Meta: A Podcast About Podcasts – Akimbo with Seth Godin

Check out the Akimbo show notes

Key Takeaways

  • 25% of the U.S. population listens to at least 1 podcast every week
    • Those listeners spend, on average, 6.5 hours/week listening
  • In 2019, there will be $515 million spent sponsoring U.S.-based podcasts
    • This is only a third of how much money is spent running ads at the movie theater
  • Podcasts monetize at ONE penny per listener hour (for every hour someone spends listening to a podcast, an advertiser spends a penny)
    • Some comparisons:
      • Radio: 11 cents is spent per listener hour
      • TV: 13 cents is spent per watcher hour
      • Internet: 24 cents is spent per user hour
      • Magazines: 57 cents is spent per reader hour
      • Newspapers: 72 cents is spent per reader hour
    • Some key points:
      • The ROI of advertising a podcast is hard to measure AND podcasts aren’t scarce
      • Because there’s no scarcity, it’s difficult for even the top podcasts to increase the cost of running an ad 
      • “The culture of the people who buy ads runs really deep. That culture says, ‘What do people like us buy when we buy media?’ So far, they buy one of two things: the brand ads their bosses used to buy [TV, newspapers, or magazine ads] or they buy the direct marketing they can prove works [internet ads]. Podcasting is neither one of them.”
  • “Having a podcast is a great idea. It clarifies your thinking and lets you share your voice, but it is NOT a good way to make money.”
    • The median podcast has just 124 listeners
  • On the future of podcasts – “I think in the long run we’re ending up with a bookstore model”
    • “The bookstore model says, ‘No one ever got rich owning a bookstore. Every once in a while an author comes along who does just fine [J.K. Rowling is a billionaire], but in general, you should write a book because you want to write a book, not because you want to get rich.”

Intro

  • This is a podcast about podcasts

A Booming Industry

  • There are 700k podcasts currently available
  • 25% of the U.S. population listens to at least 1 podcast every week
    • Those listeners spend, on average, 6.5 hours/week listening 
    • “There is no medium I am aware of that has grown at that pace with the exception of browsing the internet”
  • 60% of people who listen to podcasts are doing so at home or work (so the majority of listening ISN’T being done in the car)
    • Only 3% of people who regularly listen to podcasts do so at the gym
  • People with iPhones listen to more podcasts than people with Androids, partly because Apple Podcasts was the first popular podcast listening app
    • Also, because the iPhone is a “luxury good,” those who own one are more likely to be spending their time looking for new forms of media, looking for new ideas, and challenging themselves

Let’s Dig into the Money

  • The vast majority of podcasts are like the bookstore – they’re filled with thoughtful conversations between people who care about specific topics
  • In 2019, there will be $515 million spent sponsoring U.S.-based podcasts
    • This is only a third of how much money is spent running ads at the movie theater
  • “When we divide it out, podcasts monetize at one penny per listener hour”
    • For every hour someone spends listening to a podcast, an advertiser spends just ONE penny
    • Some comparisons:
      • Radio: 11 cents is spent per listener hour
      • TV: 13 cents is spent per watcher hour
      • Internet: 24 cents is spent per user hour
      • Magazines: 57 cents is spent per reader hour
      • Newspapers: 72 cents is spent per reader hour
    • How can we explain the above?
      • In general, the amount of ad money you get goes up the older your medium is (with one exception – the internet is younger than radio)
        • “This tells me that advertising is largely sold, not bought”
      • The people who buy ads (with the exception of doing so on the internet) are rarely spending their own money. The people who are buying ads are doing so to tell their boss, ‘Hey, I bought some ads.’
        • “That question. ‘What will I tell my boss?’ fuels so much of what drives our culture”
        • So – if you work in advertising at a certain company, and tell your boss you spent the budget on a bunch of podcasts…. you might not get promoted
          • The older generation (those in positions of authority) are much more familiar with newspapers, magazines, etc.
      • The ad spend of newspapers, magazines, and TV is so high because all you need to do is pay a penny more than the competition
      • “Except for the direct marketing of the internet, all other forms of media are based on scarcity”
        • (There are only 3 big TV networks, only 20 giants magazines, only a handful of newspapers in a city, etc.
        • What this scarcity means: your competition can box you out

Back to Podcast Advertising

  • The ROI of advertising on a podcast is hard to measure AND podcasts aren’t scarce
  • “Anybody can make a podcast and in fact, anybody should”
    • “Having a podcast is a great idea. It clarifies your thinking and lets you share your voice, but it is NOT a good way to make money.”
      • The median podcast has just 124 listeners
      • More than half of all podcasts haven’t uploaded a new episode in months 
      • Sure – the podcasters among the top 1% can probably make a living
  • Because there’s no scarcity, it’s difficult for even the top podcasts to increase the cost of running an ad 
  • “Podcasts don’t need advertisers, they need sponsors. They need patient, long-term advertisers who understand that the podcaster is talking directly to curious, smart people who have volunteered to spend a half-hour or an hour in an intimate relationship with someone who’s talking with them, not at them.”
  • Meanwhile…. people are experimenting
    • Luminary is trying to become the Netflix of podcasts by putting them behind a paywall
  • In summary:
    • “The culture of the people who buy ads runs really deep. That culture says, ‘What do people like us buy when we buy media?’ So far, they buy one of two things: the brand ads their bosses used to buy [TV, newspapers, or magazine ads] or they buy the direct marketing they can prove works [internet ads]. Podcasting is neither one of them.”

Where will this lead us?

  • Podcasts won’t go away… clearly
  • “I think in the long run we’re ending up with a bookstore model”
    • “The bookstore model says, ‘No one ever got rich owning a bookstore. Every once in a while an author comes along who does just fine [J.K. Rowling is a billionaire], but in general, you should write a book because you want to write a book, not because you want to get rich.”

Listener Questions

On Helping Children Solve Problems

  • “The important thing about parenting exceptional children in the modern world is teaching them independence. This requires setting them up to be wrong… setting them up to do things that don’t work”
  • Set your kids up to do things where there’s more than one way to be right and many ways to be wrong
  • Challenge kids not to meet the spec but to write the spec
  • Even an 8-year-old would benefit from running a lemonade stand (but don’t give them a how-to manual)
    • “If you give them the manual, all you’ve taught them is that they need to follow instructions… and LOTS of people are already teaching them how to follow instructions”
    • Teach kids to write their OWN instructions

On Data

  • “If you live in our modern economy, meaning you have a credit card, meaning you have a frequent shopper card, meaning you have used the internet… the only thing that’s going on is you’ve lost your privacy but you might not realize it”

Additional Notes

  • Check out this recent report from a16z’s Andrew Chen on the podcast industry
  • In the current election cycle, candidates are paying between $50-$75, on average, on ads to get a donation of just $1
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