September 14, 2022 • 41 mins
Listener Ryan Barrier asked how advertising works in podcasting, and how even old episodes can have current ads in them. So in this episode, we look at dynamic ad insertion and the tricky challenge of balancing business with content.
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Episode Transcript
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Speaker 1 (00:04):
Welcome to tech Stuff, a production from my Heart Radio.
Be there and welcome to tech Stuff. I'm your host,
Jonathan Strickland. I'm an executive producer with iHeart Radio and
how the tech are you. I recently got a note
from my editor that my rushed intro is starting to
(00:26):
slurn together to the point where it's completely incomprehensible, so
I'm working to reverse that. You can thank TORII. She's
the reason why uh I I have I have been
curbed of my chaotic behavior. Anyway, Twitter user Ryan Barrier
sent me a message that read quote, Hey, Jonathan, I'd
(00:48):
love to hear about how podcast advertising works. Early on
in your show, I remember hearing the same ad for years.
Toyota Camera not currently a sponsor of this episode. That's
just metorializing. Then it seems they became more dynamic. Now
even old episodes have current ads. Thanks end quote. Well,
(01:08):
thank you, Ryan Barrier. And yes, our podcasts have ads
that stay current. Even if you were to go back
and download a very old episode of tech Stuff, you
would hear current ads in the ad breaks. And as
you say, the ads are dynamic, we call them dynamic
ads are really dynamic ad insertions. But let's start off
(01:31):
with the different kinds of ads that you can encounter
with podcasts, because it's good to know how advertisers think,
how content creators think, and the frankly difficult path of
balancing commerce and art, or in the case of tech stuff,
commerce and the technology podcast made by a twit. Now,
(01:53):
this stuff is not going to relate to ads initially.
I'm going to give a little bit more background, but
it is important to understand to kind of get a
grasp on the evolution of podcasting and then the subsequent
incorporation of ads. Now, in the old old days, most
podcasts were not really monetized, at least not through advertising.
(02:18):
It was a brand new medium, and so typically a
podcast came out of either someone's hobby, so it was
being done just for fun zies, with no expectation that
it was going to generate revenue. In fact, more than
likely it was costing the person who was making the
podcast money, or it was going to be used as
(02:38):
an extension of some other media companies output. There were
a few exceptions. A couple of podcasts set up subscription
models pretty early on, so they were kind of like
an audio magazine. Listeners could pay to download episodes month
to month. So there were some early versions of podcasts
(02:58):
that were supported directly by listeners, and obviously that model
still exists today. There are subscription based podcasts out there
that are behind a paywall in other words, but ads
really would come a bit later for podcasts. So even
though there were some early paywall podcasting, there weren't a
(03:19):
whole lot of podcasts that contain ads early early on.
Let me give you an example of a podcast that
was used for brand extension. Uh, there was a podcast
I used to listen to. It no longer exists. I
mean you can find old episodes, I imagine, but it's
no longer produced. And this was way back in like
the mid two thousand's, before I was ever a podcaster myself.
(03:43):
It was called buzz out Loud and it came from
c Net. Tom Merritt and Molly Wood were the the
anchors of that show, with other hosts and producers also contributing.
The Buzz out Loud show covered tech news and was
part of a c net brand, but it wasn't necessarily
(04:03):
a revenue generating show on its own, at least not
most of the time. Rather, it was helping you know,
introduced the brand of c net to new audiences, and
the hope was that these audiences would then find their
way to c net dot com, where traffic was monetized
through various means like web page ads and whatnot, you know,
(04:26):
all the regular web advertising strategies. Maybe that visitor would
then become a regular at c net, which means they
would also be a regular source of revenue, or rather,
their traffic would be a regular source of revenue. It
all gets a bit wibbly wobbly when we talk about
this stuff. Really, whenever you talk about advertising, there's there's
(04:49):
a level of kind of vague uncertainty in the mix.
When I started podcasting, which was back in the summer
of two thousand eight, it was much the same for
us over at what was then how stuff Works dot Com.
To be clear, how stuff Works dot Com still exists,
but my part in How Stuff Works split off several
(05:12):
years ago and we haven't had any real contact since then.
But back in two thousand and eight, I was a
writer for how stuff Works dot com and I focused
primarily on tech articles. Big surprise there, and our buss
a guy named Conal Burne who has actually been our
boss on and off a few times over the years.
(05:33):
It kind of feels like we would go our separate
ways and then come back and then do it again. Um.
He decided in two thousand and eight that podcasting would
be a good way to extend brand awareness of how
stuff Works dot com. Uh. The first of those podcasts,
technically the first, I believe was brain Stuff, which was
Marshall brains podcast. He was the founder of how stuff
(05:54):
Works dot com, and then later on that podcast would
pass to other hands. But the first big one to
come out that really was the flagship was Stuff You
Should Know Now. It was important to try and extend
the brand of how stuff Works dot com because most
of the traffic coming into the website was from web searches,
(06:18):
primarily Google. So, in other words, most people who are
going to how stuff Works dot com, we're not going
there just to browse articles. Most visitors were not fans
of the site who just wanted to learn about all
sorts of stuff, from tech to history to culture to food.
By the way, how stupp works dot Com still a
fantastic website with amazing, well written, researched articles, and I
(06:43):
highly recommend checking it out if you're of a curious
nature and you want to just learn stuff. But now
most of the people coming to the website had a
specific question that they wanted to answer, like how does
a steam engine work, for example, and they used a
search engine, our site would pop up and they would
come into the site to get their answer from one
(07:03):
of these well written, well researched articles, and then once
they got their answer, they would bounce. Well, while we
loved all the traffic coming into the site through search,
there was no denying that it sure would be nice
to have folks stick around a bit more and brows
and become regular visitors. Also, this is a good time
to mention that search engines change over time. Right. The
(07:25):
Google search algorithm has changed many times over the years,
and whenever there's a change in the algorithm, there's a
change in page rankings, which means you might at one
point have been the dominant player in search results for
various topics, and then once there's a change in the algorithm,
(07:45):
maybe your results appeared lower down on the page or
or worst case scenario, off of page one. Because hardly
anyone goes beyond page one of search results. Hardly anyone
goes below the fold. So not being highly ranked in
SIR could be a death sentence if you were depending
heavily upon traffic coming from search engines. So again a
(08:08):
strong incentive to find a way to bring people over
to the website beyond just searching for a specific answer. Right. So,
the podcasts, while not initially monetize herble directly themselves, we're
seeing almost like an advertising tool for the website. In fact,
(08:29):
when we first launched the podcasts, we had a rule
every episode needed to relate to a specific article on
the website, and we would refer listeners to go and
read those articles in the hopes that they actually would
go check those articles out and then maybe branch out
from there and explore the site. We were trying to
(08:52):
make How Stuff Works a destination site. UH that had
limited success as far as I'm aware. I mean I
wasn't and analytics, so I couldn't really see what, if
any effect this had. However, we did not too long
after that mandate dropped the requirements so that different podcasts
(09:12):
could actually do UH topics that were not directly related
to an article on the site, And we dropped it
immediately over at tech Stuff because a lot of the
articles that were on the site that we're relating to technology,
Obviously they would get out of date very quickly because
technology evolved so fast, and so we would have an
(09:35):
article of and the examples in an article might be
really kind of embarrassing in in retrospect, Like if you're
doing an article or a podcast about CPUs and the
article is talking about pentium processors, that's kind of embarrassing
because those are dinosaurs. Right. So anyway, we switched over,
(09:57):
and you know, it also turned out that it's it's
a difficult cell to convince someone who's listening to a
podcast to then go to a specific U r L right,
because it all depends on how they're listening. If they're
jogging and they're listening on headphones, they're not going to
stop and pull out their phone and navigate to the website.
(10:18):
If they're driving, I sure as heck hope they aren't
going to stop, uh paying attention to the road and
then try and navigate to this website to read an
article while they're driving. So yeah, it was tough to
use podcasts in this way. And honestly, there could have
been the chance for podcasts at how Stuff works to
(10:39):
just go away because the limited return on investment, But
we stuck with it and we grew, and that would
end up paying off because eventually, not immediately, but over time,
podcasting would become a relevant way of generating revenue all
(11:01):
on its own thanks to advertising. Okay, now, before we
get into that, it's time to have an example. We're
going to actually take an ad break right now. We'll
be right back. Okay. So podcasts when they start off
(11:25):
aren't really monetized beyond being behind a paywall in some
rare instances, but let's skip ahead. Gradually, some brands, particularly
of smaller companies, started seeing the possibility of reaching customers
through podcasts, and that opened up some opportunities on all sides.
(11:45):
One opportunity was to have an ad baked into a podcast.
Another opportunity was to pay for a fully sponsored and
possibly themed episode. That second option is more expensive, and
it also means that a single advertiser pretty much has
domain over the whole episode, so in other words, you
won't hear ads from other brands appear in that episode.
(12:09):
But let's talk about baked in ads or burned in ads,
depending upon whom you're talking to. Now, back in the
old days, there really wasn't any sophisticated content management system
for podcasts. So the way it worked was you would
record your audio, maybe you edit it, you might add
(12:31):
in some music and some other stuff, maybe other effects.
Then you would publish this finished audio file on a
publication platform. That platform would then push the podcasts RSS
feed to the various podcatching services out there, most notably iTunes.
Back in the day, iTunes was the dominant source for podcasts.
(12:55):
In fact that we call them podcasts because of the iPod.
So Apple, while it had not invented either the MP
three player or the podcast, was kind of the the
nexus of all things podcast in the early days. Now
to this day, iTunes is still a really important piece
of the puzzle. Interestingly, a lot of the tech stuff
(13:15):
listeners out there are getting this show through other podcatching
services because I can see that a ton of y'all
are listening on Android devices, which is, you know, awesome,
and I also listen on an Android device. So yeah,
we're kind of an outlier because a lot of podcasts
still get the majority of their traffic through iTunes. All right,
So originally most of the companies that would actually purchase
(13:39):
advertising on podcasts were these smaller companies that could not
necessarily afford a big national campaign on you know, traditional
media like TV and radio, but podcasts also have national
or global reach, and podcasts were not nearly as expensive
(14:01):
to use for advertising. Heck, there were podcasts out there
that had no idea what ad rates to charge or
what metrics to use in order to guide negotiations. It
was really messy and chaotic. Now it would all more
or less get worked out over time, but in those
early days it was It was just confusing because no
(14:23):
one really had any way of of quantifying what add
time on a podcast was worth. Anyway, a baked in
AD is one that's recorded right inside of a show itself.
It is part of the audio file. So you might
be talking about like a transponder one moment. Then you
(14:45):
might say in the podcast, before we go any further,
let's talk about our sponsor blah blah blah, and then
you might transition right into an AD, and it's all
part of the same recording session. It's all part of
the same file. And most of the ads back in
those days were what we would call direct response advertising. Now,
this is a kind of ad that asks the listener
(15:08):
to take some sort of immediate action, such as purchasing
a product or service, and there's typically a code associated
with whichever podcast has the ad in it. And when
you hear me in an ad say something like use
promo code stuff or something like that, that is a
(15:29):
direct response ad. The ads efficacy is largely measured by
how many folks actually went to the trouble of going
to the site and using that promo code. Now, in
the old days, you'd hear a lot of the same
companies advertising across different shows, like Casper Mattresses and Meanis
and Dollar Shave Club and stitch Fix. These are all
(15:53):
great companies. By the way, I actually really liked working
with all of these brands. They were great, and it
was it was kind of a rising tide lifts all
ships because I really believed in the products. So listeners,
if they were using the the code, we're getting products
that I believed in. They were getting a discount, so
(16:14):
that was the benefit to the listeners, and the brands
were getting broader reach across and more customers, so everybody
was winning. So it was kind of like a a
bootstrap approach to business, you know. These were companies that
again probably would have had trouble accessing traditional media on
(16:36):
a national level, and here they were being able to
tap into something that was having an incredible impact. Like
the podcasting experience is a very intimate one. It has
this relationship between host and listener, and especially a host
red ad can have a huge impact on listeners, particularly
the host is being sincere about it. So yeah, it
(16:58):
was this kind of magical com nation right now. Podcasting
was growing in popularity in general. I mean you kept
on seeing news about podcasting his back or the podcasting renaissance,
and you would have people who have been podcasting that
whole time saying, don't call to come back, I've been
here for years. Shout out the Scott Johnson um and
(17:21):
some podcasts were doing really, really well, right Some would
go on to be like the superstars of the medium. Like,
you know, I'm not a fan of his his beliefs
or his delivery, but there's no denying Joe Rogan hit
the stratosphere as far as podcasting is concerned, and he
(17:44):
launched that show I think in two thousand nine. So
this was that's an example of a show the win
to the stratosphere. Here at at I Heart and actually
previously at How Stuff Works. Our big flagship show was
Stuff you Should Know. I'll mention them again in a
little bit. So this opened up the opportunity to do
sponsored and themed episodes because the shows were getting to
(18:06):
a point where if you were an advertiser, and you
are an advertising client maybe who had the money, then
getting a sponsored show could be really attractive because of
the reach of these podcasts. But this is where things
get really tricky, um because this is where you've got
increased overlap between advertising and editorial content, and that can
(18:31):
produce like advertorial content is one of the phrases for it.
It's one I hate, but it is what it's often
used to describe a show that is supposed to combine
the promotion of a sponsor with the content itself. Now, ideally,
(18:52):
a themed podcast, a themed sponsored podcast should appeal to
regular listeners, even if it was themed to promote whatever
sponsor was sponsoring the episode. If it is done poorly,
then the episode is going to come across as a
very long advertisement for the respective sponsor. And ain't no
(19:12):
one out there who loves that. Apart from advertising executives,
who seem to think it's a win, even though that
kind of content almost never performs well once it's released. Now,
there are ways to do a themed sponsored episode well,
but that approach is delicate and needs a really good
level of understanding between the content creators, the advertising reps,
(19:34):
and the sponsor itself in order to make it happen.
And frankly, it always surprises me when I encounter folks
pushing to make a show more explicitly an ad for
a company or its products and services or whatever, because
I maintain audiences are really smart. I mean, we all
know how to spot and add. We've been encountering ads
(19:57):
our entire lives, so of course we know an ad
right away. And if we suspect someone is trying to
pass off and add as quote unquote real content, we
get irritated about it because we feel like the content
creator doesn't respect our intelligence. Right It's like the content
(20:17):
creator is trying to pass off this advertisement as if
it is otherwise content and they would have created anyway,
And the disingenuous nature of that offends a lot of people,
including me. I mean, I I'm likely to bounce off
a video or a podcast if I sense that it's
not a genuine piece of work and is instead an
(20:40):
add masquerading as an episode. Now, all that being said,
some of the best episodes of some podcasts have come
from sponsored and themed episodes. It can be done. It
just takes a real collaborative effort of all the parties
involved and an understanding on the part of the sponsor
and the ad reps that pushing their narrative too hard
(21:02):
is going to have the opposite effect that they want. Now,
let's move on to dynamic ad insertion, which actually I
guess I'll get to after we take this break for
a couple more ads. Okay, dynamic ad insertion. As podcasting
(21:29):
grew in popularity, you had companies that were creating more
sophisticated tools for publishing and hosting podcasts, Like there was
an industry there, so there was an incentive to innovate
in the space. And one tool, one that was already
in use on the Worldwide Web, was dynamic ad insertion,
(21:50):
and it does exactly what it says on the ten.
Dynamic ad insertion is the practice of inserting ads at
the time someone encounters the content. So when someone downloads
a podcast or when they stream an episode, that's when
the AD gets inserted. So instead of having a baked
in AD that was recorded at the time that the
(22:12):
podcast itself was recorded, the dynamic ad insertion tool plops
a current AD into the ad breaks. That means, if
you download an episode today and someone you know downloads
the same episode a year later, the two of you
are going to encounter different ads at the time that
you listen to the show when you hit those AD breaks.
(22:34):
And the way this works from our side is pretty simple.
We create AD breaks in our show now some folks
like yours. Truly, We do that as we record, so
you've heard it in this episode. I just keep an
eye on the time, and when I hit certain time lines,
I will pause to throw in an AD break. We
have UH standards in our our company about how many
(22:59):
AD breaks go into a show based upon how long
the episode is. So if my episode is going to
be longer than say twenty minutes, I know that I
need to put an AD break in every ten minutes
or so. If it's gonna be like five minutes, I
can go to like fifteen minutes or so. It again
depends upon the length of the episode, and I'm not
(23:19):
going to give all the details about it, because one
those change over time, so I can't guarantee that by
the time you listen to this it will be the same.
And too, it really doesn't matter. So I pause my episode,
I'll throw in an ad break, and then my super
editor Torii can, while editing, chop the episode there and
insert a little digital marker, and that digital marker essentially
(23:43):
tells our publication platform here is where you can put
a mid role ad. Mid role is just a type
of ad that appears in the middle of a show.
You also have pre role obviously that happens before a
show starts, and post roll those are ads that play
after a show ends. Then I just picked back up
(24:04):
and carry on until I hit the next benchmark, and
then I insert a new ad break throw and Torii
chops the show there when she's editing and puts in
another digital marker. Now that little digital marker that TRY
adds in is really the secret sauce, and we typically
have parameters set for what our ads can be in
(24:25):
our various positions, So mid role ads tend to be
sixty seconds long each. Now once in a while we
might have a longer ad depending upon the specific AD deal.
Like you could have a two minute AD instead of
a sixty second AD, but then that would essentially take
up two slots in your AD break, Right, So each
(24:47):
AD break allows a certain number of ads per break,
or really a certain amount of AD time per break. Now,
why would you want to use dynamic ads in the
first place. Well, to understand that, it's helpful understand a
little bit about AD deals themselves. Typically, an AD deal
is made to either last a specific amount of time
(25:09):
or more frequently, in order to reach a specific number
of impressions. Now, impressions means the number of times that
particular AD was downloaded or streamed. So let's say we
strike a deal with I don't know, the ACME corporation
from the old Warner Brothers cartoons, and we're trying to
(25:31):
sell anvils. So our deal is to hit one thousand
impressions with this hypothetical AD deal. So ACNE pays us
whatever our AD rate is to reach that impression limit,
and we get to work on delivering those impressions by
getting people to download a hundred thousand episodes or stream
(25:52):
a hundred thousand episodes that have or or you know,
instances that have that AD in them. Now, if you
have a baked in AD where you've actually recorded it
within the body of the podcast and it's not something
that can be easily chopped out, that podcast ad is limited, right.
I mean, it's true that episodes typically see the highest
(26:15):
number of downloads on the first week of publication. After that,
things trail off really really fast. It is rare for
you to see a spike in an old episode unless
something really relevant to that episode happened in the news.
But there is a long tail there. People do go
back and search back catalogs, and they do download and
(26:38):
stream old, old episodes of podcasts. And if an ad
has been baked into a podcast, well, technically that podcast
is still delivering impressions even after the ad deal has concluded.
And advertisers love that because you know, they paid for
a hundred thousand impressions. But if it's a baked an ad,
(27:00):
they're going to keep getting impressions on that ad beyond
that one thousand deal because the ad was baked in.
So anyone downloading that episode years later is going to
hear that old ad and maybe you know, the promo
code is not gonna matter anymore, but the ad might
still drive people to go to that that particular company.
(27:21):
So it's like everything you've got above the one impressions
you got for free, or if you want, you can
think of it as the price per impression continues to
decrease over time. But dynamic ad insertion means that number one,
podcasts can more nimbly switch from serving one ad to
a different ad as various ad deals conclude, and two
(27:45):
they can rely on the back catalog to contribute to
the number of impressions agreed upon with the current advertiser.
So in other words, by swapping out the ads, you
can meet the obligations faster, and then you can sell
that da da da brand new ads. It's a more
lucrative way to do business. Right, So if if only
(28:07):
my newest episodes were able to hold the latest ads,
it would take longer for me to meet my obligation
to the advertiser. But because it goes through the entire
back catalog and people are always downloading old episodes, then
those ads are getting served more frequently because of the
long tail, So I meet that obligation faster, and then
(28:30):
I can conclude one ad deal and go to a
new one. When I say I, I really mean my
sales team. I don't do any of that work, thank goodness,
because I would be terrible at it anyway. This also
means that folks listening are going to hear relevant ads,
even if they're diving into the back catalog. They're not
going to hear an ad for some company that stopped
existing like seven years ago. Now, there are some different
(28:54):
ways of doing this. One way would be to a
mass prerecorded ads that can run across an entire network.
We call these run off network ads. So these would
be ads where the company I Heart in this case,
would have agreed that it would deliver a certain number
of impressions per ad, but it doesn't really matter which
(29:17):
shows that ad appears on. So theoretically my Heart could
put that ad on every show on the network and
push it out there to meet that impression requirement immediately.
It's a lot like the ads that you would encounter
on radio or on television that they aren't made specifically
for one podcast like one show, and they may or
(29:41):
may not be read by a podcast host at all.
It might be produced by some ad company, and no
one that you know of was related to the production
of that ad. That's one way to do it here
at I Heart. Yeah, we do have run of network ads.
We have some of those, and those might run on
certain shows, but not all of them. But we still
(30:02):
largely depend upon host red advertising, so we still have
hosts reading our ads. Like you know, the ads you
encounter on tech Stuff more often than not, those are
ads that I'm doing. It's just that now those ads
that were recording are going effectively into a database of ads,
and the dynamic Ad Insertion tool can pull from and
(30:24):
PLoP those ads into our respective shows, all the episodes
of our respective shows. In fact, so if I do
a read for a specific company, that spot can now
appear on every episode of tech Stuff I have ever published. Now,
it doesn't physically insert the ad into every episode at
that time, It just happens whenever anyone downloads or streams
(30:47):
the episode, that's when the ad gets inserted. Otherwise, you
can think of the ad breaks in these undownloaded episodes
as kind of being ready to go to pop in
whatever relevant ads should go in that space at that time.
This is great for me because it means that I
am delivering the most relevant ads at any given moment,
(31:10):
and that those then cycle off the show once the
ad deal has concluded and new relevant ads can appear,
and I don't have to worry about people listening to
stuff that doesn't exist anymore or that has a promo
code that has long since stopped working. And host red
(31:30):
ads tend to be more valuable than generic prerecorded spots.
When I say generic, I mean an ad that's been
recorded for any show, not for a specific show, right Like,
you could hear that same ad on whatever podcast you downloaded.
It doesn't relate to the show you just listened to.
(31:50):
Now it feels weird for me to talk about this
because you know it's it's how the sausage is made.
But this is info that's readily available if you want
to look for it. It's not like I'm giving away
trade secrets. There are articles dedicated to this kind of stuff,
including articles that quote my boss Conal Burne, the guy
I talked about earlier talking about the value of host
(32:13):
read advertising, because you know that has a real connection
to it to listeners. Also, Connal refers to baked in
ads as burned in ads, so he's one of the
people who says burned in rather than baked in, and
he talks about how those have really big limitations. I
think one reason that our host read ads are seen
(32:35):
to have a lot more value than you know, preprogrammed
ads is here at iHeart, hosts have a ton of
authority when it comes to choosing what ads can run
on their respective shows and which ones can't. So hosts
have the chance to review and accept or reject ads
(32:56):
and sponsors. Times out of a hundred, it all works
really well. Right the host says, yeah, I'm fine with that,
or I would rather not do that, and that's it.
Once in a blue moon, you might get a little pushback.
Happened to me recently. If a particular ad deal is
seen as really crucial for the company, then it might
(33:17):
prompt a deeper discussion rather than just a thumbs up
or thumbs down, so that we can get to the
bottom of where is their resistance and is there a
good reason for it or is there a way to
present this that doesn't have that resistance. So there's a
lot of room for negotiation, and ultimately someone can still
say no. Uh, maybe they compromise, or maybe they just
(33:38):
said listen, this is a hard no for me. I
just can't do it and we move on. So here's
the thing we all understand. Podcasting cannot continue without generating revenue.
Everyone working on the shows has to eat and pay
rent and you know all that kind of stuff, and
you can't do that just for free. So there is
(34:00):
a business. That is why you have to balance the
commerce part. It has to happen or else podcasts don't happen.
So this is really just figuring out the right fit
per show, and the right fit for one show is
not the same as the fit for the next show.
It's again why I'm glad that my Heart does things
the way they do because they cater to the individual
(34:21):
show as opposed to having a cookie cutter approach that
all shows have to follow. So as an example, most
of the time, you are not going to hear me
advertise for any kind of alcohol on this show. I
once did and add for mixers. I want to say
it was one of the rare occasions where I allowed
(34:43):
an alcohol related ad to play on this show. Now,
it's not that I'm strictly anti alcohol. I mean I
do not drink, that's true, but it's that I know
there are a lot of younger folks listening to the podcast,
and I just don't want to advertise alcohol to younger listeners.
That's not who I am. I don't want to do that.
It's the same with tobacco based products or tobacco substitutes.
I don't want to do that either. There have been
(35:05):
a few times where I have allowed an add through
that later on I regretted, but those cases were almost
always my own fault for not looking into a company
or product thoroughly enough before I gave the thumbs up,
and then later on it was brought to my attention, Hey,
that thing you advertised, it's not on the up and up.
(35:26):
It's kind of shady, and I felt awful about it.
And again that was my fault because it didn't do enough.
It wasn't I didn't do the due diligence, and uh,
I try very hard now to do it. Occasionally, you know,
I might slip up, but I try anyway. My point
is that this level of review and approval means that
the ads that do appear on our shows have typically
(35:49):
passed at least some level of scrutiny from the hosts themselves.
If it's not a run of network ad, that's definitely
the case. Even with run of network ads, we're given
the chance to say what out ofgories we absolutely do
not want running on our show and which ones we're
okay with, So we even have a little bit of
control when it comes to that, and this scrutiny is
(36:10):
a reflection of our respect for our listeners. I like
to think that that's what makes the ads on our
shows more valuable. It's because we hosts care about y'all,
and y'all know that we You know, we care about you,
And hopefully the ads you listen when you do listen
and you don't just skip the ad break, are ones
that are potentially helpful for you. You You maybe you find
(36:35):
a new product or service that you didn't even know
you needed. That's when it all works perfectly. And I
keep saying, it doesn't do anyone any good to serve
up bad junkie ads to folks who only get angry
about them. That just hurts everyone down the line. It
doesn't do anyone any good. So I always want to
make sure that ads I do are adding value both
(36:56):
to the advertiser and the sponsor and to the listener
and to the show. Like that's that's my goal. It's
hard to do and it doesn't always work, but that's
the goal anyway. That's the secret sauce behind dynamic ad insertion.
It's a strategy that tons of podcasts are using these days.
(37:17):
For the ones that still use host red ads, it
can be a really useful tool. Now, if you go
strictly programmatic with this approach, where you're just using these
prerecorded ads that have nothing to do with the shows themselves,
you really risk losing some of the special touch that
podcasts have with their audiences. So there is a line
to walk. If you can do what I Heeart does
(37:38):
and use dynamic ad insertion that largely depends upon host
red ads for those specific shows, that's that's the golden touch,
but it requires a scale that's difficult to achieve. My
Heart has been around for ages and has an enormous
podcast network, so it's a little easier for us to
(37:59):
do it then for a smaller network. Also, there are
still a lot of podcasts out there that use some
form of baked in ads. For example, My Brother, My
Brother and Me, which is an incredibly popular comedy podcast,
has an ad break that they call the Money Zone,
and those ads are all baked in. I think, like
(38:19):
I don't think they used dynamic ad insertion in the
Money Zone at all. Um. I definitely know that the
old Money Zone ad breaks are baked in because I
did a deep dive into the back catalog when I
was trying to catch up on the show, and some
of their classic comedy bits are actually contained in the
ad break itself. So if you skip the ad break,
(38:41):
you miss some of their best stuff that just happens
organically as they're riffing on their ads, which means if
they had gone with dynamic ad insertion, those comedy bits
would eventually get swapped out over time and you would
lose some pretty amazing material in the process. Now, I
wish I could provide you with my favorite example of
(39:03):
a Money Zone bit, but it contains language that's inappropriate
for tech stuff, so uh, it's uh, it's it's a
little a little more raunchy than what tech stuff typically is.
It is a very funny bit. It's the ballad of
a fictional character who has a uh, somewhat juvenile name.
(39:24):
That's all I'll say. But it was a very very
funny bit, and again it was in the Money Zone.
So if they had done dynamic ad insertion, then eventually
that whole section would get pulled and swapped out for
something else and you would lose a classic bit of content.
So there are tradeoffs here. Um. It all depends on
the style of ad presentation. And in the case of
(39:47):
my brother, my brother and me, it's actually part of
the comedy show. So you know, your mileage may vary. Alright.
That is the wrap up on how the sausage is
made as far as dynamic ad insertion. Hope you learned something.
I hope you have a deeper appreciation for the way
that podcasts generate revenue. Um, if they're not like direct support,
(40:09):
you know, like a Patreon style or paywall style, then
this is this is something that we have to deal
with in order to bring you content and do also
fulfill our obligations on behalf of the sponsors who support us. Uh.
It's again a delicate ecosystem, but when treated properly, it works.
(40:31):
If you have suggestions for future topics on tech Stuff,
please reach out to me. One way to do that
is to download the I Heart Radio app, which is
free to download, free to use. You can navigate over
to tech Stuff. There's a little microphone icon that you
can click on and leave a voice message up to
thirty seconds in length, Or you can pop on over
to Twitter and send me a message. There the handle
(40:53):
that we use as text Stuff hs W and I'll
talk to you again, Release soon. Y text Stuff is
an I heart Radio production. For more podcasts from I
heart Radio, visit the i heart Radio app, Apple Podcasts,
or wherever you listen to your favorite shows.
Welcome to tech Stuff, a production from my Heart Radio.
Be there and welcome to tech Stuff. I'm your host,
Jonathan Strickland. I'm an executive producer with iHeart Radio and
how the tech are you. I recently got a note
from my editor that my rushed intro is starting to
(00:26):
slurn together to the point where it's completely incomprehensible, so
I'm working to reverse that. You can thank TORII. She's
the reason why uh I I have I have been
curbed of my chaotic behavior. Anyway, Twitter user Ryan Barrier
sent me a message that read quote, Hey, Jonathan, I'd
(00:48):
love to hear about how podcast advertising works. Early on
in your show, I remember hearing the same ad for years.
Toyota Camera not currently a sponsor of this episode. That's
just metorializing. Then it seems they became more dynamic. Now
even old episodes have current ads. Thanks end quote. Well,
(01:08):
thank you, Ryan Barrier. And yes, our podcasts have ads
that stay current. Even if you were to go back
and download a very old episode of tech Stuff, you
would hear current ads in the ad breaks. And as
you say, the ads are dynamic, we call them dynamic
ads are really dynamic ad insertions. But let's start off
(01:31):
with the different kinds of ads that you can encounter
with podcasts, because it's good to know how advertisers think,
how content creators think, and the frankly difficult path of
balancing commerce and art, or in the case of tech stuff,
commerce and the technology podcast made by a twit. Now,
(01:53):
this stuff is not going to relate to ads initially.
I'm going to give a little bit more background, but
it is important to understand to kind of get a
grasp on the evolution of podcasting and then the subsequent
incorporation of ads. Now, in the old old days, most
podcasts were not really monetized, at least not through advertising.
(02:18):
It was a brand new medium, and so typically a
podcast came out of either someone's hobby, so it was
being done just for fun zies, with no expectation that
it was going to generate revenue. In fact, more than
likely it was costing the person who was making the
podcast money, or it was going to be used as
(02:38):
an extension of some other media companies output. There were
a few exceptions. A couple of podcasts set up subscription
models pretty early on, so they were kind of like
an audio magazine. Listeners could pay to download episodes month
to month. So there were some early versions of podcasts
(02:58):
that were supported directly by listeners, and obviously that model
still exists today. There are subscription based podcasts out there
that are behind a paywall in other words, but ads
really would come a bit later for podcasts. So even
though there were some early paywall podcasting, there weren't a
(03:19):
whole lot of podcasts that contain ads early early on.
Let me give you an example of a podcast that
was used for brand extension. Uh, there was a podcast
I used to listen to. It no longer exists. I
mean you can find old episodes, I imagine, but it's
no longer produced. And this was way back in like
the mid two thousand's, before I was ever a podcaster myself.
(03:43):
It was called buzz out Loud and it came from
c Net. Tom Merritt and Molly Wood were the the
anchors of that show, with other hosts and producers also contributing.
The Buzz out Loud show covered tech news and was
part of a c net brand, but it wasn't necessarily
(04:03):
a revenue generating show on its own, at least not
most of the time. Rather, it was helping you know,
introduced the brand of c net to new audiences, and
the hope was that these audiences would then find their
way to c net dot com, where traffic was monetized
through various means like web page ads and whatnot, you know,
(04:26):
all the regular web advertising strategies. Maybe that visitor would
then become a regular at c net, which means they
would also be a regular source of revenue, or rather,
their traffic would be a regular source of revenue. It
all gets a bit wibbly wobbly when we talk about
this stuff. Really, whenever you talk about advertising, there's there's
(04:49):
a level of kind of vague uncertainty in the mix.
When I started podcasting, which was back in the summer
of two thousand eight, it was much the same for
us over at what was then how stuff Works dot Com.
To be clear, how stuff Works dot Com still exists,
but my part in How Stuff Works split off several
(05:12):
years ago and we haven't had any real contact since then.
But back in two thousand and eight, I was a
writer for how stuff Works dot com and I focused
primarily on tech articles. Big surprise there, and our buss
a guy named Conal Burne who has actually been our
boss on and off a few times over the years.
(05:33):
It kind of feels like we would go our separate
ways and then come back and then do it again. Um.
He decided in two thousand and eight that podcasting would
be a good way to extend brand awareness of how
stuff Works dot com. Uh. The first of those podcasts,
technically the first, I believe was brain Stuff, which was
Marshall brains podcast. He was the founder of how stuff
(05:54):
Works dot com, and then later on that podcast would
pass to other hands. But the first big one to
come out that really was the flagship was Stuff You
Should Know Now. It was important to try and extend
the brand of how stuff Works dot com because most
of the traffic coming into the website was from web searches,
(06:18):
primarily Google. So, in other words, most people who are
going to how stuff Works dot com, we're not going
there just to browse articles. Most visitors were not fans
of the site who just wanted to learn about all
sorts of stuff, from tech to history to culture to food.
By the way, how stupp works dot Com still a
fantastic website with amazing, well written, researched articles, and I
(06:43):
highly recommend checking it out if you're of a curious
nature and you want to just learn stuff. But now
most of the people coming to the website had a
specific question that they wanted to answer, like how does
a steam engine work, for example, and they used a
search engine, our site would pop up and they would
come into the site to get their answer from one
(07:03):
of these well written, well researched articles, and then once
they got their answer, they would bounce. Well, while we
loved all the traffic coming into the site through search,
there was no denying that it sure would be nice
to have folks stick around a bit more and brows
and become regular visitors. Also, this is a good time
to mention that search engines change over time. Right. The
(07:25):
Google search algorithm has changed many times over the years,
and whenever there's a change in the algorithm, there's a
change in page rankings, which means you might at one
point have been the dominant player in search results for
various topics, and then once there's a change in the algorithm,
(07:45):
maybe your results appeared lower down on the page or
or worst case scenario, off of page one. Because hardly
anyone goes beyond page one of search results. Hardly anyone
goes below the fold. So not being highly ranked in
SIR could be a death sentence if you were depending
heavily upon traffic coming from search engines. So again a
(08:08):
strong incentive to find a way to bring people over
to the website beyond just searching for a specific answer. Right. So,
the podcasts, while not initially monetize herble directly themselves, we're
seeing almost like an advertising tool for the website. In fact,
(08:29):
when we first launched the podcasts, we had a rule
every episode needed to relate to a specific article on
the website, and we would refer listeners to go and
read those articles in the hopes that they actually would
go check those articles out and then maybe branch out
from there and explore the site. We were trying to
(08:52):
make How Stuff Works a destination site. UH that had
limited success as far as I'm aware. I mean I
wasn't and analytics, so I couldn't really see what, if
any effect this had. However, we did not too long
after that mandate dropped the requirements so that different podcasts
(09:12):
could actually do UH topics that were not directly related
to an article on the site, And we dropped it
immediately over at tech Stuff because a lot of the
articles that were on the site that we're relating to technology,
Obviously they would get out of date very quickly because
technology evolved so fast, and so we would have an
(09:35):
article of and the examples in an article might be
really kind of embarrassing in in retrospect, Like if you're
doing an article or a podcast about CPUs and the
article is talking about pentium processors, that's kind of embarrassing
because those are dinosaurs. Right. So anyway, we switched over,
(09:57):
and you know, it also turned out that it's it's
a difficult cell to convince someone who's listening to a
podcast to then go to a specific U r L right,
because it all depends on how they're listening. If they're
jogging and they're listening on headphones, they're not going to
stop and pull out their phone and navigate to the website.
(10:18):
If they're driving, I sure as heck hope they aren't
going to stop, uh paying attention to the road and
then try and navigate to this website to read an
article while they're driving. So yeah, it was tough to
use podcasts in this way. And honestly, there could have
been the chance for podcasts at how Stuff works to
(10:39):
just go away because the limited return on investment, But
we stuck with it and we grew, and that would
end up paying off because eventually, not immediately, but over time,
podcasting would become a relevant way of generating revenue all
(11:01):
on its own thanks to advertising. Okay, now, before we
get into that, it's time to have an example. We're
going to actually take an ad break right now. We'll
be right back. Okay. So podcasts when they start off
(11:25):
aren't really monetized beyond being behind a paywall in some
rare instances, but let's skip ahead. Gradually, some brands, particularly
of smaller companies, started seeing the possibility of reaching customers
through podcasts, and that opened up some opportunities on all sides.
(11:45):
One opportunity was to have an ad baked into a podcast.
Another opportunity was to pay for a fully sponsored and
possibly themed episode. That second option is more expensive, and
it also means that a single advertiser pretty much has
domain over the whole episode, so in other words, you
won't hear ads from other brands appear in that episode.
(12:09):
But let's talk about baked in ads or burned in ads,
depending upon whom you're talking to. Now, back in the
old days, there really wasn't any sophisticated content management system
for podcasts. So the way it worked was you would
record your audio, maybe you edit it, you might add
(12:31):
in some music and some other stuff, maybe other effects.
Then you would publish this finished audio file on a
publication platform. That platform would then push the podcasts RSS
feed to the various podcatching services out there, most notably iTunes.
Back in the day, iTunes was the dominant source for podcasts.
(12:55):
In fact that we call them podcasts because of the iPod.
So Apple, while it had not invented either the MP
three player or the podcast, was kind of the the
nexus of all things podcast in the early days. Now
to this day, iTunes is still a really important piece
of the puzzle. Interestingly, a lot of the tech stuff
(13:15):
listeners out there are getting this show through other podcatching
services because I can see that a ton of y'all
are listening on Android devices, which is, you know, awesome,
and I also listen on an Android device. So yeah,
we're kind of an outlier because a lot of podcasts
still get the majority of their traffic through iTunes. All right,
So originally most of the companies that would actually purchase
(13:39):
advertising on podcasts were these smaller companies that could not
necessarily afford a big national campaign on you know, traditional
media like TV and radio, but podcasts also have national
or global reach, and podcasts were not nearly as expensive
(14:01):
to use for advertising. Heck, there were podcasts out there
that had no idea what ad rates to charge or
what metrics to use in order to guide negotiations. It
was really messy and chaotic. Now it would all more
or less get worked out over time, but in those
early days it was It was just confusing because no
(14:23):
one really had any way of of quantifying what add
time on a podcast was worth. Anyway, a baked in
AD is one that's recorded right inside of a show itself.
It is part of the audio file. So you might
be talking about like a transponder one moment. Then you
(14:45):
might say in the podcast, before we go any further,
let's talk about our sponsor blah blah blah, and then
you might transition right into an AD, and it's all
part of the same recording session. It's all part of
the same file. And most of the ads back in
those days were what we would call direct response advertising. Now,
this is a kind of ad that asks the listener
(15:08):
to take some sort of immediate action, such as purchasing
a product or service, and there's typically a code associated
with whichever podcast has the ad in it. And when
you hear me in an ad say something like use
promo code stuff or something like that, that is a
(15:29):
direct response ad. The ads efficacy is largely measured by
how many folks actually went to the trouble of going
to the site and using that promo code. Now, in
the old days, you'd hear a lot of the same
companies advertising across different shows, like Casper Mattresses and Meanis
and Dollar Shave Club and stitch Fix. These are all
(15:53):
great companies. By the way, I actually really liked working
with all of these brands. They were great, and it
was it was kind of a rising tide lifts all
ships because I really believed in the products. So listeners,
if they were using the the code, we're getting products
that I believed in. They were getting a discount, so
(16:14):
that was the benefit to the listeners, and the brands
were getting broader reach across and more customers, so everybody
was winning. So it was kind of like a a
bootstrap approach to business, you know. These were companies that
again probably would have had trouble accessing traditional media on
(16:36):
a national level, and here they were being able to
tap into something that was having an incredible impact. Like
the podcasting experience is a very intimate one. It has
this relationship between host and listener, and especially a host
red ad can have a huge impact on listeners, particularly
the host is being sincere about it. So yeah, it
(16:58):
was this kind of magical com nation right now. Podcasting
was growing in popularity in general. I mean you kept
on seeing news about podcasting his back or the podcasting renaissance,
and you would have people who have been podcasting that
whole time saying, don't call to come back, I've been
here for years. Shout out the Scott Johnson um and
(17:21):
some podcasts were doing really, really well, right Some would
go on to be like the superstars of the medium. Like,
you know, I'm not a fan of his his beliefs
or his delivery, but there's no denying Joe Rogan hit
the stratosphere as far as podcasting is concerned, and he
(17:44):
launched that show I think in two thousand nine. So
this was that's an example of a show the win
to the stratosphere. Here at at I Heart and actually
previously at How Stuff Works. Our big flagship show was
Stuff you Should Know. I'll mention them again in a
little bit. So this opened up the opportunity to do
sponsored and themed episodes because the shows were getting to
(18:06):
a point where if you were an advertiser, and you
are an advertising client maybe who had the money, then
getting a sponsored show could be really attractive because of
the reach of these podcasts. But this is where things
get really tricky, um because this is where you've got
increased overlap between advertising and editorial content, and that can
(18:31):
produce like advertorial content is one of the phrases for it.
It's one I hate, but it is what it's often
used to describe a show that is supposed to combine
the promotion of a sponsor with the content itself. Now, ideally,
(18:52):
a themed podcast, a themed sponsored podcast should appeal to
regular listeners, even if it was themed to promote whatever
sponsor was sponsoring the episode. If it is done poorly,
then the episode is going to come across as a
very long advertisement for the respective sponsor. And ain't no
(19:12):
one out there who loves that. Apart from advertising executives,
who seem to think it's a win, even though that
kind of content almost never performs well once it's released. Now,
there are ways to do a themed sponsored episode well,
but that approach is delicate and needs a really good
level of understanding between the content creators, the advertising reps,
(19:34):
and the sponsor itself in order to make it happen.
And frankly, it always surprises me when I encounter folks
pushing to make a show more explicitly an ad for
a company or its products and services or whatever, because
I maintain audiences are really smart. I mean, we all
know how to spot and add. We've been encountering ads
(19:57):
our entire lives, so of course we know an ad
right away. And if we suspect someone is trying to
pass off and add as quote unquote real content, we
get irritated about it because we feel like the content
creator doesn't respect our intelligence. Right It's like the content
(20:17):
creator is trying to pass off this advertisement as if
it is otherwise content and they would have created anyway,
And the disingenuous nature of that offends a lot of people,
including me. I mean, I I'm likely to bounce off
a video or a podcast if I sense that it's
not a genuine piece of work and is instead an
(20:40):
add masquerading as an episode. Now, all that being said,
some of the best episodes of some podcasts have come
from sponsored and themed episodes. It can be done. It
just takes a real collaborative effort of all the parties
involved and an understanding on the part of the sponsor
and the ad reps that pushing their narrative too hard
(21:02):
is going to have the opposite effect that they want. Now,
let's move on to dynamic ad insertion, which actually I
guess I'll get to after we take this break for
a couple more ads. Okay, dynamic ad insertion. As podcasting
(21:29):
grew in popularity, you had companies that were creating more
sophisticated tools for publishing and hosting podcasts, Like there was
an industry there, so there was an incentive to innovate
in the space. And one tool, one that was already
in use on the Worldwide Web, was dynamic ad insertion,
(21:50):
and it does exactly what it says on the ten.
Dynamic ad insertion is the practice of inserting ads at
the time someone encounters the content. So when someone downloads
a podcast or when they stream an episode, that's when
the AD gets inserted. So instead of having a baked
in AD that was recorded at the time that the
(22:12):
podcast itself was recorded, the dynamic ad insertion tool plops
a current AD into the ad breaks. That means, if
you download an episode today and someone you know downloads
the same episode a year later, the two of you
are going to encounter different ads at the time that
you listen to the show when you hit those AD breaks.
(22:34):
And the way this works from our side is pretty simple.
We create AD breaks in our show now some folks
like yours. Truly, We do that as we record, so
you've heard it in this episode. I just keep an
eye on the time, and when I hit certain time lines,
I will pause to throw in an AD break. We
have UH standards in our our company about how many
(22:59):
AD breaks go into a show based upon how long
the episode is. So if my episode is going to
be longer than say twenty minutes, I know that I
need to put an AD break in every ten minutes
or so. If it's gonna be like five minutes, I
can go to like fifteen minutes or so. It again
depends upon the length of the episode, and I'm not
(23:19):
going to give all the details about it, because one
those change over time, so I can't guarantee that by
the time you listen to this it will be the same.
And too, it really doesn't matter. So I pause my episode,
I'll throw in an ad break, and then my super
editor Torii can, while editing, chop the episode there and
insert a little digital marker, and that digital marker essentially
(23:43):
tells our publication platform here is where you can put
a mid role ad. Mid role is just a type
of ad that appears in the middle of a show.
You also have pre role obviously that happens before a
show starts, and post roll those are ads that play
after a show ends. Then I just picked back up
(24:04):
and carry on until I hit the next benchmark, and
then I insert a new ad break throw and Torii
chops the show there when she's editing and puts in
another digital marker. Now that little digital marker that TRY
adds in is really the secret sauce, and we typically
have parameters set for what our ads can be in
(24:25):
our various positions, So mid role ads tend to be
sixty seconds long each. Now once in a while we
might have a longer ad depending upon the specific AD deal.
Like you could have a two minute AD instead of
a sixty second AD, but then that would essentially take
up two slots in your AD break, Right, So each
(24:47):
AD break allows a certain number of ads per break,
or really a certain amount of AD time per break. Now,
why would you want to use dynamic ads in the
first place. Well, to understand that, it's helpful understand a
little bit about AD deals themselves. Typically, an AD deal
is made to either last a specific amount of time
(25:09):
or more frequently, in order to reach a specific number
of impressions. Now, impressions means the number of times that
particular AD was downloaded or streamed. So let's say we
strike a deal with I don't know, the ACME corporation
from the old Warner Brothers cartoons, and we're trying to
(25:31):
sell anvils. So our deal is to hit one thousand
impressions with this hypothetical AD deal. So ACNE pays us
whatever our AD rate is to reach that impression limit,
and we get to work on delivering those impressions by
getting people to download a hundred thousand episodes or stream
(25:52):
a hundred thousand episodes that have or or you know,
instances that have that AD in them. Now, if you
have a baked in AD where you've actually recorded it
within the body of the podcast and it's not something
that can be easily chopped out, that podcast ad is limited, right.
I mean, it's true that episodes typically see the highest
(26:15):
number of downloads on the first week of publication. After that,
things trail off really really fast. It is rare for
you to see a spike in an old episode unless
something really relevant to that episode happened in the news.
But there is a long tail there. People do go
back and search back catalogs, and they do download and
(26:38):
stream old, old episodes of podcasts. And if an ad
has been baked into a podcast, well, technically that podcast
is still delivering impressions even after the ad deal has concluded.
And advertisers love that because you know, they paid for
a hundred thousand impressions. But if it's a baked an ad,
(27:00):
they're going to keep getting impressions on that ad beyond
that one thousand deal because the ad was baked in.
So anyone downloading that episode years later is going to
hear that old ad and maybe you know, the promo
code is not gonna matter anymore, but the ad might
still drive people to go to that that particular company.
(27:21):
So it's like everything you've got above the one impressions
you got for free, or if you want, you can
think of it as the price per impression continues to
decrease over time. But dynamic ad insertion means that number one,
podcasts can more nimbly switch from serving one ad to
a different ad as various ad deals conclude, and two
(27:45):
they can rely on the back catalog to contribute to
the number of impressions agreed upon with the current advertiser.
So in other words, by swapping out the ads, you
can meet the obligations faster, and then you can sell
that da da da brand new ads. It's a more
lucrative way to do business. Right, So if if only
(28:07):
my newest episodes were able to hold the latest ads,
it would take longer for me to meet my obligation
to the advertiser. But because it goes through the entire
back catalog and people are always downloading old episodes, then
those ads are getting served more frequently because of the
long tail, So I meet that obligation faster, and then
(28:30):
I can conclude one ad deal and go to a
new one. When I say I, I really mean my
sales team. I don't do any of that work, thank goodness,
because I would be terrible at it anyway. This also
means that folks listening are going to hear relevant ads,
even if they're diving into the back catalog. They're not
going to hear an ad for some company that stopped
existing like seven years ago. Now, there are some different
(28:54):
ways of doing this. One way would be to a
mass prerecorded ads that can run across an entire network.
We call these run off network ads. So these would
be ads where the company I Heart in this case,
would have agreed that it would deliver a certain number
of impressions per ad, but it doesn't really matter which
(29:17):
shows that ad appears on. So theoretically my Heart could
put that ad on every show on the network and
push it out there to meet that impression requirement immediately.
It's a lot like the ads that you would encounter
on radio or on television that they aren't made specifically
for one podcast like one show, and they may or
(29:41):
may not be read by a podcast host at all.
It might be produced by some ad company, and no
one that you know of was related to the production
of that ad. That's one way to do it here
at I Heart. Yeah, we do have run of network ads.
We have some of those, and those might run on
certain shows, but not all of them. But we still
(30:02):
largely depend upon host red advertising, so we still have
hosts reading our ads. Like you know, the ads you
encounter on tech Stuff more often than not, those are
ads that I'm doing. It's just that now those ads
that were recording are going effectively into a database of ads,
and the dynamic Ad Insertion tool can pull from and
(30:24):
PLoP those ads into our respective shows, all the episodes
of our respective shows. In fact, so if I do
a read for a specific company, that spot can now
appear on every episode of tech Stuff I have ever published. Now,
it doesn't physically insert the ad into every episode at
that time, It just happens whenever anyone downloads or streams
(30:47):
the episode, that's when the ad gets inserted. Otherwise, you
can think of the ad breaks in these undownloaded episodes
as kind of being ready to go to pop in
whatever relevant ads should go in that space at that time.
This is great for me because it means that I
am delivering the most relevant ads at any given moment,
(31:10):
and that those then cycle off the show once the
ad deal has concluded and new relevant ads can appear,
and I don't have to worry about people listening to
stuff that doesn't exist anymore or that has a promo
code that has long since stopped working. And host red
(31:30):
ads tend to be more valuable than generic prerecorded spots.
When I say generic, I mean an ad that's been
recorded for any show, not for a specific show, right Like,
you could hear that same ad on whatever podcast you downloaded.
It doesn't relate to the show you just listened to.
(31:50):
Now it feels weird for me to talk about this
because you know it's it's how the sausage is made.
But this is info that's readily available if you want
to look for it. It's not like I'm giving away
trade secrets. There are articles dedicated to this kind of stuff,
including articles that quote my boss Conal Burne, the guy
I talked about earlier talking about the value of host
(32:13):
read advertising, because you know that has a real connection
to it to listeners. Also, Connal refers to baked in
ads as burned in ads, so he's one of the
people who says burned in rather than baked in, and
he talks about how those have really big limitations. I
think one reason that our host read ads are seen
(32:35):
to have a lot more value than you know, preprogrammed
ads is here at iHeart, hosts have a ton of
authority when it comes to choosing what ads can run
on their respective shows and which ones can't. So hosts
have the chance to review and accept or reject ads
(32:56):
and sponsors. Times out of a hundred, it all works
really well. Right the host says, yeah, I'm fine with that,
or I would rather not do that, and that's it.
Once in a blue moon, you might get a little pushback.
Happened to me recently. If a particular ad deal is
seen as really crucial for the company, then it might
(33:17):
prompt a deeper discussion rather than just a thumbs up
or thumbs down, so that we can get to the
bottom of where is their resistance and is there a
good reason for it or is there a way to
present this that doesn't have that resistance. So there's a
lot of room for negotiation, and ultimately someone can still
say no. Uh, maybe they compromise, or maybe they just
(33:38):
said listen, this is a hard no for me. I
just can't do it and we move on. So here's
the thing we all understand. Podcasting cannot continue without generating revenue.
Everyone working on the shows has to eat and pay
rent and you know all that kind of stuff, and
you can't do that just for free. So there is
(34:00):
a business. That is why you have to balance the
commerce part. It has to happen or else podcasts don't happen.
So this is really just figuring out the right fit
per show, and the right fit for one show is
not the same as the fit for the next show.
It's again why I'm glad that my Heart does things
the way they do because they cater to the individual
(34:21):
show as opposed to having a cookie cutter approach that
all shows have to follow. So as an example, most
of the time, you are not going to hear me
advertise for any kind of alcohol on this show. I
once did and add for mixers. I want to say
it was one of the rare occasions where I allowed
(34:43):
an alcohol related ad to play on this show. Now,
it's not that I'm strictly anti alcohol. I mean I
do not drink, that's true, but it's that I know
there are a lot of younger folks listening to the podcast,
and I just don't want to advertise alcohol to younger listeners.
That's not who I am. I don't want to do that.
It's the same with tobacco based products or tobacco substitutes.
I don't want to do that either. There have been
(35:05):
a few times where I have allowed an add through
that later on I regretted, but those cases were almost
always my own fault for not looking into a company
or product thoroughly enough before I gave the thumbs up,
and then later on it was brought to my attention, Hey,
that thing you advertised, it's not on the up and up.
(35:26):
It's kind of shady, and I felt awful about it.
And again that was my fault because it didn't do enough.
It wasn't I didn't do the due diligence, and uh,
I try very hard now to do it. Occasionally, you know,
I might slip up, but I try anyway. My point
is that this level of review and approval means that
the ads that do appear on our shows have typically
(35:49):
passed at least some level of scrutiny from the hosts themselves.
If it's not a run of network ad, that's definitely
the case. Even with run of network ads, we're given
the chance to say what out ofgories we absolutely do
not want running on our show and which ones we're
okay with, So we even have a little bit of
control when it comes to that, and this scrutiny is
(36:10):
a reflection of our respect for our listeners. I like
to think that that's what makes the ads on our
shows more valuable. It's because we hosts care about y'all,
and y'all know that we You know, we care about you,
And hopefully the ads you listen when you do listen
and you don't just skip the ad break, are ones
that are potentially helpful for you. You You maybe you find
(36:35):
a new product or service that you didn't even know
you needed. That's when it all works perfectly. And I
keep saying, it doesn't do anyone any good to serve
up bad junkie ads to folks who only get angry
about them. That just hurts everyone down the line. It
doesn't do anyone any good. So I always want to
make sure that ads I do are adding value both
(36:56):
to the advertiser and the sponsor and to the listener
and to the show. Like that's that's my goal. It's
hard to do and it doesn't always work, but that's
the goal anyway. That's the secret sauce behind dynamic ad insertion.
It's a strategy that tons of podcasts are using these days.
(37:17):
For the ones that still use host red ads, it
can be a really useful tool. Now, if you go
strictly programmatic with this approach, where you're just using these
prerecorded ads that have nothing to do with the shows themselves,
you really risk losing some of the special touch that
podcasts have with their audiences. So there is a line
to walk. If you can do what I Heeart does
(37:38):
and use dynamic ad insertion that largely depends upon host
red ads for those specific shows, that's that's the golden touch,
but it requires a scale that's difficult to achieve. My
Heart has been around for ages and has an enormous
podcast network, so it's a little easier for us to
(37:59):
do it then for a smaller network. Also, there are
still a lot of podcasts out there that use some
form of baked in ads. For example, My Brother, My
Brother and Me, which is an incredibly popular comedy podcast,
has an ad break that they call the Money Zone,
and those ads are all baked in. I think, like
(38:19):
I don't think they used dynamic ad insertion in the
Money Zone at all. Um. I definitely know that the
old Money Zone ad breaks are baked in because I
did a deep dive into the back catalog when I
was trying to catch up on the show, and some
of their classic comedy bits are actually contained in the
ad break itself. So if you skip the ad break,
(38:41):
you miss some of their best stuff that just happens
organically as they're riffing on their ads, which means if
they had gone with dynamic ad insertion, those comedy bits
would eventually get swapped out over time and you would
lose some pretty amazing material in the process. Now, I
wish I could provide you with my favorite example of
(39:03):
a Money Zone bit, but it contains language that's inappropriate
for tech stuff, so uh, it's uh, it's it's a
little a little more raunchy than what tech stuff typically is.
It is a very funny bit. It's the ballad of
a fictional character who has a uh, somewhat juvenile name.
(39:24):
That's all I'll say. But it was a very very
funny bit, and again it was in the Money Zone.
So if they had done dynamic ad insertion, then eventually
that whole section would get pulled and swapped out for
something else and you would lose a classic bit of content.
So there are tradeoffs here. Um. It all depends on
the style of ad presentation. And in the case of
(39:47):
my brother, my brother and me, it's actually part of
the comedy show. So you know, your mileage may vary. Alright.
That is the wrap up on how the sausage is
made as far as dynamic ad insertion. Hope you learned something.
I hope you have a deeper appreciation for the way
that podcasts generate revenue. Um, if they're not like direct support,
(40:09):
you know, like a Patreon style or paywall style, then
this is this is something that we have to deal
with in order to bring you content and do also
fulfill our obligations on behalf of the sponsors who support us. Uh.
It's again a delicate ecosystem, but when treated properly, it works.
(40:31):
If you have suggestions for future topics on tech Stuff,
please reach out to me. One way to do that
is to download the I Heart Radio app, which is
free to download, free to use. You can navigate over
to tech Stuff. There's a little microphone icon that you
can click on and leave a voice message up to
thirty seconds in length, Or you can pop on over
to Twitter and send me a message. There the handle
(40:53):
that we use as text Stuff hs W and I'll
talk to you again, Release soon. Y text Stuff is
an I heart Radio production. For more podcasts from I
heart Radio, visit the i heart Radio app, Apple Podcasts,
or wherever you listen to your favorite shows.
TechStuff News
Hosts And Creators
Oz Woloshyn
Karah Preiss
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