't say, "And this one's a $100 CPM," right? Like it doesn't work to do it that way. So when you are looking at joining a group of podcast, really you are going to have to get to that CPM model. But if you're selling ads individually, I feel that a flat rate is a better way to go. If you have a great Instagram account, if you've got a nice e-newsletter and you've got a podcast, package all of those together and create a nice campaign for an advertiser, where you're going to give them multiple touch points on your website, in your podcast, in your newsletters, in your social. Because then you could come to them and say, "Hey, this whole package is going to be $2,000," and it makes sense, instead of, "I have 500 listeners on my podcast. Give me 2000 for that."
Heather Osgood:
The other thing is when you're looking at pricing, you really have to look at your audience. And if you're reaching very difficult to reach people, if you're reaching doctors or attorneys or a very specialized field of people, you can charge a lot more for that than you can for, "Hey, I've got a comedy show, and I reach a broad range of people," right? So, the more targeted your audience is, the more you can charge for it. So take a look at that, and that is certainly a reality.
Heather Osgood:
And then when we talk about really looking at different groups, like you had mentioned, networks or representation firms, when you go through those types of places, typically to my knowledge, most networks will charge 50% of your ad revenue. So when you join a network, if they're bringing advertisers to you, you could look to pay 50% of what's coming into the network.
Heather Osgood:
The cool thing about networks is that if you're joining the right network, they can help you with cross-promotion and growth of your show, they can help you with maybe content creation, or even just auditing your show to give recommendations. So, joining a network can be a really positive thing. I certainly have talked to lots of podcasts who haven't always had the best experiences with networks as well. So, just do your homework before you join one. And then typically marketplaces or representation firms are going to charge about a 30% commission to sell ads. So you the podcaster would receive 70% and the representation firm would receive 30%. So those are some numbers for you.
Julian Lewis:
And just to clarify that the biggest difference between the network and the representation other than the difference in percentage, you mentioned that a network will almost be like more consultative, but I guess I want to make sure the curious scrappy podcaster understands kind of like the difference between the two.
Heather Osgood:
Yeah, for sure. So, the idea behind a network is usually that you're joining a group of podcasts that either has a similar genre as you, oftentimes if it's not a similar genre, it might be a similar target listener. So if... You know, we've all, or I would guess most people have heard of like different true crime networks. So if you're a true crime show and you join a true crime network, the cool thing is that if you are joining a network where you're within a group of all-sport shows, or all-business shows, or these different genres, then there's an opportunity for you to do cross-promotion.
Heather Osgood:
And like I mentioned, a good network really should be providing you with information about how to grow your show, they should be helping you with content ideas or... And it's not like they're going to sit down and create your content for you, but there's going to be somebody to bounce ideas off of. As an independent scrappy podcaster, if you're just somebody sitting in your closet by yourself trying to make your podcast, it can feel really lonely, right? And it can feel like, is there anybody out there? Is there anybody listening? What do people think of my show? Maybe you've got 20 reviews but they're all friends and family that you've encouraged.
Heather Osgood:
So, it can be a little bit daunting sometimes to not get that feedback. And I think the benefit of a network is that it does give you that. And I mean, a lot of networks do the ad sales as well. So, networks can address a lot of issues for people, but a lot of networks charge you a monthly fee to be part and they'll take a 50% pay or 50% of your ad revenue. So, they are not without cost.
Heather Osgood:
And the difference between that and like a marketplace or a representation firm, there are companies out there like AudioBoom or Cadence13 or True Native Media or AdvertiseCast, and those types of companies their sole job is to sell ads on your podcast. So, like all of our shows, I don't say, "Hey, I was thinking that maybe you could do a segment about wild animals next month or whatever," right? I mean, they create whatever they create, and we sell it. So, our sole job is to get advertisers for them. Of course, we're interested in the quality of the show. If it's not a good show, we're not going to want to sell it, but we're not giving them those really specific details, we're just focused on advertising.
Julian Lewis:
That's extremely helpful. Definitely a treasure trove of great knowledge that TJ and I are definitely... He was showing me notes on his phone that he's taking. I'm excited for the curious and scrappy podcaster to hear all these tips. So, Heather, where can people find you? Where can people follow you? I know for me personally, I'm connected with you on LinkedIn, and I love the videos that you post there, but where can people find you?
Heather Osgood:
Yeah, for sure. So, like you mentioned, I'm really active on LinkedIn. I try to create a lot of content for podcasters, just to give you ideas about how to improve your show and get advertisers. So, you can find me there just at Heather Osgood. You can also find me at truenativemedia.com. So if you're thinking you're interested in representation, we've got a little application you can fill out there.
Heather Osgood:
And the other thing that I'm really excited about is we recently launched heatherosgood.com. So, we created a course for podcasters to help them learn how to increase listenership and then sell ads themselves. So if you're a smaller show and you don't qualify for a representation firm, the course outlines from beginning to end how you can get listeners and advertisers. So, I'm excited about that at heatherosgood.com.
Julian Lewis:
Awesome. We're signing up.
TJ Bonaventura:
Amazing.
Heather Osgood:
Thank you guys so much. It's been so great to chat with you. And I'm glad that I could provide some insight and information. I hope it wasn't too overwhelming, I know there was lots of details, but the podcast ad space is an ever-growing exciting place to be.
Julian Lewis:
Most definitely. We really appreciate your time.
TJ Bonaventura:
Yeah. Thank you so much Heather.
Heather Osgood:
Thank you.
TJ Bonaventura:
PodOn. Every episode of the PodOn Podcast is produced and edited by StudioPod Media. For more information about our work and our clients, go to studiopodsf.com.
Julian Lewis:
Shout out to GaryOAKland for the Fire track.
TJ Bonaventura:
Gary O.