The Back Story

A blistering discussion on the subject of podcast advertising and statistics was started by Mark Hopkins who writes posts for a blog called Mashable. Mark opined that the problem with podcasting isn’t downloads in response to the news from Wizzard Media (owners of popular podcast host Libsyn) that they delivered a billion downloads in 2007.

Mark was venting about his own forays into podcast advertising deals.He tried a few different ad networks including Talkshoe, Podango and RawVoice. Mark was not happy with any of them for one reason or another. Talkshoe didn’t pay enough. Podango didn’t have the inventory. RawVoice didn’t pay him for enough downloads. Mark also tried to deal with Podtrac and Wizzard. Podtrac offered Mark no deals for a full year. Wizzard requires that you be hosted with Libsyn in order to take part in their ad deals. Definitely a very bleak picture of the landscape.

The Reality of Podcast Advertising

I am continually shocked at how people who have no or very little background in producing audio and video expect that they should be making good money via advertising deals. What reason do advertisers have to spend money on shows that have little track record and either small or non-responsive audiences?

I went to the future of online advertising conference last year and talk to people who are buying advertising on the web. They aren’t looking for podcast advertising. Web advertisers are looking for established brands, vibrant communities and engaged audiences. You can have all of those things with a podcast but you have to build them. It takes time. You can’t just say, “I’m doing a podcast,” and expect deals to come your way. How much time? I’m talking a year or more at the very least.

Many people don’t want to put in the effort required to do what is necessary to establish their shows as brands and communities with engaged audiences. Most podcasters are just doing a show. That’s fine. I fit into that category myself. But if you want to earn significant money from podcasting then you need to think bigger, put in more effort and invest more money. And even then it might not work out. There are no guarantees in business.

The Truth Is Rarely Popular

The truth is that if you don’t take the approach mentioned above then you don’t have too many monetization options for your show. If you’re great at selling then you can try your hand at affiliate programs and random links on your website. The people making the large money in podcasting are not doing it that way though.

Its also true that podcast ad networks like those mentioned above aren’t the best place to make money if you’ve got a large audience and/or have a strong brand. You need an agent who can go out and get you a real sponsor. Otherwise you’re just getting a deal that lumps you in with the pack at a group CPM rate. Not good if you have a stronger brand, bigger audience and more active response rate than other podcasts. You are probably better off finding independent representation or going out and selling the inventory yourself.

Your Audience Is Smaller Than You Think It Is

A brouhaha over the RawVoice statistics engine got started in the comments of Mark’s post. Mark thinks he should have gotten credit for more downloads than he actually did. I was working with RawVoice when this system was developed and I can honestly say that it is a good system. Angelo Mandato worked very hard to come up with an algorithm that made sense from both a technical and business perspective. Every hit on your media does not equal an audience member. And some clients may make multiple requests to achieve the download of a single file.

Podcasters generally like loose statistic programs that give them the benefit of the doubt. You have to be more scientific though if you want to make a business out of podcasting. And Angelo’s system is one that balances the business requirements of advertisers and the technical realities of tracking downloads.

Oh and by the way. The total downloads don’t mean anything anyway. If an advertiser runs a deal that gets them a million downloads with very little response, they are not going to renew for another go round. Advertising in new media is not about podcasters getting paid. Its about value delivered to clients who want to access those audiences. So you can cook up numbers that make the podcasters smile and you’ll be looking at the backs of your former advertising clients as they walk out on you.

A Word About Payment Timelines

Michael Geoghegan saw fit to take a swipe at RawVoice in a recent post because Mark Hopkins alleged that it took six months to get him paid for an ad deal. Mike is off base because he’s comparing apples to oranges and also doesn’t know the whole story.

RawVoice is not a venture capital funded company like all of the other players mentioned in Mark’s piece. This is a bootstrapped outfit with a small team and not too many resources. So while payments may turn around a little slower than other ad networks its partly because they have fewer resources to deal with the volume of information related to these deals. There is no ‘procrastination’ as Geoghegan alleges.

The other issue here involves how the ads are delivered and the verification process. RawVoice allows you to take part in ad deals no matter who you are hosting your media with. Of the other networks mentioned only PodTrac allows this. The RawVoice deals are not auto inserted either. So the host must insert the ad at the time of production This is good for the podcaster because they have a choice of hosts. But its tough in the back office because the advertisers require verification that the ads actually ran. The process involves actually listening to random shows to verify that the ads are being delivered. This is time consuming and sometimes delays the process of payment, especially if some podcasters fail to meet their contractual requirements. Sadly, that does happen from time to time.

On CPM deals download numbers must be verified at the end of the month as well. Angelo coded the RawVoice Statistics system to help streamline this process. This came online later in the year in 2007. So that should help ease the burden required to get the numbers to the advertisers for verifications. But RawVoice still allows podcasters who can’t use the stats redirect to take part in add deals. So I imagine that there will always be manual processing. This manual processing is good for the podcaster because they don’t get shut out on deals but requires manual effort and may slow down invoicing.

On both CPM and Cost Per Acquisition (CPA) deals the final hurdle before paying the podcaster involves receiving payment from the client. Sometimes you have to work through disputed numbers. At other times the clients have delays in making the payments. There’s not much that a small outfit can do to move an established company’s billing department. All small businesses deal with these sorts of issues.

Mike’s post infers that RawVoice is being lazy with respect to paying podcasters. I know that’s not true. I know that they are working very hard to put podcasters together with ad deals and get them paid. They don’t deserve that kind of accusation as there is no evidence that its true.

Disclosure

I was on the team at RawVoice from October 2006 to October 2007. I am no longer involved in day-to-day operations and did not communicate with anyone from RawVoice prior to writing this post.