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As audio steadily emerges as a more dominant digital medium for creators across industries, podcast revenue hit a record $314 million in 2017, climbing a notable 86% from 2016.
With an increasing number of voices and franchises breaking into the market, this total is projected to surpass a staggering $600 million by 2020.
The podcasting space has shown such promise that top streaming services like Spotify and Apple Music have launched dedicated verticals to developing original podcast programming with prominent personalities, in addition to acquiring shows rapidly rising in popularity.
Powerhouse podcast companies like Loud Speakers Network, Midroll and Gimlet Media are also reaping the benefits of more global brands investing bigger budgets into strategic partnerships, expansive campaigns and collaboratively developing original co-branded content. Seeing the thriving success of several shows across categories, Gimlet has expanded to begin selling the television and film rights to its slate of award-winning narrative podcasts to major cable networks and studios alike.
Despite the space proving to be highly lucrative with limitless potential, the industry has suffered from an unspoken lack of representation for a primary segment responsible for driving a significant percentage of market growth. Witnessed with evident success of standout shows like The Brilliant Idiots, The Joe Budden Podcast, Lip Service, Rap Radar, The Read, Drink Champs and Another Round — podcasts anchored by multicultural talent have undoubtedly fueled the growth of entertainment and culture segments. Often beginning as independent imprints distributed through YouTube or incubated from within a media company, the majority of multicultural podcasts building massive audiences haven’t been able to sufficiently capitalize on the abundance of ad dollars and other available revenue until ultimately selling their rights to corporate giants, streaming services or third-party distributors.
From the point of acquisition or signing licensing deals, big corporations effectively deploy sales teams to capture millions in annual revenue, with talent forced to settle for a competitive salary or a small fraction of earnings through partnership programs and rev splits. This common example of perceived success has quietly stripped creators from the ability to remain owners of their work, become vertically integrated and remove the cap on their earning potential.
More notably, as media continues transitioning into a mobile-first landscape driven by curation and on-demand expediences, the paradigm is shifting from content as entertainment to content as a utility. Consumers are seeking more than entertaining shows, looking for content that serves them in the moment — providing shareable pieces of insight, inspiration and information that can enhance their everyday experiences. For multimedia content creators, podcasters in particular, this only amplifies the importance of establishing your own audience of loyal supporters and creating a direct-to-consumer business model. Seeing this tremendous void and opportunity in the market, one experienced advertising executive stepped out to launch the first full-service agency servicing the multicultural segment.
Founded by Gary Coichy, POD Digital Media stands as the first full-service agency solely dedicated to servicing multicultural podcasters and their programs. The company works in partnership with leading shows and talent to identify, broker and secure cross-platform brand deals. Positioned as agents and representatives, POD allows multicultural podcasters to remain independent or sign with top networks and retain ownership of their intellectual property, while still being able to substantially scale and monetize their brands.
After announcing the company earlier his year, the agency is already on pace to generate over $1.8 million in brand deals in just six months, representing a current roster of 420 podcasts at all levels that collectively account for over 7 million weekly streams. POD collaborates with podcasters spanning across music, sports, politics, entrepreneurship and women empowerment.
I spoke with Gary about the vision behind his company, disrupting the podcasting space and how the multicultural segment is emerging to dominate the industry.
Mitchell: What was the specific void or opportunity you saw that inspired the idea behind your company?
Gary: The opportunity presented itself while working as an executive at Laundry Service, the last agency I worked for. We were looking for innovative programs to grow and retain the business for Carol’s Daughter. Understanding the growing power of podcasts and the audience driving the space, I knew it represented the consumer segment we were trying to reach — African-American and Hispanic women. So, we saw it as a great opportunity. When I reached out to all the podcast networks, they had very limited rosters of shows reaching that audience. That was definitely a light bulb moment for me. As you look and see what the podcast space is becoming and the voices shaping it, why would the biggest networks in the industry not represent the multicultural segment? Also, why are they not talking to the multicultural podcasters growing in popularity that reach these prime consumer segments and look to partner with them? Studies show that the multicultural audience represents the most active consumer base, and also represents that highest quality content across categories. Instead of trying to convince other networks to change their approach, I saw it as an opportunity to create the space and launch a necessary agency that didn’t exist.
Mitchell: Coming from the advertising industry and understanding how much brand dollars power the digital media space — Describe the specific services you provide and how you help both brands and podcasters?
Gary: In relation to podcasters, some of them are creating this content out of their living room, so they may not necessarily have the professional structure, access or resources the top podcasters have. That makes a large part of what we do educational. The knowledge and insight we provide revolves around teaching them how to effectively structure their show, package their program and understand how to create content with the intention of engaging brands. We teach them about data, metrics, and other key elements of the conversation they would have with brands. For example, many podcasters don’t know what a CPM is. CPM is the model in which value is measured in the space, in terms of cost per impression. Most see it as I have a podcast that’s popular and growing, so why would a brand only offer me $500? It’s because they don’t understand how digital data works from a pricing perspective, so we teach them that aspect of it. We also teach them about the business behind volume and frequency. Most think of podcasting in terms of seasonality, when they really should be focused on planning around releasing on a weekly or bi-weekly basis.
Mitchell: What are some other important insights or lessons you make it a point to teach both brands and podcasters adjusting to the industry?
Gary: We also work with podcasters to make sure the content they’re creating aligns with the potential brands or partners they want to work with. We show them best practices for creating and distributing content, how to position themselves, and how to properly price their content so they can develop an accurate valuation. From the brand perspective, we try to teach them that the multicultural audience represents over $3 trillion in purchasing power, so you can’t just affiliate yourself with a black artist or athlete and think it will accomplish your goals. The way you talk to your general market audience is not the way you speak to an African-American male or Hispanic female. Coming back to the Carol’s Daughter experience, when they were saying we don’t have multicultural shows, but have shows that reach over 2 million people per week — We had to tell them there was no way a young African-American woman was going to listen to an older white man about the products they should use on their hair. It just doesn’t work. We also teach them that when you step into this podcast space, you have to give podcasters the freedom and flexibility to authentically speak to their audience. It can’t be a forced campaign from a brand that is perceivably trying to force their way into the multicultural segment.
Mitchell: What have been some of the biggest challenges you’ve faced getting the company off of the ground and solidifying yourself in the market?
Gary: When it comes to creators, having 70,000 or 2 million followers across social media doesn’t mean it will directly translate to podcast listeners. Getting podcasters to understand that the brand they’ve built on another platform won’t always carry over is challenging. It requires another layer of education. Just because a brand is paying you $10,000 to post on Instagram, audio is an entirely different platform. You have to see it differently until it grows to match the level of your Instagram and you can demand a certain amount of dollars. Also, the same podcasters who have 50,000 followers on Instagram or Twitter feel like they should automatically be working with Spotify, but that’s not necessarily the case. They’re thinking that because they have some clout on social media, they need to have bigger affiliations or they aren’t as credible. However, big affiliations don’t necessarily mean big dollars. It won’t mean big dollars until you grow the numbers to a place that is enticing to advertisers. Some of those big podcast networks won’t speak with creators who have less than 50,000 weekly listeners, because it’s not worth their time. Once you understand how media works, and the metrics behind it, you would understand the numbers you need to hit for the top networks and platforms to even have a conversation with you.
Mitchell: What are some of the biggest mistakes or misconceptions you believe brands are making when breaking into this space?
Gary: From a brand perspective, most companies think giving a podcaster a few talking points to mention during their show is going to do the trick. We definitely have to let them know that every brand deal has to be a true partnership. This is not just a quick, one-and-done situation. As a brand, you also can’t just affiliate yourself with one or two podcasters and think you will get your goals accomplished. Therefore, the mistake they often make is wanting to be affiliated with one podcaster and do one show, then move on to everything else they’re doing. That doesn’t work well. Our job2 then becomes less about convincing them from a budget perspective, but more so making sure each campaign delivers a clear and concise brand message. It’s the same way with a major media company, you take a full-funnel approach. The first two weeks are all about awareness and education — This is what the product is, this is who we are, this is why our brand is important, and this is why we want to impact your community. Then, in the following weeks, it’s about moving them down the funnel after they’ve been educated about your company and product. Now, the conversations you have with consumers feel more like conversations between friends. Now that there is both an awareness and consideration, you can move more into the acquisition phase. Now that you know about us and love us, take this path to purchase our products and explore more. The same data-driven, programmatic approach you apply to social media should be applied in the podcasting space. This is the best platform, through audio, to have direct conversations with consumers. That means brands must invest in more than one epidote and commit to longer-term partnerships to achieve maximum results.
Mitchell: The average podcaster without knowledge of how the business works may simply measures the value of their brand by two things: money and exposure — What are the biggest mistakes you see promising podcasters make?
Gary: The mistake I often see podcasters make is that they want to monetize their content the first opportunity they get. If there’s a check attached, they’re saying yes to everything. You can’t say yes to everything. When you look at the brands attracted to your show, how do they align with the content you’re creating and the audience you serve? If you have a content calendar, looking at the shows coming out over the next several weeks, how do you align these brands with the specific topics or themes you’re discussing? You have to plan smart and think ahead so that every big brand with a budget doesn’t feel like they can force their way into the conversation. As soon as your audience sees that the brands don’t fit within the context of your show, they immediately recognize the ads and want nothing to do with it. When they realize it’s not authentic, they are no longer paying attention to the brands or products involved. Consequently, podcasters are losing interest, credibility and belief with their audience. Then, for the brands, they’re not getting maximum value because the audience is checked out. That’s a common mistake that impacts both ends of the spectrum.
Mitchell: With the industry growing and rapidly, it can be challenging for podcaster seeing success to understand their leverage — What is the biggest educational gap you face when brokering or negotiating deals?
Gary: There’s strength in numbers. You should continue looking to grow your podcast in terms of scale and audience. While you’re authenticually growing and building that audience, it’s important to understand that the data matters. It’s even more critical to understand the data directly tied to the audiences you’re marketing to; whether that’s ages 18-24, or the data round male versus female listeners. When you know this data, what you’re essentially doing is building a brand story around your podcast that can be packaged and successfully sold to brands. It shows the value, reach and engagement of your podcast, which is ultimately what brands will ask to see. When you understand your data and control the information, that’s when you have power. Your podcast may not make sense for a spirits company, but it does make sense for an automotive company. Most importantly, you are in the power position to decide. This requires taking off your creative hat and tapping into your business mind. That way, the conversations you’re having with brands is not corporation to talent, but owner to owner. You are more educated, prepared and clear about what you want. This allows you to easily say yes or no, because you know your audience and what they engage with. You’re able to stay true and not settle for any advertiser that comes knocking at your door.
December 28, 2018 at 07:13PM
Forbes – Entrepreneurs