What you need to know:

• According to Commercial Radio Australia (CRA), podcasts are on track for 53 per cent YoY audience growth with 26 per cent of the population now regular listeners.
• Despite the growth, there is still no formal measurement metric, with the CRA only releasing a monthly podcast ranker - which omits monthly download numbers.
• Sources told Mi3, most radio networks sell ad space based on the popularity of talent rather than audience, which is causing significant fluctuation in CPMs.
• Media agency buyers say while not yet a dealbreaker, the audio sector needs to develop a unified metric if it wants investment to increase on par with audiences.

While other media are watching pandemic-fattened audiences fall away and wondering how to make good, podcasting has had a massive 12 months, notching 53 per cent audience growth to 43m downloads a month. A quarter of Australians are regular listeners per Commercial Radio Australia (CRA) data, with a further 37 per cent of the population listening at least once a month, according to Edison Research.

The problem is, the money hasn’t followed at the same rate. While some of this is due to legacy issues and relative market immaturity, a key factor is the fact nobody has access to a complete picture of audience numbers for individual podcasts – which is what many buy against.

To date, CRA and its data partners refuse to release those numbers.

One radio executive told Mi3 podcasts are sold based on talent and popularity, not audience metrics. That can cause "wild" fluctuations in audience costs, with CPM variances of $30 to $130. In some instances, particularly with radio show hosts that have their own podcasts, CPMs can be five times higher on digital audio platforms than linear counterparts.

Some people are prepared to pay those premiums, but others are not and for now, advertiser investment growth in the booming channel lags behind its TV counterpart, broadcast video on demand.

Top 100

Media buyers say lack of measurement is a fundamental reason why some brands are only dipping a toe into the water.

One solution would be for CRA to allow agencies more transparent access to its top 100 podcast data and provide them with basic metrics, like total downloads per show.

The radio industry body has not yet done so. CEO Joan Warner told Mi3 that podcasting is growing by "leaps and bounds". As adoption accelerates and reaches scale, "advertisers will follow", she suggested.

“The Australian Podcast Ranker was the first independent report on comparative podcast popularity and it has been successful in bringing together podcast publishers from across the spectrum, not just from radio," said Warner.

“We’ve always said it will continue to evolve and grow, and since launch, we’ve added a number of Australian and international publishers, introduced the All Australian Top 100 list and the Top 10 Publishers list by monthly downloads."

Warner said the CRA continues to consult with publishers and agencies with the intention of evolving the ranker.

That "may include" releasing additional data in future if that’s useful to help the market grow, added Warner. But it seems the market is already asking for more data.

Anybody listening?

PwC's 2020 annual outlook report for the media sector flagged podcast advertising as one of the key areas of growth for the ailing radio sector. It forecast podcasting would become "increasingly sophisticated" as traditional direct-response ads made way for targeted, dynamically-inserted advertising.

But it underlined the need for better data to realise commercial growth.

"While the return of audiences and new products and services provide strong opportunities for the audio industry, the sector will need to find new ways to attract advertisers by increasing ease of transaction, targeting and measurement," per the report.

Carat Chief Investment Officer Craig Cooper said a consistent and universal audience measurement system has been the "biggest hurdle" to podcast ad revenue growth.

Most clients are less inclined to jump into any channel without some sort of guarantee of audience, said Cooper.

"We don’t necessarily require CRA to release figures – and in fact we would prefer an independent source of audience data [inline with linear radio], but measurement in this space is definitely required," he added.

"We understand that digital/real-time metrics may not be achievable given the podcast platform walled gardens. But we encourage CRA to think how this could be separately measured – a potential addition to the linear radio survey platform perhaps?"

Price factors

Carat’s Cooper thinks two-speed pricing for talent on podcasts is partially because publishers lack the "same source of truth". Because there is no universal measurement, there is opportunity for companies to set their own values. But he said it is natural for a well-known personality to command higher rates within the same channel.

PHD Sydney Head of Digital Amelia Ward does not think that audience measurement gaps per se are driving inconsistent CPMs.

“When evaluating CPMs we assess how the rates have been built out, understanding that some of the more bespoke and co-branded podcast content will attract higher rates," said Ward.

“There may also be fluctuation of rates as programmatically traded inventory can see CPM premiums applied for specific targeting – fairly standard across digital media,” she added.

"We are also seeing more programmatic guaranteed deals coming up across the channel which may affect the final traded rates across each agency."

But Ward said that some advertisers would remain hesitant to invest marketing budget without independent audience figures.

Filling gaps

In the absence of better data and metrics, media buyers and owners need to focus on outcomes for brands, said Wavemaker Tani National Head of Investment Philippa Noilea-Tani. 

For now, she said podcasting remains an emerging channel, with limited ROI data available, an evolving list of content providers and listening platforms, challenges around content discovery, undefined scale and is comparatively expensive to radio.

Which is why brands are still getting to grips with what that means for messaging and creative formats as much as whether to invest or or how much.

"Sales teams are still refining their narrative, USP’s, commercial structures and how best to navigate agency roles and responsibilities, as traditional media evolves and offline/online media converges," said Noilea-Tani.

"Will improved audience accountability and a streamlined measurement framework for the podcasting landscape help scale investment? Absolutely. Is a perfect solution required before short-term growth is realised? No. 

"To effectively evolve a brand’s audio strategy, against a backdrop of imperfect measurement, agencies must collaborate closely with media owners to de-risk investment, with a focus on delivering business outcomes, rather than just media metrics."  

PHD’s Amelia Ward agrees, adding that while some brands may remain hesitant, the holes in podcasting’s commercial set up are not sufficient to stop agencies investing in the channel.

Ward said PHD recommends podcasts for clients because it’s an "effective and immersive channel" with engaged listeners.

While it is in the industry’s commercial interest to step up on measurement, she said agencies also have access to campaign attribution and validation metrics including impressions, reach and frequency.

"We utilise these as KPIs to determine campaign success, and the media partners use those same figures as a guide for providing estimated audience/listener stats,” said Ward, though some of the data is modelled.

"We are missing true third party verification such as live listens and how many people skipped, but really this is a limitation of the legacy platform technology. From a digital perspective, the important part is that the campaign results we have access to are currently the closest we can get to deterministic data."

Ward added that in some instances, the aim is to measure podcast activity beyond those standard metrics.

"There are minimum thresholds for listens/downloads, especially measuring audio incrementality, but the typical campaign metrics would be awareness and brand lift," said Ward.

"Some campaign briefs have required us to look at ways to measure beyond brand lift and monitor ROI uplift. I see these metrics as more important than planned audience numbers."