We’ve seen a new phrase enter our lexicon in recent months: the “Serial effect.” Google it and you’ll find this neologism employed everywhere from The Hollywood Reporter to USA Today, and it’s used to describe the cambrian explosion caused by Serial, a podcast that relitigates the trial of Adnan Syed, who was convicted of murdering his girlfriend in 1999. This podcast was so popular, the thinking goes, that it’s introduced millions of new listeners to the podcasting medium, in the process unleashing a tide that lifts all boats. Podcasts are now considered part of mainstream culture, a topic of watercooler conversation as well as a booming market for advertisers.
And there is evidence that the Serial effect is, indeed, real. Edison Research found that podcast listenership has increased by 18 percent in the last year. Each day we hear news of media companies launching new podcasts, the emergence of podcast networks, successes in podcast crowdfunding, and even the introduction of venture capital money. It’s hard to read that Marc Maron pulls in $15,000 for every podcast ad and not conclude that real money is being made on this platform that, up until a few months ago, was considered a hobbyist niche. In fact, it wouldn’t surprise me one bit if we see articles within the next year questioning whether we’ve entered a podcast bubble, one that’s produced an oversaturated market.
But though the Serial effect is genuine, new data reveal how any growth was relative and that we’re nowhere near reaching podcasting’s full potential, both in readership and revenue. According to a new fact sheet released by Pew, the percentage of Americans who have listened to a podcast within the last month sits at 17 percent, a mere two points above where it was in 2014. As Nick Quah wrote in his podcast newsletter Hot Pod, “the gains in podcasting over the past several months were significant in relative terms, but are really a drop in bucket in absolutes, particularly in the more significant metrics: listenership, brand awareness, so on and so forth.”
A new analysis from FiveThirtyEight shows that major advertisers are only beginning to dip their toes into the podcasting waters. A data journalist there listened to the top 100 most popular podcasts and recorded what types of ads populated these shows. Her most significant finding? Roughly a third of the top 100 podcasts didn’t contain a single ad. So while we keep hearing of podcasts fetching north of $20 CPM ad rates, relatively few podcasts have the kind of scale that attracts advertisers at all.
And the kind of companies who currently advertise on podcasts are still relatively small fry. Roughly 87 percent of ads were for web-based companies, most of which aren’t even publicly traded (anyone who listens to podcasts has likely heard ads for Squarespace, Stamps.com, and MailChimp, none of which are Fortune 100 material). Most of these are also of the direct response variety, meaning that a user is given a specific URL to go make purchases, thereby ensuring that the ad is measurable. This is a far cry from the much more lucrative brand advertising you’ll see from major consumer companies like Coke, McDonalds, and Samsung.
It can be argued, however, that Serial only just concluded in December, and it’s unrealistic to think that Madison Avenue would shift all its advertising budgets in a mere few months. And one data point in the FiveThirtyEight analysis pointed to why podcast advertising has nowhere to go but up: almost 100 percent of ads are read by the host or a producer for the show. As Andy Bowers, senior producer at Slate, told me recently, podcasting is the most “intimate medium,” with hosts speaking directly into your iPhone earbuds in what is almost perceived to be a one-on-one conversation. This is why their ads have been reported to be so effective, and it’s only a matter of time before larger brands latch on to this efficacy.
The question is whether this intimacy will transfer over into brand advertising. Most podcast advertisers are relatively small companies that haven’t accumulated any negative baggage. What happens when Walmart wants to sponsor a podcast — will the host be able to heartily endorse the company, and if he does, will it erode listener trust? And if we see the emergence of the polished, scripted ads typical on FM radio, will that taint what before felt like an un-commercialized medium?
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Either way, with market penetration still relatively low and the continued growth in smartphone use, as well as the introduction of bluetooth technology in newer automobiles (which makes it easier to listen to podcasts while driving), I think it’s safe to say that we’ve only seen the tip of the iceberg when it comes to podcast adoption. With annual industry revenue at a paltry $34 million, it’s hard to blame podcasters for looking at the $44 billion annual radio industry and considering it an untapped goldmine, a revenue source that is nowhere near having reached its full potential.
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When the host of This American Life, one of the best radio broadcasts currently on air, writes a 4,600-word love letter to your radio show, then you must be good. In Radiolab: An Appreciation, Glass explains, in vivid detail, how Radiolab eschews the typical conventions of radio storytelling, investing massive time resources in producing genre-bending segments, composing radio scores from scratch, and digging up powerful anecdotes that instill a sense of wonder in the show’s listeners:
Sometimes the results astound me with their complexity and deftness. I heard an episode last week – it’s the one they call“Cities” – where in four minutes (starting seven-and-a-half minutes into the show) Jad recreates a science experiment with his own listeners all over the world – Mumbai, Jerusalem, Buenos Aires, Thailand, Liberia, Oslo, Dublin, Copenhagen, Moscow. Each of the listeners lays out a string on the sidewalk in his or her city and takes a stopwatch and counts the speed of footsteps while recording audio of the footsteps. The sheer velocity of this short segment is part of the fun. We jump from person to person and city to city – plus the old 60′s tune “These Boots are Made for Walking” which is reconfigured beat by beat for this purpose – plus Jad explaining the steps of the experiment – plus the scientist who did the original research – plus, a nice touch, a computer-generated voice to read the results. All leading to this intriguing idea about how each city has its own measurable walking speed, which can be shown to exist through direct measurement. And leading to this more novelistic (or maybe it’s just more stoner-ish) thought: Who’s beating the drum? Who sets the walking speed?
It’s a crazy tour de force of radio production, all the more impressive when you think of the difficulty of organizing a dozen people all over the globe and making them get the right kind of audio, and then sifting down what must’ve been 12 or 15 hours of sound to a compelling, funny, utterly original bit of radio that only lasted four minutes. I don’t know any other radio show that would’ve been able to execute the whole thing that fast. I don’t think I could’ve. For one thing, after all that work, you usually make a much bigger deal out of the whole “We reached out to you! All over the globe!” thing. All that effort and trouble, you drag it out for way more than four minutes on the air. But that’s not how they roll on Radiolab. They invented this insanely concise, entertaining way to tell that story, and they have no problem hurtling through it quickly.