It's an exciting time for podcasting and we continue to see explosive growth throughout the industry. Acquisitions are being made, new hosts are being announced, creators are bringing new, insightful, and joyful stories to the space, and adtech is bigger than ever.
With the first half of 2022 behind us, we wanted to take a look at some of the big moves being made in the space. In this episode of On the Mic with Ad Results Media, hosts Nathan Spell and Lindsay Smith sit down with Bryan Barletta of Sounds Profitable to chat through the changes and upcoming predictions of adtech.
Podcast Transcript
(0s): We actually use Scribd in our home.
(3s): Do you really love your sleep number? And we do.
(23s): Now it's an exciting time to get into podcasts, whether you're a creator stepping up to the mic for the first time or an advertiser, thinking about diving in the opportunity to reach new and growing audiences has never been greater with all that growth comes. Some growing pains and podcasts advertising has had his fair share. Thankfully podcast ad tech is evolving fast, but that also means there's a lot to keep up with on today's episode of on the mic. We're talking with Brian Barletta, founding ad tech guru behind sounds profitable. If anyone can make sense of the world of podcast ad tech, it's him.
Brian. Thanks for joining us.
(57s): Yeah, thanks for having me.
(58s): So why don't we start by having you introduce yourself briefly and talk about sound's profitable?
(1m 4s): Absolutely. So sounds profitable is so many things. Now it keeps expanding, but it started off as a newsletter and my attempt to help educate everybody in this space from, you know, junior account managers, all the way to C-level in podcasting about how the technology and the business of well podcasting works, right? Like the tools that we use inside and out all inevitably relate to monetization. So how do we use them? How do we flight ads look at our data? What more can we ask from them? What can we learn from outside of the space? And it evolved from a newsletter in September, 2022.
Now we have five podcasts. We just launched our first research study. We have, we have live events coming for our sponsors, so many cool things. And so the best way to explain this is we're a neutral advisory service. It's me and Tom Webster, formerly of Edison research. Who've come together to provide something completely neutral. We hold no equity advisory or board seats. We have no investment in our company. It's just us to help everybody in the space, better themselves, grow the industry and provide information. That's going to let everybody really succeed.
And so we don't charge for access to anything. And it's all sponsor supported. And Ad Results is one of our longest sponsors. So thank you for that.
(2m 16s): Yeah, absolutely. I know running one podcast is a lot, so five that's kind of mind blowing, follow up question. Do you sleep?
(2m 25s): Well? Thankfully I have help. So the podcast we have are the narrated articles, which is pretty easy, right? We write the weekly article, whoever wrote it, reads it. And then what's cool is we're working with Veritone for Veritone voice to use our synthetic voices and have it speak Spanish. So we've got two podcasts there, the weekly ad tech applied it's me and Arielle and this, and by talking to so many cool, amazing people in the space, and then Arielle helps break it down. Why that was an important conversation, what to take away from it. And then on Friday is honestly my favorite podcast. We do it's called the download and it was because every week, me and the team are reading probably a hundred articles about ad tech advertising.
The business of monetization has creators and podcasting. And so it was 10 minutes or less on what happened related to the business world of podcasting, why it matters to you. And we did an English with Sreya Sharma inside podcasting and Manuel Obadiah of OWC studios. And Manuel has said, Hey, I speak Spanish. Could we get another host? And could we translate it and do it in Spanish as well? So now every Thursday, sorry, it's Thursday. Now we update it from Friday to Thursday because we decided we're a company that doesn't work on Fridays.
And it releases every Thursday in English and Spanish at the same time. And so by say we have five podcasts, I speak into the mic for two of them, Evo Terra, our head of content makes all of them happen, right. He runs all of them and then we have a bunch of hosts for all the different things. So my part is probably smaller than your part on this show here. I'm very, very thankful for our team. I once tried to edit a podcast just to understand it. And if, if that would have fallen on my plate again, I would not have continued doing it.
(4m 6s): I didn't realize that all of this started in September 20, 20 that's that's huge in just two years. So how, what was it about podcast ad tech that made you want to focus on that?
(4m 19s): Well, my background, my whole career has been ad tech and one way or another, because, you know, I was obsessed with the iPhone and Android 13, 14 years ago, whenever it first came out and I used to write a Stu app reviews, which meant I just dropped out of college. I sat there and I would play with a nap for 15 minutes, write a review, put a camera down on it, using my chubby fingers to like touch the app and then narrate the article over the video. And then I would upload it to YouTube. I did a bunch of reviews and an advertising company out of New York reached out to me and said like, can you come work with us, do developer relations.
And at the time I was a content creator, but I didn't see it as that way. I was like the people who are making the apps or creating the content in these tools. And the idea of working for an advertising company about apps to me was like, I can help them earn enough money to keep doing, keep making cool things. And you know, that was a really cool kickstart to my career. I fell in love with product management, technical account management, sales, engineering, all of these cool things. And I just got to dig through it. And honestly, I fell into podcast. It's very funny.
We were all listening to CRL at the time either. It was like live right? Like very funny. There are a few like key moments in my life that I remember the live aspect. Like the summer, everybody played Pokemon go and serial came out and all the, you know, like you knew where you were that day. And a salesperson had said, Hey, and I think it was Matt Wrangler. Who's over at progressive who's over at pod sites. Now, now part of Spotify, he said, Hey, w NYC wants to do attribution for progressive auto insurance in their podcasts.
So I said, and I was just like you said, what? So we just kinda, we kind of figured it out. And that that company was out there and barometric split off of that. I was one of the founding members there. We were acquired by Claritas. We just went heads down on podcasting. And then, you know, was at megaphone for a short period of time. And I was in charge of the ad server and data pipeline. And I am a very motivated, aggressive person to do my job very well, which includes sometimes ripping up those floorboards and they couldn't tell me they were selling the Spotify and I couldn't stop her, but up the floorboards.
So we parted ways. And that's, that's what led to sounds profitable in September of 2020. That's it's very interesting to me to realize that it has not even been two years.
(6m 37s): Yeah. That's so wild. I honestly thought I'd been longer.
(6m 40s): These two years have been very long two years. I mean,
(6m 45s): Yeah. It's been two decades worth of time crammed the two years. Yeah.
(6m 50s): Yeah. It's still March, 2020 by the way
(6m 54s): So since we're kind of halfway through 2022, I'm kind of curious, what are some of the key podcasts like advertising trends that you've seen so far?
(7m 5s): I think that we're seeing a lot, of course correction. I think that people got real wild on what they could do with the tools and offered every single thing that it said on the box and then became overwhelmed because like, I'm a big fan of dynamic ad insertion. I think it really works when you determine how you want to offer it. Right. But if it's just like, you know what I mean? If it's a, if it's a pizza cut into squares and, and people just keep going for the random middle pieces and then all you have is like the weird small pieces in the cross, you'll be might want to eat the rest of that pizza.
And so I think we're seeing a lot of companies pull back on how they offer things. I don't think we're, I think we're continuing to see people move away from traditional baked in, right? Like the editor puts the ad into the file or it's read live in those situations. We're still dynamic. But I think we're seeing it executed now more, a hundred percent share of voice or for a specific episode for a period of time. Instead of every single download for every single spot could be a brand new ad. So people are they've tats tested the outer limits.
Salespeople have run a little bit of muck. It's caused a little operational headache and people are pulling back because the truth is you didn't have to get that wild. You can say, we provide great results. This is how we sell it. You should buy into it. And a lot of people mostly are looking for that confidence. And when you don't have that confidence, they just, they, they pushed for everything they could want. They pick those middle pieces out. So that's, that's that first thing recently, I started to reflect that people are like not complaining about the fact that we don't get listens anymore. You know, and Spotify really pushed hard and said like, we're the only ones who can track listens of ads.
We all got kind of scared, but Spotify has done a great job to show us that they're not part of podcasting. They're in-app audio advertising, right? And they're a walled garden. And even though megaphone does so much dynamic ad and plays in the same playground, Spotify punches at dynamic ad insertion and says in-app is the way to go. So cool. Have your own territory. You're like streaming the rest of us, identify and, and are starting to realize listens are a subset of downloads. The success of a campaign is already baked into the CPM, right?
So if you have a show that has high conversion, then people are listening to it, that's it, right? That's what you, that's how we figure it out. If it doesn't convert. Well, it doesn't matter if, if people are listening to every download is a hundred percent listen, and people don't convert, your show's not worth anything, but if 25% listen, but all 25% convert, probably one of the most desirable shows out there. So we're moving away from listens. And then I think the last two things kind of go hand in hand is programmatic and brand suitability and programmatic.
I've spent the last two weeks talking to everybody who claims to be an expert in programmatic and podcasting. And the truth is none of us are speaking the same language. We all have preconceived notions about how it works outside of the space and in the space. And you know, so much of ad buying outside of podcasting is programmatic. But does that mean programmatic guaranteed? Which really is the same as someone sending you the email with the file and the tracking pixel, and saying, please put this in there for this show for this period of time, it's, it's just different pipes to do that or private marketplaces where it's still one buyer and one seller connecting and saying, this is our agreement.
And this is what you can buy. This is a lump of inventory. That's primarily how programmatic works. And that's the lion's share of ad sales anywhere direct in digital display. And video is very small, right? Very, very small, like 15 to 30%. And open marketplace is also very small. The idea that you're just like, Hey, anybody can buy my inventory. That's it doesn't really appeal to people because brand suitability, right?
Does the brand match with the show? Does the show match with the brand and worse that all of that, when you make your inventory available on an open marketplace, you only have one lever to pull and that lever is decrease your CPM. So people buy more and that's a race to the bottom. So I'm so excited about those last two, because as I get an opportunity to shine more light on them, I get to tell people like you don't have to change your prices. Programmatic's not any cheaper. It's just someone saying, Hey, instead of emailing me that report, it would be real cool if I could see it in the trade desk, because that's where I operate all my campaigns out of.
(11m 29s): So that, that kind of leads me to a follow-up question, which I think you might've already answered, which was going to be, you know, are there a wider tech trends that are feeding into podcasts at tech? And it sounds like programmatic is really something that the advertising industry as a whole is moving towards. Is that right? It's this is not just something for podcasting. Podcasting is now catching up to a larger trend that that's been happening outside. Yeah.
(11m 51s): These think about it. I mean, gosh, I'm still connected through like Google sheets and Google Excel or whatever, whatever their thing is, the equivalent of Excel for companies that I worked with 10 years ago, because that's how they like track campaigns and execute on campaigns and all that. That's how programmatic is it's pipes. Right. You have to say, here's my inventory it's available. And someone has to say, here's my ad and you agree on it. Right. And so it's just, it's an operational pathway and we it's so easy. We, you know, we confuse dynamic ad insertion with announcer red and we confuse programmatic with open marketplace because it's, it's easy to talk about the fear.
And so, yeah, I mean, I think we're catching up with the industry of advertising at large, that decided operationally, if I can call somebody to say, Hey, do you want to buy my inventory? And they'll say, yeah, cool. Send me a deal ID. And we agree on the price. They can buy 15 minutes after the call's over versus, oh, Hey cool. Well, we signed a contract and we know how our billing is going to be handled individually and send me over the assets. Okay. We have to do all these different approvals. We have to set it up. Oh, the ad ops person is out for the day.
Programmatic has all that. Right. The, each of the partners know how they bill each other, the technology is there. It can be live instantly. And so that that's appealing for the greater advertising ecosystem.
(13m 13s): The, the analogy that comes to mind as you're talking about that is like the move to like fiber optics or something. It sounds like the friction is just completely taken out. Yeah. And it just, the speed to getting live is so much better.
(13m 26s): Yeah. And I, and I don't like, I think people are, that's a great analogy and I think people are concerned, right. But like that analogy works well too. You still need the same number of tax. Maybe even more because more people are connecting to it and you still need product experts and all these different things. It doesn't reduce jobs. It doesn't lower CPMs. It does increase middlemen, right. Because the SSP of the supply side representing the inventory and the DSP representing the buyer take typically 10% or more on either side. If you think about it, right?
Like the head count costs and the increase to the CPM that it would cost to manage these manually and the reporting and the loss of being able to look at it holistically. I think it shakes out. I think everybody's like that that is a worthwhile service where we are.
(14m 13s): So there have definitely been a lot of moves made in the podcasting space this year. What are, what are some of the more major developments that advertisers and agencies should probably have on their radars?
(14m 28s): I'm going to, I want to frame it in two ways. I mean, I think the biggest acquisition is pod sites and charter will be required by Spotify.
(14m 33s): That's the one I was thinking about. Yeah.
(14m 36s): Their technology is fantastic. It was an incredibly smart move from Spotify and a business standpoint. It hurts the podcast industry, but it gives us an opportunity. I believe that prefix analytics, we should move away from right, like using, Podtrac using, chartable using all these tools to measure like how downloads the show has. Well, we know that the hosting platform has that the hosting platforms should do more to make that available for the publisher and attribution. Can we accomplish in many other ways, move to dynamic ad insertion, do a hosting platforms, do more prefix.
We're fine. So that's a whole that I think we could grow past if we want to. And I think more people are doing that because they're realizing that it doesn't add the value that they thought it did, but straight attribution, pod sites in charitable, two of the top three, right. Claritas being in that mix too. And they all competed in and moved at different angles. Spotify is going to have more data for them. And that means that that data is going to be actionable in different ways that are going to be powerful and great for people to use. But it's also going to be obviously influenced by the source of the data, which is Spotify.
And so it's going to make sense for people who want to use Podsights to want to spend in Spotify, because they'll get the best results out of it, but it's left a hole for the rest of us and it, and it makes all of us question. Even if it's not granular data, that's shared. If pod sites sees an uptick, right? They do their quarterly report, but they see an uptake in female-hosted comedy shows and an uptick in pharma campaigns. They can make correlations that the two of them, you know, that ad results landed some really sweet clients on pharma and found a set of inventory that works.
Spotify can look at that more than quarterly. Like it's not amazing a privacy. It's not non-publicly available data. The pod sets provides, like, but that's the type of thing. That's scary in a world where Spotify has a war chest of money that they're comfortable paying to buy out inventory or to win over advertisers. And they consistently tell everybody that they're podcasting their podcast advertising, and that's all you should spend on. We all know that's the wrong way. It should be part of your plan. I think that's great, but that's concerning.
I don't think it's bad for everybody, but you just have to know what you're getting into. That's a big one there. I think the other trend that I'm seeing is a lot of people, smart people at companies are having the courage and the excitement to leave those companies and try freelance or consulting. Like I think there are unfortunately a lot of companies in this space that rely on one or two key people and they can't reward or a promoter elevate those people in a way that's satisfactory.
And those people are starting to realize their value. And so we're going to see a lot of really strong consulting because there's a lot of holes now to me, I think that that's great overall. I mean, that's what I'm doing. That one company is going to struggle a little bit. And hopefully they survive that when these, these changes happen, but more companies benefit because that knowledge, these experts are allowed to talk to everybody, right? Like that's so critical because we're still in the rising tide, lifts all boats, part of this space.
And so that's been a major movement. And I think we're going to continue to see that through the end of this year and into next
(17m 56s): Well. Yeah. And that brings us to, I guess the last question you've talked about, some of the biggest moves that have happened so far, I know the future is not really something that we can predict entirely, but looking forward to the second half of the year, do you have anything in mind that you're going to see that we're going to see more of in the space that people should be aware of?
(18m 13s): I think people need to do more with the data that they have, because I think we're going to get, we're going to hit a brick wall real quick. Hmm. I think, I think that there's, you know, we talk about listens and not having listens, but like what about downloads? Why can't my hosting platform differentiate an assumption between someone who is following my podcast versus someone who is a casual listener, someone who's following my podcast versus someone who's a casual listener. Why can't they identify people who are more likely to binge an episode or show me my most bingeable episodes or entry points into this stuff.
Like this analytics is critical. We have all the data, but there's no money in that today. But one day when we're out of inventory, when there's no room for make goods, when you have to be clever and creative and really squeeze that margin, that's, that's the stuff that we're going to have. And it's not, it's not going to be like a gradual ask. People are going to are like all of a sudden we're gonna hit a brick wall. There's going to be, everything's going to be sold out. And you're going to have to know those interesting, unique facets of your podcasts to justify an increased spend, to justify winning a campaign and all of that.
So that's a trend that I, I see coming. The other trend I see is we're going to get picked apart. We can call podcasting whatever we want. YouTube is podcasts are not, I, don't not interested in that conversation. You can put a podcast on YouTube. Doesn't have an RSS feed. Cool. Right now YouTube is podcasting. Especially if we, we, we show all of that and the people who sell it, Spotify is podcasting. Well, what happens is Spotify decides to close it off completely and makes compelling arguments for publishers to serve ads into Spotify. When it's a Spotify request, versus when it's their RSS feed or they take all their anchor podcasts and they don't let them have RSS feeds and YouTube decides to pull away that way.
And then all the Hollywood podcasts move into Netflix, Hulu, you know, Amazon prime, Disney plus all the streaming apps, right? There's three tiers of podcasts and long tail core and Hollywood, we're all going to grow. But picture that headline in Bloomberg when long tail is pulled out by YouTube and Spotify and Hollywood is pulled out by the streaming apps. They're going to say podcasting was, you know, lost two-thirds of its reach. When in actuality, we super grew. And even that core group continued to grow, but because we're open, we, we have this value of open and that it's not quite siloed yet.
Yeah. We're getting picked apart right now. So it's going to be a big perception game. We're going to have to have our guard up. We're going to have to make sure that we're very careful with how we word things. We're have to educate more and more people out there about what podcasting is, what it means, how we, how we represent it. Because those articles mean more to our space. When someone at a major agency or a major brand reads that that's the perception versus what really happened. So that's, that's where I am. Like, we're not in chicken. Little, the sky is falling yet, but we got a fight coming and it's not, and it's a fight that we can win.
If we all just realize that we're in this together right now, once we win that we can go to beat each other up or whatnot. But like not all the brands are here. Print. Like there was in the download this week. I forgot what the number is. But like a stunning number of newspapers have less than a hundred thousand readers in their circulation. And I believe the newspaper advertising business is still like an $8 billion a year business where like two, we're getting there.
Like, we're like, we're nothing numbers. How do we get higher? And the way we get higher as we work together, when we're, you know, double digit billion dollar business, cool beat each other up all day long, let's get there. There's there's enough money.
(21m 58s): Well, something that you, you hit on that in the last piece of this, the idea of, of pairing that data with dynamic insertion in particular, that sounds like something that's going to be super key, because like you said, if you can target the people who are not just download downloading, or like it's in their podcast feed, but they're like constantly paying a lot of attention to your, your show, the value of that listener, because maybe what makes newspaper or, you know, print something that people are still interested in advertising on is the idea that if you're still subscribing to, you know, something in print, you're really, you're really interested.
You're actually paying attention. It's not just something that you're, you know, subscribe to kind of, you know, Willy nilly. It's something that, and podcasting is obviously something that we know people are paying so much more attention to the shows in their feed in general,
(22m 50s): Let's give this example. So it's, it's me and my wife. We have an au pair and I have two kids. So five of us, and every Monday we listened to wow. In the world, it's a tinker cast, wandery production. And it's about 20 minutes long. We listen to podcasts for about an hour. Monday morning, we play it through the smart speaker. That's five of us listening. Each episode is 20 minutes. So we listened to this new week's episode last week. And the week before I means every episode gets three, listens, five people, each 15 impressions, 15, and the ads are like, grownups, this message is for you.
And you know what? I know the ads inside and out, but that's one, download 15 humans hear each of those ads three times each of those episodes, three or sorry, five humans here. Each of those ads three times.
(23m 34s): Yeah.
(23m 35s): It's you know, we need to think through the value there. We talk about it like a downloaded it. What happens if they don't listen, forget that. What happens if you play it out loud? What happens if, how many other people count? What does it matter? What happens when my wife gets an ad, that's really meant to be targeted to me. And she tells me about a product that would be perfect for me. And it's even more powerful because she told me about it as a recommendation from a podcast she trusted, and I don't care about her podcast, but I care about her. So I'm more likely to buy it. Like there's so much neat data here that, that a buyer is motivated to say, well, what about this?
And if you can't answer it, the price goes down. Yeah. Publishers. And you know, and we're talking with you guys add results. You guys, one of the biggest buyers in all of podcasting, and you're crushing it. If someone says to you, Hey, this is why we're worth this. Here's the data. Here's the back it up, your eyes light up. Like you guys are so bought in to this side of it, but you can't do it for them. That unique, interesting story has to come from that publisher representing themselves. And right now the hosting platforms, aren't interested in it because the hosting platforms that have the power to do that, it is easier for them to just turn on monetization.
Hmm. We'll serve enough. We'll fill, whatever's left. Don't worry about it. And they'll hit a crunch chill, right. Because their margins aren't sustainable. So I don't know, we have so much data and we, we cry poor and ask for more. We're good. We need to spend time on it. And I think we're going to see some really smart people dig into it this year.
(25m 4s): I think that's really exciting.
(25m 6s): Yeah. And I was going to say, I feel like we are smarter for talking to you about all these things every time this is, is this the second time you've been on the show or maybe the
(25m 14s): Second.
(25m 15s): Yeah. So really appreciate you coming on. And I know there's a lot of education that needs to happen and you guys are doing so much of it. So thanks for being a part of on the mic as well.
(25m 25s): Heck yeah. Thanks for having me happy to come back whenever
(25m 29s): If you enjoyed this episode, be sure to subscribe for updates on future episodes and leave us a comment with your feedback, questions, or ideas for future segments. If you would like more information on Ad Results Media and what we do, please visit us online at adresultsmedia.com. This podcast is an Ad Results Media production.
