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Podcasting: The tremendous growth of audiences and the effectiveness of podcast advertising

In the last 18 months as we’ve navigated a global pandemic and Kiwis have increasingly sought to consume both informative news and light entertainment, New Zealand has seen tremendous growth in podcasting with audiences doubling in size.

The daily reach of podcasts in New Zealand was at 12 percent in 2020, up from seven percent in 2018, according to NZ On Air’s July 2020 report ‘Where are the Audiences’. The report revealed that podcast listeners in the country listen to one hour and 21 minutes of podcasts every day. Globally, the international podcasting market size is expected to reach USD 14.25 billion by the end of the year.

With podcasting continuing to grow at such a rapid rate, Acast, the global power source of podcasting, now hosts more than 30,000 podcasts globally – with approximately 300 million listens per month from audiences around the world. Founded in 2014, Acast provides advertisers with best in market tools and services, while podcasters are given access to a range of monetisation opportunities and the necessary tools to expand their listener base.

Having launched in New Zealand in August 2017, Acast has been in the country for more than four years and sees an average of 4.5 million monthly listens here alone.

Henrik Isaksson, Managing Director Acast Australia and New Zealand, says the Swedish-founded company is now making an even bigger effort to engage the market here – and this stems from demand.

“We’re seeing so much demand from New Zealand agencies at the moment, so it’s time for us to really set up shop. More than four-and-a-half million listens a month for a country the size of New Zealand is a staggering number.”

The lockdown effect

Isaksson says podcast consumption was growing fast before Covid-19, and lockdowns have just increased the uptake. When COVID first hit, Acast saw a huge uptake in news content distributed by the likes of Radio New Zealand, the BBC and the Guardian. But after a while that growth plateaued; there was a bit of fatigue.

Now, comedy podcasts in particular are on the rise. One that Acast hosts, ‘The Worst Idea of All Time’, is by prominent Kiwi comedians Tim Batt and Guy Montgomery and sees the duo watch and review a film neither have seen before every week for a year.

“Yes, audiences have grown exponentially, but the interesting part is they’re still listening to the same amount when they’re not in lockdown. There was always uncertainty that podcast listenership would decline when we came out of lockdown, but that’s certainly not the case.”

Recipe for success

The media industry is currently going through a battle for consumers’ attention but with podcasting, advertisers aren’t having to fight for it in the same way. According to the Acast Sounds Smart report, the majority of people (88 percent) actively reduce distractions before they start listening to a podcast – and that means they’re also listening to the ads.

Unlike other mediums, podcast ads require no additional input from users like scrolling, clicking, or even moving their eyes; factors that cause friction and render ads less effective. Listeners’ trust in the host or show they’re consuming is another benefit. Host-read ads, for example, speak to listeners in the same voice and manner they’re hearing throughout an episode. They provide a seamless shift from editorial to commercial and back.

It’s clear this recipe is successful, not just in terms of attention and engagement but also in driving consumers to take action. Acast found that brand awareness improved for 77 percent of people after they heard a podcast ad, while 25 percent looked for more information and 24 percent noticed the brand next time they were in store.

“It’s a unique environment that you can’t find anywhere else,” Isaksson says.

“Someone listening to a podcast normally listens to the podcast and does nothing else, unlike radio, for instance, where you might be driving or doing chores. Podcasting is a very standalone medium; you enjoy it like you would a book. The relationship with the podcast host is also an important factor. As a listener, you have a very unique relationship to the host and many people describe it, myself included, as having a conversation with or listening to your best friend.”

Add it to the mix

In recent years, Acast has undergone an expansion with continued strong growth. Listens have grown from approximately one billion in 2018 to three billion in 2020, with net sales in 2020 at SEK 592 million. In the second quarter of 2021, Acast had 880 million listens and an organic net sales growth of 130 percent. Acast now has a global footprint across 12 countries, and in the last year alone the Acast Australia and New Zealand team has grown from six employees to a passionate team of 23 audio lovers.

For advertisers looking for a stronger relationship with customers, Isaksson says there’s no better place to start than Acast for podcasting.

Increasingly, advertisers are starting to understand the benefits of including podcasting in their media mix. Brands such as Sky, Vodafone, ASB, and KiwiBank now advertise in podcasts – brands that only 12 months ago didn’t consider podcast advertising.

“Advertisers are really catching up to the fact that it’s extremely effective, and that comes down to the fact that, well, it works. It drives results for those advertisers.

“It’s also an uncluttered environment; there isn’t that much advertising in podcasts at the moment which makes it quite unique. You can’t really compare it to display, social or video, because the ad load is so much lower in podcasting.”

Dynamic ad insertion

In 2014, Acast developed a dynamic insertion technology which automatically injects brands’ messages into podcast episodes at the moment a listener presses ‘play’ — which means each individual can be given a unique combination of ads most relevant to them, and brand messages always stay current. Programmatic advertising in podcasting has also been championed by Acast.

“If you look historically at podcast advertising, you had to reach out to the host and say ‘hi, we really like your podcast and would like to put a message in it’, followed by pricing, reporting, and all the stuff that brands want today,” Isaksson says.

“Being able to do that in more than one or two podcasts was very complicated and extremely labour intensive. That’s what we’ve fixed. We’re absolutely obsessed with pushing the envelope in terms of distribution, monetisation and analytics. All our development team does day in and day out is make the tools better and more accurate for both advertisers and creatives.”

Now, all 30,000 podcasts on Acast could in theory be bought through one simple transaction.

“Obviously that doesn’t happen, but it shows the scale and simplicity of working with a company like us. Lowering the threshold of entry is something I think we do very well.”

Its own entity

Acast believes podcasting should be treated as its own entity, not as an extension of a radio campaign.

“When we first launched in New Zealand, we saw a lot of brands wanting to put radio ads in podcasting,”  Isaksson says.

“But radio ads don’t belong in podcasting, because they’re produced to stand out when you’re driving versus podcast consumption, which almost exclusively happens using headphones. When you run a radio ad in an environment where people are talking in a calm manner, it’s not effective at all.”

Acast does a lot of work on this around creative best practices; the company has an in-house creative team who help produce ads, and even reproduce ads if there are existing assets.

“You can easily do damage if you run ads that are not produced in the right way.

“At the end of the day we want to look after the listener, and we also want to look after the advertiser.”

For advertisers looking to work with Acast, get in touch with a New Zealand representative today via [email protected]

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