How Podcasts Became the Ultimate Customer Acquisition Tool

In an era of flattening media and pandemic, podcast sponsorships are a goodwill goldmine.

There are two universal truths about podcasts: The first is that you’re never going to find your headphones when you’re planning to listen to one. The other is that, inevitably, at a critical moment, the podcast is going to be interrupted so that your favorite hosts can read a clever ad.

Unlike those who reflexively skip ahead or tune out when commercials appear on television, the podcast sponsorship game is proving to be uniquely different and uniquely effective, especially for DTC companies looking to make a splash. Podcast ad spends headed north of the $500-million range for the first time last year and are only going up as the medium continues to grow in popularity. 

Indeed, a study released this week by the consulting firm IAB and Price Waterhouse Coopers predicts that podcast advertising revenue will jump by nearly 15% this year, “nearing $1 billion.” Even as coronavirus has interrupted commutes and routines, consumer affection for podcasts have not changed. Following a dip in March, downloads have strongly rebounded

Not Just Advertising, But Advertising Well

Of course, marketeers are well known to throw money at plenty of popular trends. What makes all the difference, however, is how well the ads fit the platforms. And this is where companies and podcasts have been excelling.

According to a 2019 study by Nielsen, researchers found that audiences believe brands and podcasters are doing a good job of plugging ads into podcast content. “Sixty-four percent (64%) of respondents agreed when asked if they think the ad was a good fit with the content of the podcast,” the study found. 

Whether it’s a natural fit between brand and podcast (think DTC wellness brand Athletic Greens’ spots on the Hurdle fitness podcast) or a clever fit (think DTC bra-maker ThirdLove on Dolly Parton's America), podcasts are proving to an opportunity for brands to connect with their target audiences on a highly personalized level. And it certainly beats being served the exact same ad over and over and over again while streaming a show on Hulu.

The Goodwill Goldmine 

But there's more customer acquisition than a good fit, where it's an ad or a pair of shorts, especially right now. With a world in tumult, politically and physically, an already fracturing advertising structure has been dealt major shocks to the system. Between Facebook ad boycotts, pressure to weigh in on highly charged political issues, and the question of how to address a global pandemic, whatever playbooks did exist have been shredded. 

Leading the way through a surreal and difficult few months have been podcast sponsorships, which serve as a relatively safe haven, especially among the digital-first upstarts. With consumption returning to pre-pandemic levels, media buying in the podcast space is up. And, as Max Willens at DigiDay pointed out this week, “Podcast believers like DTC brands powered much of that growth.”

For now, what separates underdog brands from the heavyweights is similar to what separates podcasts from clunkier, corporate media: Both share a distinctive capacity to generate goodwill among consumers. In a time where optimism seems to be in quarantine, that accounts for more engagement and value than can be conventionally quantified.

In short, podcast fans become brand fans, sometimes for life.  “An authentic partnership with a podcast boosts both parties,” said Julie Farley, a publicity manager at the DTC fashion resale platform Thred Up, which advertises on podcasts with primarily female audiences. “It reaffirms listeners’ commitment to supporting the podcast and generates goodwill for us.”