Startups like Podtrac and Podshow say they
are having success pitching advertisers to spend dollars in
podcasts. But neither has announced a
multi-million dollar deal, yet. And probably won't for some time. Will program producers have patience, or will their podcasts fade away?
"It's going to take at least 12 months for us to get
past the 'test' phase," said Mark McCrery, co-founder of Washington,
DC-based Podtrac. With
experience that includes a stint at Grey Advertising, McCrery said his firm has
been writing podcast sponsor business for a number of podcasts in the range of
$10,000 to $30,000.
"Some ad agencies have media budgets for testing,"
he explained. But it’s going to take
time for experimental results to produce big orders. "They need to have a good
experience." McCrery says the planning and budgeting process inside
companies and agencies can take 1 to 2 years. So, it's possible podcast ad marketers may run a test, get good results,
and then be told to come back in 9 months.
"I think a year is when we will see significant ad
budgets coming into podcasting, resulting in about 50% to 75% of ad inventory
sold across a majority of podcasts," McCrery added.
Consider the huge $3 billion ad budget at General Motors.
Betsy Lazar, GM's executive director of advertising and media operations, told
the Wall Street Journal some of the company's marketing dollars have already
moved out of newspapers to the Web. She is also high on prospects for video on
demand, "the next big explosion" she called it. While GM is, itself using podcasts for promotion, Lazar wasn't
quoted saying she's ready to spend money to advertise on third-party produced
programs.
Some companies can move quickly. GoDaddy.com, EarthLink and
Go to Meeting are among the most visible podcast advertisers. Direct marketers like these are always
looking for customers who will immediately click and buy. So GoDaddy has been all over the PodShow Network's shows, including Adam Curry's "Daily Source Code." Ads for Go to Meeting's online meeting
software are currently airing on the Apple News Now podcast.
The PodShow Network said it's recently inked ad deals with
three companies. "Naturally, they’re showing up in shows with relevant
demographic matches," said spokesman Aaron Burcell. Golden Palace Casino is advertising in the
Dawn and Drew Show, Nature's Cure's acne medication is
being promoted on EMO Girl Talk, and Uncle Ben's rice
products are advertising in Mommycast and A Guy, A Girl, and
a Bottle.
How much any sponsor is paying is difficult to know. Podtrac's McCrery laments that one buyer went
on Google to find the going rates for podcasts. A similar search
turned up estimates of $10-$40 per thousand listeners. McCrery says they're not
accurate. "The fact is, there is
not yet a stable market rate." Michael Geoghegan, a podcasting consultant for businesses, counsels podcasters to ask for what they're worth, "not what is offered."
It may well be that podcast ad rates will be higher than
$10. An EBay auction for five :30
commercials on Rocketboom.com brought a winning bid of $40,000. That worked out to a $40 CPM. EarthLink reportedly also paid $40,000 for a
week's flight on Rocketboom.
One reason podcast advertising is not terribly visible, or
audible, on some of the most popular podcasts like Leo Laporte's
"This Week in Tech" is their own success. With millions of downloads a month, an ad
agency's $20,000 "testing budget" doesn't go very far. Which is why, Podtrac's McCrery says he's
placed commercials on smaller circulation shows like Cinecast, Slashdot Review, and Indiefeed.
Podtrac's largest advertiser has been Honda Motors, which
has a five second video spot for its 2007 Fit automobile in FlashTV.com, a podcast featuring examples of
animation. Here's the Honda audio.
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