Oxford Road's Path to Brand Safety & Suitability

On Sunday night, Podcast lost a Founding Father.

Norm Pattiz, the architect of modern Network Radio who launched Westwood One in 1976 and pivoted to create Podcast One in 2013, passed away at 79. 

Like most Founding Fathers, Pattiz’s career was marked by the complexity of great deeds while daring greatly, enjoying the spoils, and of stories of a high-flying media mogul from a bygone era colliding with the values and expectations of our modern world. 

Tributes this week describe Norm as a “Pioneer,” “Innovator,” “Charismatic,” “Imaginative,” “Showman,” “Unstoppable,” “Always trying new things,” “Could see around corners,” “Crazy about his wife, Mary,” “Revolutionary.” 

Beyond his defining contributions to the radio and later podcast industries, Norm was chairman of the board of Lawrence Livermore and on the board of the USC Annenberg School for Communication and Journalism. He was appointed by President Clinton to the United States Broadcasting Board of Governors and reappointed by President Bush in 2002. In 2009 he was inducted into the National Radio Hall of Fame. 

Norm was a staple at Laker Games, always sitting Courtside across from Nicholson wearing something audacious, often attracting nearly as much attention as the players. 

At the time of publication, the author remembers Norm Pattiz as a friend. 

But it didn’t start that way. 

It was 2012, and after six years of poking at the budding universe of on-demand audio, I was looking for a way in. I served as a foot soldier in Clear Channel’s army (now iHeartMedia), selling and managing local radio campaigns. I knew the field was ripe for disruption and believed to my core that Podcast would be the answer, and I couldn’t find a way to make a living at it. 

Then I met Adam Carolla. He was doing a hit on a local radio broadcast to plug his new podcast venture in a studio a stone’s throw away from my desk. He was the first household name to leave traditional media behind and go all in on the new platform. And he was right down the hall at Clear Channel. So I waited until he finished and pitched to get permission to sell sponsors into his show as he walked to his car.

We ran a few tests, and the ads worked like magic for our clients. 

Along with my trusted associates Gary Brown and Miranda Romano (still key leaders at Oxford Road), we began a cold outreach campaign to any podcasters with enough published reviews on apple to suggest a marketable audience. Then I saw the headline that former radio colleague Kit Gray had teamed up with Radio Industry Titan, Norm Pattiz, to launch a new venture organizing an independent network to turn this fledgling forum for audio hobbyists into an entire industry. 

When Norm Pattiz entered the podcast arena, it was a shot across the bow. He locked up Adam Carolla in a representation contract as the cornerstone of his new network. Despite our efforts, there was no getting around Norm Pattiz and PodcastOne.

I had heard stories about Norm, the radio legend, and I instantly believed they were all true the moment we met. He was intimidating. Like the legends of old Hollywood powerbrokers who might say, “You’ll never work in this town again” if you crossed them. His assistant would call you and say she had Norm Pattiz on the line. But when we spoke about the business, he was focused, measured, and saw imaginative paths to a win-win. 

I accepted the new reality without any alternative options, and we started conducting business in good faith. 

Norm always delivered. He and his team worked with us to ensure client objectives were met while adding a pinch of old-fashioned Hollywood razzle-dazzle. The guy had first-class taste and the resources to create experiences that caused bonds to form between Network, Talent, Agency, and Client. The consummate showman, he taught me how we could do serious business and still have some fun. He had a bit of PT Barnum in him and modeled ways to stand out in an industry I’m still trying to digest. He was also funny and enough of a rascal that age wasn’t a burier to the relationship. 

Norm was not for everybody, but he was definitely for me. He has his fingerprints on the success of our agency and supported us as we rose from a struggling startup to the leading independently owned audio agency in the world. Over time, I got to know Norm better. I respected what he was able to achieve in our industry and found him very accessible in giving me advice on what it meant to run a business. 

He made his way into my heart most deeply as a true friend to Oxford Road and me in a time of need. After a few years of meteoric growth at Oxford Road, we entered a season of growing pains that introduced new challenges I had never experienced. Norm ended up on my business 911 list and graciously guided me out of some jams, for which I’ll be eternally grateful. 

Norm Pattiz believed in me. He would invite me to guest on shows and panels. When the pandemic hit, I started a new podcast for marketers to help guide them through uncharted waters. Lke many partners, Norm came on the show as an early guest when we didn’t have the audience to justify his time. Not only did he come on, he also contacted me after and invited us to join his network, knowing full well our niche focus would never be a real money maker. That’s why today Media Roundtable is part of the PodcastOne network. 

Norm was a visionary. Like Cornelius Vanderbilt moving from shipping to rail at 70, he left the industry where he had made his fortune because could see change was in the air. Podcast would disrupt Radio and become the digital beachhead to revitalize the industry, and he saw that years before his radio peers.

Pioneers are generally complex people, and Norm Pattiz was no exception. But if you want a revolution, you need to accept complex people as friends. Hopefully, they’ll accept your complexities too. 

If you work in the podcast industry or even listen to podcasts, you should know that Norm Pattiz was the first true Captain of Industry to step onto the field. In his final act, he rolled up his sleeves and poured the concrete for the roads we’re now walking on.  

Norm positively impacted millions of people, and I will raise my hand and say he made my life better through his generosity, wisdom, and friendship. 

Farewell, my friend. May your voice forever echo.

Dan

$5K is not enough budget to test into a new media channel. It might be enough to test a single tactic within an existing channel. The effectiveness of this is doubtful unless you have an incredibly high conversion rate from a low AOV, a free offering, or a top-of-funnel vanity metric (which is another topic altogether).

For the rest of the brands with revenue-based measures of success, a $5K budget is like using a drop of paint on a wall to determine its dried shade.

New media channels are a gamble. To balance risk and upside, structuring a test with an outcome in mind and spending as little as possible to understand the viability of a campaign, via both performance and scale is responsible.

Early in my customer acquisition career, I was so excited to test everything emerging under the sun. Back then I had to pass on most deals larger than five figures because my more experienced management did not see the upside of what I thought was a nominal risk. So, I had to stay under that figure or make a compelling case for anything greater.

Why? Because I chose not to focus on pushing what is working in favor of the shiny or grass is greener for further growth.

The greater budget freedom was not available to me because I struggled to put together a strategic rationale that explained why X was a better use of resources than Y.

I was ahead of the curve in quantifying funnels (or customer journey) and measuring performance, but could not explain why the gamble was worth a five-figure bet in a manner that demonstrated upside.

As a result, I spent too much time testing networks and platforms that did not have minimums.  Hoping the immediate performance was close enough to our average performance to increase our investment. When it did, I would graduate the channel from my bench into my core mix. When it didn’t and was more often the case, I’d still consider coming back to the channel when there was a material difference between their product and ours.

Like most MLB batters, tests converted in the typical 25% range, so I would reference the difference between an all-star (.300 batting average) and a failure (the “Mendoza line” of .200).

Today, a round minimum figure to test a media channel is too often used to justify required FTEs in order to make sure the brand is taken seriously.

In a rational world, a minimum test budget is a byproduct of bespoke brand KPIs calculated from a bottoms-up approach. I understand a media channel or agency’s cost of doing business, but it shouldn’t come at the expense of their future growth from the brand.

A publicly traded ad platform prompted this rant. They said $5K was enough to test. And in Q4! The brand’s media agency agreed. I requested their forecasted results and what went into the figure. None were used. Just that $5K is enough to test. I couldn’t resist asking what AOV they used in their forecast. When they shared it was 20% of ours, they assured me that their recommendation remained valid.

A month after the test concluded, a campaign recap was not put together to tell its story and how less than the minimum amount was actually spent. The test was a waste of everyone’s time involved because we have inconclusive results of whether or not this channel could be viable.

Still, it stands to reason that a minimum ought to be brand-specific because if your measurement of success is a purchase with a high AOV and lower conversion rates, your minimum will be more than that of a brand with a greater conversion rate (because of a lower AOV or other reasons).

$5K is not enough, in fact, after years of experience, $50K is really not enough to test something like audio. In fact, audio may be one of the less expensive alternative mediums to test into due to creative production costs.

If I could manage my younger self, I would model forecasted results from the bottom up with comparable, actual conversion metrics. Then, incorporate the media channel’s average CPMs, CTRs, and other metrics, creating a red flag when the outcome likelihood of success is out of whack.

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.