PODCAST MARKETING – A new paradigm for the internet era

Article by- Priyanka Palit

Over the past century communication between organizations and their customers has changed drastically, which started from print, television, radio, phone and fax, and now the fastest medium yet, the Internet. The theory of Computer-Mediated Communication (CMC) has become a part of everyday life. Research has suggested that CMC is not neutral: it can cause many changes in the way people communicate with one another. It can influence communication patterns and social networks (Fulk & Collins-Jarvis, 2001), and leads to social effects. Rice & Gattiker (2001) state that CMC differs from face-to-face communication by limiting the level of synchronicity of interaction, which may cause a reduction of interactivity but CMC can overcome time and space dependencies. The technology of ‘podcasting’ is based on the theory of Time-Shifting, which is the recording of programs to a storage medium, to be viewed or listened to at a time more convenient to the consumer. ‘Podcasting’ can be considered to be a relatively recent addition to internet marketing which became very popular in late 2004. The term ‘podcast’ is actually a combination of two terms: ‘broadcast’ and ‘iPod’, the latter referring to Apple’s famous portable digital audio player. Podcasting is basically a method of publishing audio and also video content through the internet, which allows users to subscribe to a feed of new files, usually mp3.

Chris Anderson (2006) writes that niche markets are usually ignored by companies with million dollar budgets, since they have the resources to target a mass market. But with podcasts it is possible to target these audiences which are being ignored, giving way to the popular phenomenon of podcast advertising or ‘Podvertising’. According to Shel Holtz of Holtz Communication and Technology, the main difference between downloadable audio and podcasts is the subscription component. Podcasts allow people to subscribe and new shows are automatically downloaded as they are produced which internet radio does not allow. Apple’s integration of podcasting into its iTunes software in 2005 propelled the grassroots movement into the mainstream, which led to more than 1 million people subscribing to podcasts in the first few days. This was followed by Yahoo adding a podcast directory and consequently huge companies like BBC, NPR, Reuters, BusinessWeek, IBM, Virgin Atlantic, NASA, Whirlpool, Cisco and US Pentagon began to podcast. A podcast network can serve several purposes and sponsors can advertise across an entire network. A business topic need not mirror the company’s core business, but the topic should be relevant for their audience. Also, people have limited time to read a book, brochure or surf the Internet, but they definitely have time to listen while they are on the move, an important factor in contributing to the huge popularity of podcasts. For instance, Whirlpool started the popular American Family podcasts, where instead of talking about appliances they talk about family issues, presuming many families buy appliances rather than young single people, and this had indirectly led to a considerable increase in their sales. The Financial Aid Podcast gives advice on financial aid, personal finance and scholarships and more than 2300 people listen, which has resulted in $250,000 in loans so far, directly attributable to podcasting. Another example of successful advertising through podcasts may be Brother Love, a pop-rock singer and songwriter who talks about his experiences in promoting his music through his own podcast ‘Brother Love Notes’. Whenever he is playing a gig, podcasters play recordings of him asking fans to come to his show, and he believes this is the best way for upcoming artists to promote themselves. Recently in September’08, Vogue UK has also introduced its first podcasts as a part of its London Fashion Week coverage which will include backstage reports, summaries and comments from big designers, models and fashion celebrities, and will move on to cover the coming international fashion shows in Milan and Paris. And most interestingly, even the Queen of England started podcasting in 2006.

With podcast audiences are expected to jump 450% to 55 million by 2011, marketers are already warming up to the medium’s potential for advertising and research firm eMarketer expects the podcast ad market to grow to $400 million by 2011. The advertising charge in podcasting is currently being led by 3 sectors, mainly: technology, auto and media. New data from Podtrac and TNS suggests that podcasts may be a much more powerful advertising platform than television. According to their study of podcast advertising from February’06 to March’08 unaided awareness for podcast ads was 68%, as compared to the 21% for streaming video and only 10% for television. This is perhaps because people are tired of the continuous ads on television so they routinely time them out, resulting in podcast ads being upto seven times as effective as television ads. Similarly, many people who are listening to broadcast radio are not really paying much attention to the content in the first place and are quick to change the station. But for podcast advertising the user has already subscribed, downloaded and actively chosen to experience the content of the message, so the advertiser already has his attention. However, podcasting does appear also to have had a marginally positive effect on live radio listening, since 15% of the users claimed to have listened to more live radio after they began downloading podcasts. Again, while website viewers suffer many distractions at any given site, podcasts are frequently listened to and focused on while driving, exercising or commuting, so the listener is exclusively consuming one medium at a time. Podcast advertising is thus a lot less intrusive than other mediums of advertising, and also more targeted and relevant.

However, it is important to take a look at the challenges that are faced in the still niche area of podcasting. Leesa Barnes states in Podcasting for Profit: A Proven 7-Step Plan to Help Individuals and Businesses Generate Income through Audio and Video Podcasting (2007) that despite the growth of podcast advertising the number of companies advertising in podcasts to date is quite few. This is perhaps because they are scared of venturing into an unproven area, or are not convinced that their target market is entirely reachable through podcasts. Although iPod sales are unstoppable, regular podcast users are still hard to find.  Podcast distributions and viewing mechanisms are proliferating but even the most widely used podcasts have fewer than 50,000 downloaders. Among the challenges are finding ways of measuring, listening and buying ads on a medium that has so far been made up of small fragmented audiences. It has also been argued that podcasting is one way and there is very little conversation. It is true that podcasts are not as interactive as something like live radio but podcasters do read and play audio comments from previous shows even if is not in real-time. However, Tracy Sheridan’s brainchild Waxxi is a new kind of podcast where listeners can call in toll-free and participate in real-time conversation. As with many new learning technologies there are specific issues faced by podcasting which are mostly IT related, or related to time and cost. The IT related issues are the hardest to tackle, with problems such as blocked access to mp3 file downloads, lack of access to internet hosting sites for audio files, inability to get RSS feeds working or limited access to editing software. The listeners need to install a software or ‘podcatcher’ to start receiving podcasts and part of the solution is that podcasting uses RSS 2.0 feed standard, so many of the RSS readers have upgraded to support podcasts. Another long standing problem for podcast advertising is the business model, and trying to find advertisers to sponsor a podcast. Now new ad-insertion companies like Fruitcast, Podbridge and Podtrac are helping podcasters gain revenue by podcasting ads, with the companies keeping a certain percentage of the profit generated. There is also the difficulty of tracking podcasts beyond the number of downloads which lies in the portability of the files, for which podcast advertisers are turning to techniques such as custom 800 numbers or offer codes.

Paul Colligan (2006) claims that podcast will be as important to communication as was the printing press, although podcasting is not as much a technology as it is a massive shift in the focus of media’s power. Podcasting is now considered as a marketing tool that communicates, educates and drives listeners to action. Podcast advertising will be a larger market than blog advertising by 2010, projected to grow at a compound annual rate of 154.4%, and predicted to reach a total of $327.0 million in 2010, according to eMarketer surveys. According to Leo Kivijarv, Research Director for PQ Media, podcasting appeals to two target audiences which are crucial to advertisers: 18-34 year olds and the influential sector, since both are very engaged in content and advertising in the podcasts. Moreover, podcasting also, as an alternative media is benefitting from a general trend in the advertising market, which is the shift away from traditional marketing and advertising media to the Internet by brand marketers. Although podcast marketing is still a niche proposition in developing a deep brand relationship with well targeted consumers, eMarketer forecasts that spending on podcast advertising will increase nearly tenfold in the next five years, being the perfect storm of innovation in the technology, consumer and business forefront.

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