Nieman Foundation at Harvard
Welcome to Hot Pod, a newsletter about podcasts. This is issue 236, dated November 16, 2019.
Scaling the host-read ad. At times, the discourse around the future of podcast advertising can feel like it’s presenting a coin flip between two maximal outcomes.
On one side, you have a view towards the preservation of the historical status quo, committing to the black box of artisanal host-read ads — ideologically pure, perhaps, but also seemingly limited in the value it can generate for podcasting’s creative class. And on the other side, you have a vision of a fully programmatic future, one that ostensibly opens podcasting up to more digital media dollars, but nonetheless also raises the spectre of a dystopia filled with obnoxious ads that scream “BRANDS BRANDS BRANDS” into your eardrums every few minutes.
Of course, binaries are rarely true, and there’s always the possibility of a third way. (And fourth, and fifth.) But the thing about alternatives is that they need to be articulated. More importantly, they need to be advocated for.
Which is why I’m paying some attention to something called Gumball, a new podcast advertising marketplace that was launched last week by Headgum, the Los Angeles-based comedy podcast network. In a nutshell, Gumball is an attempt to articulate (and structurally advocate for) a future where the fundamental value of host-read ads, podcasting’s long-time edge in advertising, isn’t only preserved and protected, but modernized and emboldened.
The fundamental intent behind Gumball, the Headgum team tells me, is to build something that improves the process of buying and selling host-read ads, the current version of which they consider “archaic and outdated.” The typical sales process, they argue, puts too much power in the hands of the mediating sales agency. The creator’s side often doesn’t have the capacity to handle the sales process themselves, while the agency’s side often has dominant control over the flow of information. As such, the agency side often overemphasizes the sales focus on its biggest shows. That isn’t just to the detriment of other shows within a sales portfolio — it’s also an ineffective and inefficient way to engage in the sales process to begin with, they argue.
With Gumball — structured as a self-serve advertising marketplace platform for podcasters and advertisers — the core premise is to deliver a sales environment that increases efficiency and transparency by removing the mediator from the process.
“The idea is to try and take out as much of the bias possible and to give everyone a better shot of displaying and pitching themselves,” said Marty Michael, one of Headgum’s co-founders, when we spoke over the phone last week. “We’re building something to help connect podcasters and advertisers in an ecosystem that allowed them to interact with each other without the need for a sales team.”
The key idea is that podcasters, particularly those operating independently, wouldn’t have to pitch themselves to a network or a sales rep in order to potentially get in front of advertisers, because they’d be able to present themselves to advertisers directly on the Gumball platform. (They would, however, still have to write decent copy that would catch the eye of potential advertisers browsing the platform for suitable inventory — which is itself a filter.) I’m told that audience targeting is not part of the platform’s design, which means that buyers would have to handpick their audiences at the show level, basing their decision on broad demographic assumptions and content categories.
Headgum has been testing the platform internally over the past year, using it to facilitate ad sales throughout its entire portfolio, and the press release associated with the launch announcement listed out a number of its claimed findings. Among them: Network revenue growth by about 55 percent year-over-year, the delivery of over 4,000 host-read ads for over 300 brands, a projection to double platform revenue by the end of next year. The release also lists the brands working with the platform, which include Squarespace, Warby Parker, ZipRecruiter, Everlane, CBS, and Netflix.
When we spoke last week, Michael disclosed a few other data points, including the claim that the platform helped reduce the need for make-goods — ad units given away to advertisers for free to accommodate for mistakes and campaign underperformance — by about 70 percent. He also said that the platform shortened the time that goes into managing the sales process by about 80 percent. He said that’s allowed the network to bring more podcasts into the fold than it would have been able to in the past, because the self-serve nature of the platform means that they’re able to support new shows without needing to hire additional sales and support staff.
More importantly, though, he claimed that the platform’s facilitation of a more transparent sales process resulted in more engagement by podcasters, because they got to be directly involved in the buying and selling. Plus, they get to see the revenue flow in real time.
Because Gumball is a marketplace platform, the business model is predicated on some sort of revenue share. I’m told that the Gumball team is still working out the exact rate structure, which will vary according to show size. Also worth noting: podcasters interested in signing up for the marketplace would have to go some sort of vetting process. When I asked if there were any baseline numbers for audience size to qualify for the platform, they were soft on providing a hard number, but seemed responsive when I raised theoretical sizes around the 5,000 downloads per episode range.
At this point, I’d be remiss if I didn’t bring up the risk associated with platforms in general. Headgum’s pitch with Gumball is chiefly structured around taking power away from sales-agency mediators — but the end result of a successful Gumball push would centralize the power in its platform. Which could end up being a coin flip of its own, depending on the array of choices the Gumball leadership might make about priorities and values as they navigate the future of podcast advertising. (Hypothetically speaking, there’s nothing stopping the company from adopting targeting or non-host-read-ads into the platform after a while — perhaps when facing a potential industry environment that’s, say, leaning heavy on programmatic radio-style ads, or something like that.)
But that’s the future, and this is the present, and in this present, the Headgum/Gumball team is positioning themselves as the advocates for the host-read ad. “Everyone’s talking about trying to force a round peg into a square hole — to take what exists in digital and make it into something that’s viable in podcasting,” said Michael. “It makes me want to, like, scream, because we’re not either of those holes. We’re a triangle hole, you know? Like, we get to pave our own path. Podcasting is its own thing. It doesn’t have to be something else.”
Awkward metaphorizing, but the point is taken.
Sidenote: The state of the podcast network. One of the secondary storylines that interests me about this business of Headgum, a somewhat traditionally-structured podcast network, building out a technology play, in the form of Gumball, is the question it raises about the viability of podcast networks in the modern age. Can you be a podcast network in 2019 without having to diversify your business model in non-network directions, like building out a technology arm?
Michael seems to think so. “It’s probably a little more difficult to get into the network side of the business today, because there’s a lot more people in this space than there was four years ago, but I think there’s still room for networks,” he said. “There will always be shows who need production and distribution support, and there’s always going to be more artists and talent and creators coming into the podcast who want the support of a network and a staff.”
Double feature. We’re not doing our year-in-review issue for a few more weeks, but I’ll go ahead with a pre-emptive and say that there’s probably no image more representative of the past year in podcasting than this diptych:
Podcasting gracing the covers of the two major Hollywood trades (the two that still do print, anyway), spaced a few months apart, collectively embodying many of the year’s big industry themes: Spotify’s busy attempt to push their way to the front of the line, the increasing interest in the category by the broader entertainment ecosystem, and a seeming West Coast-swing in podcast business activity. What a peculiar year it’s been.
Anyway, The Hollywood Reporter’s cover story is the news peg here. Published Wednesday and written by Natalie Jarvey, it does a pretty good job knitting together the disparate piecemeal developments we’ve seen trickling out of Spotify since their big coming-out party with the acquisition bonanza back in February: the Obamas signing, the exclusives push, the celebrity courting, and so on. The piece also has a string of bits of incremental new information, including the launch lineup for the months to come, which I’ll leave you to browse for yourself.
But the thing I’d like to highlight here is how Spotify, via this cover story, seems to be publicly framing its strategic pillars around the twin approaches of (a) building out a robust portfolio of exclusives and (b) developing a deep pipeline of projects headlined by head-turning talent. Setting aside the fact that both pillars are notorious causes of anxiety for large swathes of the broader podcast ecosystem — in particular, for independents and the open publishing-inclined — I’m struck by how those two approaches are chiefly oriented around the top-of-the-funnel, i.e. they are principally mechanisms to get people to try out Spotify for podcast consumption. That’s only half the battle, of course, as you’d need to give adequate reasons for those people to stay — especially when the consumer always has the option to switch away, to a third-party podcast app or back to Apple Podcasts.
Which is why I’d probably place a little more weight on a few other aspects of Spotify’s podcasting gambit when thinking through the likelihood of the company actually pulling off this big push into podcast/talk distribution. Those would include: how it handles bringing the wider universe of on-demand audio publishers onto the platform and keeping them there, partly through the provision of better analytics (and, probably, future monetization features); its various experiments around the user experience and curation products like Your Daily Podcasts, which gives users more of a reason to stay; and a bigger push towards non-American markets, which Spotify seems uniquely able to do in a way that’s coherent to its core businesses. Those are decidedly less sexy elements than exclusive content and Hollywood talent, but as an integrated bundle of executive focus, they feel substantially more compelling as closers.
Now, no discussion of Spotify would be complete without the requisite mention of Apple, the podcast distributor against which the Swedish streaming platform has to define itself by default. A reminder that the big rumor with Cupertino is a suspicion that they’re thinking about producing ~Original Podcast Content~ of their own, a thread that dates back to a Bloomberg report from July. But the thing about that rumor is that, even if it’s true, there remains a long list of execution-level questions to be answered — and the list grows ever longer with each new detail laid out by Spotify in its push for podcasting prowess. Financing original podcasts is one thing; financing certain kinds of podcasts at the spending level that Spotify is exhibiting is another.
Two other Apple-related stories of note:
This week in public media:
Elsewhere: The Third Coast Festival announced a new executive director last week: Shirley Alfaro.
The algorithm of you. Not long after the newsletter went out last Tuesday, Google announced the rollout of something called “Your News Update,” a new feature attached to the Google Assistant that’s meant to give users a more personalized experience when they ask for news through its voice assistant.
The feature is premised on serving users playlists of short-form audio news missives from a variety of sources, algorithmically curated around a cluster of topics of possible-to-probable interest to the specific user. As you’d expect, such personalization would be the product of machine learning oriented around the user, which means that it should get better the more it’s being used. (In theory. More on that later.)
Here’s how the announcement post describes the intended experience:
When you say, “Hey Google, play me the news” on any Assistant-enabled phone or smart speaker, Your News Update will begin with a mix of short news stories chosen in that moment based on your interests, location, user history and preferences, as well as the top news stories out there.
If you’re a Steelers fan who follows the stock market and lives in Chicago, for example, you might hear a story about the latest “L” construction, an analysis of last Thursday’s Steelers game and a market update, in addition to the latest national headlines. Keep listening and the experience will extend into longer-form content that dives deeper on your interests. In between stories, the Google Assistant serves as your smart news host that introduces which publishers and updates are next.
All this is meant to improve upon the standard audio news experience you would currently get on smart speakers — whether it’s an Amazon Echo or Apple HomePod or Sonos One or whatever — in which the call-to-action for a news update triggers a steady trickle of news briefings crafted by a range of news organizations you, as the user, typically had to curate beforehand. (That is, if you, the user, didn’t ask for a straightforward digital radio stream.)
When I checked in with the team behind the feature last week, part of the narrative that was given to me focused on how the existing smart speaker news briefing experience tended to be undermined by a few recurring frictions. Chief among them: how, when moving between news providers in the flow of the current experience, users were often served versions of the same story from different outlets. By letting Google assume more control over the curation frontier, the belief goes, that redundancy would be less common.
The initial rollout of Your News Update uses content from a predetermined list of media organizations, with which Google has already struck up working relationships. Liz Gannes, the company’s product manager for audio news, described this initial group as “known news organizations,” most of which are already broadcasters in some form or another — the assumption being that experienced broadcasters would likely be capable of creating quality audio content for the feature that would set a decent starting standard.
You can find a partial list of participating publishers in the announcement post, which includes a mix of national U.S. news brands (The Washington Post, CNN, Fox News), non-U.S. publishers (the Evening Standard), subject-specific pubs (The Hollywood Reporter, Billboard), local media orgs (WNYC, KUOW), and broadly expected miscellanea (PRX, the NBA). The full roster, I’m told, is about 50 publishers.
As mentioned, Google is working directly with these publishers to shape the supply of audio experiences that will populate the feature. There are some content parameters; among them: each audio story has to be under 10 minutes, and each story should be able to stand alone. That’s so each audio story can be treated as a unit to be ranked within the framework of underlying technology, which, true to Google’s form, is constructed to design the information universe around specific topics and terms.
The content is licensed non-exclusively, which means that the publisher can use the content elsewhere. This stance is further supported by the delivery mechanism, which involves distribution through open RSS feeds. In case you’re wondering, Google is indeed paying publishers for their participation in the program. There are plans to expand the program internationally at some point next year.
At one point during our conversation, I asked about the big picture. What’s the broader concept driving this feature? Much as in the announcement post, Gannes started by phrasing the narrative as the continuation of a certain interpretation of the early web:
When newspapers were first experimenting with the web about 20 years ago, the sites were fairly basic in nature. There were no ways to search them, there was no linking between them, and articles were typically posted a day after printed. There wasn’t a kind of rich understanding of what was happening within the stories. It’s almost like just posting PDFs online.
Our contention was that, if we could break open the MP3 and understand the audio story, we could create a more intelligent, timely, and personalized audio experience for the user.
The playlist is really just the first expression [of this technology]. It’s not like the outcome of the text web was only news aggregators. That was just one of the things that was enabled by a better text understanding. The playlist is just a starting place for better audio understanding.
Which is to say Your News Update, as a feature, seems like something of a stepping stone. Gannes noted that there’s some consideration for the underlying technology to eventually power features and products outside the Google Assistant environment — perhaps even in the Google Podcasts app.
On a hunch, I followed up by asking if there was any roadmap to opening up the supply pipeline to include non-professional media organizations. Is it possible that we’d eventually see the Your News Update feature expand the pipeline to include, say, “audio bloggers” of some sort?
Gannes replied:
We do have some hope to set the feature up to expand benefits of an open platform, where it’s able to democratize the opportunity for voices that didn’t have a space before. But we want to do that in a careful way. We’re trying to first establish the platform with these known voices from the beginning, because we recognize that you have to build from a place of quality if you want someone to tune in.
But we do see a lot of opportunities, and hope to grow it to be more open.
Stepping stone, indeed.
Two more things on my end to wrap up this thread:
Have now recorded three episodes of the upcoming spinoff of @RememberThisPod, featuring eight super talented writers/reporters telling stories on the theme of Hollywood's intersection with the beauty industry. Debuts January 21!
— Karina Longworth (@KarinaLongworth) November 20, 2019
Been so busy making season two of The Dream I forgot to show you the new show art 😍 pic.twitter.com/EmNIZKQfTe
— Jane Marie (@SeeJaneMarie) November 23, 2019
