Here's What We Need to Do in 2022

By: Dan Granger

A neon sign hangs in our office that reads, “Here’s What We Need to Do.” At Oxford Road, our agency business depends on us being a consultancy as much as a service provider. So the quality of our recommendations is the most valuable asset we bring to the market. Besides, everyone has already put out their ’22 predictions, and predictions are only as good as the action they spark. We’re in the performance business and much more concerned with outcomes, so let’s try something new. 

These are the seven key initiatives that would demonstrably expand and optimize the podcast industry in 2022 presented as headlines we wish would be published before this time next year: 

1. Top Podcast Networks Join to Create Standard Disclosures for the advertising community

With hundreds, if not thousands, of shows and networks all making up their ad policies and few actually publishing what they have for the advertising community, media planning is much more arbitrary than anyone would like to admit. Several major networks create policies and do not notify their ad partners until an Insertion Order has been rejected for reasons never disclosed. How do you value a program based on CPM when there is still no consistency in reporting features like unit load, unit type, unit length, or talent engagement? Networks would benefit from a more informed buying community and justify premiums applied to different content and ad units. Here are some of the items we’d like to see uniformly published for media buyers:

• Standardized unit classification between produced ads, producer voiced, Talent Voiced, Talent Endorsed, Baked-in, and Dynamically inserted
• Ad Load disclosures sharing unit length of ad units per hour
• Separate pricing schedules for pre-rolls and mid-rolls, respectively
• Clear lines of Demarcation between shows that focus on News vs. Opinion
• Talent levels of involvement in ad campaigns (e.g., “Approves sponsors, willing to use advertiser offerings personally, joins onboarding discussion, wants campaign feedback…”)
• Standardized exclusivity policies, so advertisers know if you allow competitors to have ads voiced by the same talent on the same program

2. Host Read Ads Include Category Exclusivity as Standard Feature

Host has a credible relationship with their audience. Host refers products and services to this community of trusted followers. Trust is transferred while ad resonance and response rates soar. This is nothing more than a feature in Radio, but host endorsements are the whole ballgame in Podcast. This is what propelled the business from zero to $1B+.

Now leading networks are trying to walk this back and not in a clever way.

In many cases, you can now purchase a Host-read ad placement. Want category exclusivity? You’re gonna pay extra for that. That effectively means that networks are willing to rent out the credibility of talent. Still, if you don’t pay an additional premium, they might just endorse your direct competitor in the following episode. Never mind how frustrating this is for advertisers; just think about how destructive this is for the hosts they represent. If I tell you to take my recommendation and purchase a Moink Box in one breath and Butcher Box in the next, what does that say about my integrity and trustworthiness as a recommender of goods and services?

We have forecasted for years that Radio and Podcast would morph into one another. Indeed, there will continue to be a greater emphasis on courting large brands to place big buys using only produced ads, without the risks associated with Influencer marketing. But as a performance marketing agency, we know empirically that the best-produced ads can only perform at a fraction of what a host endorsement can provide. Host endorsements should cost more and often justify the $40+ CPMs we currently see in the marketplace. But you cannot cheapen the golden goose. You must protect categories for a reasonable period (think 90 days+) for talent to maintain credibility. The new dominating forces in this industry have not yet accepted that you cannot scale double-digit CPMs for ads that are not host read. So the alternative to the endorsement ad is overpriced by hundreds of percentage points. Until this gets straightened out, large companies who paid hundreds of millions to acquire buzzy networks will continue to undermine trust in the marketplace by allowing talent to self-sabotage the relationships they have built with their audiences, imagining that trust can be diluted without consequence. It cannot.

3. Networks Drop “Forced Combo” on All Ad Buys

How would you like if all restaurants required that you purchase a pre-set menu or nothing at all? How would you like if Amazon would not allow you to buy individual items unless you bought a bag of other goods they want you to purchase, even if you don’t want them? Unfortunately, this is now standard practice for leading networks refusing placements on individual shows unless you also buy their leftovers. In some cases, smaller shows are not allowed to be purchased ala carte unless accompanied by a more considerable buy across a network. Worse, struggling creators are being denied monetization because some sponsors desirous of their offerings are required to purchase other shows, even if unwanted. Friends, this is crazy. As a buyer, it makes good sense that volume placements unlock discounts, while one-off purchases command a premium. However, to require customers to buy more than they need or want is bad business and entirely unsustainable. Networks would do well to proactively change these abusive policies before more press, and more of the market takes note of it, as this current fad is greedy and shortsighted, leaving a bad taste in the mouths of would-be purchasers.

4. Local News Outlets Join Together to Form Regional Podcast Networks

With the rise of digitally native publishers like Axios launching local news initiatives and movements like Protect Our Press advocating for efforts to save the industry, local media publications should band together, even with competitors, as a joint venture to launch regionally focused podcasts. Local didn’t make sense for many years when Podcast reach was too small to succeed in local markets. Still, as we go from being a newly minted Billion Dollar Industry to becoming a Multi-Billion Dollar Industry, these efforts will become much more viable. Either local news brands will create it themselves, or national brands will launch local initiatives. Of course, enough infrastructure already exists through local radio. Still, there does not seem to be a cohesive strategy binding together regional voices and providing more significant opportunities for scale among local advertisers, who are still holding their dollars on the sidelines. Legacy radio companies were slow off the starting block with podcasts and are now working feverishly to transition into the new world. It’s not too late for them to leverage their success in amassing local resources yet, but it will be soon.

5. Meta launches Promotion Tools, Allowing Creators to Grow Audience Through Facebook Ads

Whatever you may feel about Meta (Facebook/Instagram), its advertising policies, or the privacy challenges that are crippling ad spending, it’s still Podcasts’ most viable potential growth channel. With more than half a million creators actively making shows, there is a robust and fertile market desperate for new ways to grow their audience. New reports are sharing that even the frenzy of large shows and network acquisitions over the last few years is not yielding enough hits to satiate creators and investors. Facebook has the potential to stay in their wheelhouse by doing what they do best; making it easy for marketers to efficiently deploy significant ad dollars to produce measurable outcomes. While it’s interesting to watch them get into the Podcast game as a distribution platform, to break into the platform wars and stand out from Spotify, YouTube, Amazon, and Apple, they’ll need a competitive advantage. Ease of promotion would do just that. Meanwhile, it would significantly expand the industry’s addressable market by helping slower adopting users engage with the channel. All this would open up massive new and diversified revenue streams as networks, and independent creators outspend each other to build their audience and create an edge over the competition. YouTube has similar capabilities, except that Facebook’s ability to embed shows that you can listen to while scrolling through your feed allow for a level of scale that would be transformative for the industry.

6. Top Podcast Companies Offer Airchecks and Transcripts Standard for All Advertisers

Perhaps I am biased because I started my career in local radio sales and had to manually pull and share all airchecks with paying advertisers as proof of purchase and quality control. But when you buy something, there should be a receipt. And when you purchase something bespoke, there should be quality control measures in place to make sure your widget was delivered as ordered. So why do our industry manufacturers largely leave it to their customers to provide quality insurance for the items they purchase? I am confident this is too obvious an issue to belabor, and that reason will prevail over time. But these are the types of problems that make the industry less user-friendly than expected and receive elsewhere in the advertising community. The fact that most ads are customized with each insertion introduces a level of complexity that many may choose to ignore but cannot ignore forever. Creators and networks would do well to agree on a transcription and aircheck process. This process should include a quality report showing that expected language was delivered properly in purchased ads and that excluded language was not. To get a jump on this, you can reach our transcription partner here.

7. Podcast Industry Gets Serious About Brand Safety, Releases Content Ratings

It’s enough that Podcast is another user-generated media Ecosystem with no FCC involvement, no standards and practices, and virtually no known corporate policies allowing brands to take comfort (or at least shift blame in times of controversy). While we’ve written, spoken, and created protocols ad nauseam to help brands navigate the terrain, it’s time for the creators, networks, and platforms to start getting serious if they want to continue courting larger ad spenders. How can blue-chip advertisers feel safe trafficking ads on content recorded on a computer and uploaded without any content filters whatsoever?

Networks could band together and create our industry’s version of the Motion Picture Association Ratings. Hopefully, something even more robust so that brands could match their standards and values with like-minded content. Even better would be meaningful tools to offer a Values-based planning approach to brands based on things like the GARM Brand Safety Floor and Suitability Framework. With so many available transcription tools and advancements in AI and Sentiment Analysis, technology exists to make this a reality in 2022.

Through Oxford Road, we have already created or are in the development of some of these solutions for our clients and will have updates to announce throughout the year. Others are of high interest but not yet on our road map for development and execution. If you read something that connects, I invite you to reach out to me to discuss. We’re happy to collaborate with anyone who wants to protect and evolve our industry.

Dan

P.S. Disclaimer: The recommendations above include industry developments that may financially benefit Oxford Road, the ad agency which publishes, The Influencer, and its interests in companies that provide solutions to the podcast industry.