Editor’s Note: The following is the first piece for In the Public Ear, a column by Mediafile’s podcast and public media reporter Grace Mausser. In the Public Ear will feature commentary and analysis on podcasting, public media, and the organizations behind it all.
About a month ago, I discovered the podcast Placemakers.
Created by Slate Magazine and distributed by Panoply, Slate’s podcast network, Placemakers explores how people are trying to improve and change their neighborhoods. The podcast is more produced than Slate’s standard conversation-driven audio programs, and I was excited to see the outlet explore a new podcasting style.
By the second episode, I was recommending the podcast to friends. I found it to be an incisive look at grassroots community organizing and revitalization. By the third episode, it struck me that the content was “made possible by” JPMorgan Chase, a company not typically associated with grassroots community organizing and revitalization.
Yet, any hesitations I had about the podcast’s sponsors came too late. I was hooked. I’ve listened to (and liked) every episode of Placemakers. Sponsored content had reeled me in, and I’m sure I am not the only one.
Sponsored content, like in Placemakers, is changing demographics of podcast sponsors and has the potential to change the podcast marketplace. Although this sponsored content in podcasts is relatively new, advertising in these spaces is not. Borrowing a page from public radio, most podcasts call their advertisers “sponsors,” regardless of the type of sponsor they are.
Two major types of sponsors have emerged in current podcast advertising. “Traditional” advertisers in podcasts pay for a brief mention of their company or product during the program, often heard in the “this program is sponsored by…” messages that pepper many podcasts.
Alternatively, “content sponsors” are typically the only sponsor of a program, often providing the financial support for an entire episode or podcast series. While the content in these sponsored podcasts may not sound like an explicit advertisement, it could be developed with sponsor companies’ intentions in mind – and sometimes with sponsors at the editing table.
Yet, even with content sponsors, there are nuances.
Take two such sponsors, General Electric and JPMorgan Chase.
GE sponsored the entire podcast series “The Message.” Yet, during episodes of The Message, GE was only mentioned sparingly. Hosts sometimes mentioned that “The Message” was a production of GE Podcast Theater, but for most of the series it was easy to miss that the GE of “GE Podcast Theater” was the same GE of washing machine fame.
On the other hand, JPMorgan Chase presents itself as though it is a traditional advertiser, with sponsorship messages throughout the “Placemakers” episodes.
While there are not currently many sponsored podcasts, their recent proliferation can be pinned on two things: revenue and demand.
On a fundamental level, podcasts need to find ways to make money, even if only to cover production costs. In light of concerns that podcasts may not be profitable, having sponsored content helps to bring in revenue.
Though exact figures are hazy and closely guarded, creating a sponsored content podcast can cost companies in the mid six figures. Gaining this revenue from a single show is certainly appealing to podcasting creators. In fact, it is so appealing that podcasting powerhouse Gimlet has created a separate team dedicated solely to creating sponsored content.
Additionally, big brands are driving demand for sponsored content. Slate President Keith Hernandez told Nieman Lab that “brands are moving away from an idea of themselves as a bland corporate entity […] they want something deeper than a brand logo” and that he thinks sponsored content “is just the beginning of a longer trend, of brands digging deeper into ideas and building relationships with the publishing community.”
One example of this trend is Goldman Sachs. Initially a traditional advertiser on podcasts, the company quickly moved to create their own. While participating in traditional sponsorship brings advertising opportunities, big-name brands seem to be moving towards creating their own podcasts – or, at least, sponsoring an entire program that can be influenced.
It is difficult to start a completely independent podcast, as Goldman Sachs has, so sponsoring content and entire programs allows companies to shape a brand narrative without having to commit resources to producing their own podcasts.
These forces mean that many of the content sponsors in podcasting are now bigger, national brand names, unlike the early days of startup sponsor messages in podcasts.
Within major podcast networks, there are currently ten such sponsored content podcasts, with nine distinct content sponsors. The only podcast distributors with this sponsored content are Panoply, Earwolf, Gimlet, and the Ringer, and the sponsors range from General Electric to Nestle to WhiteWave Food to Hiscox Insurance. Eight of the sponsor companies are publicly held, with an average revenue stream of $33.78 billion and a median revenue stream of $6.23 billion.
The demographics of these companies appear dramatically different than traditional podcast advertisers. Last year, FiveThirtyEight surveyed the sponsors of the top 100 iTunes podcasts, and found that 87 percent of these traditional advertisers were mid-tier players that acquire customers online, such as sites like SquareSpace or Dollar Shave Club. Many of these companies are not public, and do not have revenue streams anywhere near to the bigger name brands now sponsoring podcast content.
Sponsored content’s high cost of entry also bars smaller companies from participating in the podcast space. If, driven by profits, the biggest podcast producers continue to turn towards sponsored content, it could push smaller advertisers out of the podcast advertising market. SquareSpace, a well-known podcast advertiser, brings in a $100 million with it podcast sponsorship, but bigger, more recognizable brands, could reap even more.
This is a trend that could change the entire podcasting landscape. To an extent, advertising is advertising, whether done by a plucky internet startup or by a multibillion dollar global conglomerate. But a podcast market full of shows sponsored, and possibly editorialized, by companies JPMorgan Chase and eBay is certainly a different animal than one powered by traditional sponsors like SquareSpace and Casper. And, as an avid podcast fan, this make me wary.
But then again, I do like Placemakers.
Author’s’ Note: To identify sponsored content podcasts, I looked at the predominate podcasting networks and producers including Panoply, Gimlet, Radiotopia, Earwolf, and The Ringer, as well as the top 100 podcasts on iTunes. Podcasts were considered sponsored content if the podcast’s logo featured the logo of another company whose primary purposing is not producing media content. For example, Panoply distributes a Real Simple podcast, but, because Real Simple produces media content, this podcast is not sponsored content. I also occasionally relied on prior knowledge to identify sponsored content. In the case of Placemakers, JP Morgan Chase’s branding was not feature on the podcasts logo, but I knew they paid for the series.