Why are podcast conversions declining and how can we combat this?
Podcast ad frequency has doubled in the past year, resulting in many campaigns seeing a decline in conversions (Podsights 22). Is the answer changing up your placements or ad types? What metrics mean most when measuring success? Find out more below and how you can ensure you're getting the best bang for your buck in podcast advertising, plus how to decode podcast ad measurement, enabling brands and agencies to make better strategic decisions.
The attention economy
Frequency is an important factor to monitor across all channels, but it has a unique effect in audio. While our thumbs scroll, our fingers type and our poor eyes get tired from staring at screens all day and night, ads follow you from Instagram to gmail to websites. This means that putting headphones on and listening to audio can feel like a welcome solace.
It takes our brain at least one-quarter of a second to process visual recognition. But sound? You can recognize a sound in 0.05 seconds. We're wired to tune out non-essential sound, so the world doesn't feel like a sensory overload. Research shows that brand stories told just audibly inspire an average 50% more positive emotional peaks than brand stories told just visually. This means podcast memories are likely to sustain over time, given their strong emotional component. This also applies to ads. However, even if an ad is brilliantly done and perfectly placed, if you hear it over and over, that's going to get real old real quick.
Is frequency the best metric to look at when examining the performance of podcast ads? It’s a common struggle for media buyers to identify which tools, platforms and metrics are the most relevant to making informed, data-driven decisions.
Frequency is an important metric to monitor, especially when considering other metrics such as reach, conversions, CAC (the cost of acquiring a customer) and brand lift.
The introduction of brand lift studies allows us to gain important insight into top of funnel metrics such as awareness versus lower funnel metrics such as brand favorability and taking action.
Neilson has revealed that campaigns with the strongest brand lift skew heavily towards audio. The top 10% of brand lift campaigns tend to have nearly three-quarters of their impressions tied to audio.
Ever binged a podcast and heard the same ad multiple times? You’re not alone.
In Q1 2022, the average podcast campaign ad frequency measured by Podsights was 6.32, a twofold increase from Q1 2021 (2.97)
This report is from the US, which tends to lead the market and indicate future trends for Australia.
Key insights from Podsight’s Podcast Ad Benchmark Report Q2 2022:
Podsights reports that site visits based on podcast ads (1.1%) hit a record low in Q1 2022. They attribute the falling conversion rates to the higher ad frequency. Conversion rate is calculated as the percentage of homes exposed that visited the advertiser’s website.
In Q1 2021, the average conversion rate was 1.73%. A year later, in Q1 2022, the 1.1% conversion rate represents a -36% decrease.
Podsights reports the proportion of exposed consumers who made a purchase is down -18% from the prior year.
It’s easy to see that high frequency is having a negative effect on the effectiveness of podcast ads. How can this be fixed?
Tips for great ads
“Podcast listeners have a strong passion for the podcast they listen to as well as the host themselves and we have research that supports the point: ad attention peaks for podcasts due to the strong passion and trust the audience places in the host.” - Adrian Bingham, Director of Sales, Spotify
Amongst the growing variety within podcast ads, there are two highly effective ways to advertise - host read ads that are baked into the show, or pre-produced (whether host read or voiced-over) ads that are dynamically inserted.
Both ad types can capitalise on the intimacy built between the host and listener if they are host-read. This leads to organic delivery and high engagement. Baked-in ads have the advantage of longevity and mass reach as they will be heard wherever in the world the podcast is listened to. Dynamic insertion has the advantage of buying efficiency, targeting capabilities and contextual relevance. Our take? It depends on the product, campaign and timing. Sometimes both are a great idea. Both can deliver fantastic business results.
Reach for the stars
One solution to combat growing frequency is increasing reach. A few years ago it was easy for marketers to dismiss podcasting as the format was still in growth and lacked the scale of other options.
However, since the pre-pandemic days of 2018 the percentage of Australians who listen to audio online every month has grown by nearly 50% to 78%
The Infinite Dial AU 22). Given this surge, it would not be difficult for media buyers to tweak their buy and increase reach, reduce frequency and get that healthy conversion % back up.
Think outside the genre
Another possible solution to this issue is to diversify the types of podcasts that you advertise on. Whilst it may seem like a no-brainer to advertise a counseling service on a mental health podcast, for example, it may be worth exploring other lifestyle options such as Single Minded (a podcast that tackles dating and mindset) or the Mind Muscle Project (a fitness and lifestyle podcast). It may also be worth trying out the big hitters with mass appeal who top the Australian podcast charts such as The Hamish and Andy, The Uninspired Unemployed and Shameless.
Other reasons for a conversion drop
Of course, it may not be frequency that is causing a dip in conversions. It may be worth your time to research other factors that may play into the change such as competitor spend changes or specials, seasonality and changing consumer behavior in your target set. If you take a holistic approach to your ROI, your bottom line will thank you. Get in touch with us anytime to explore this further.