Monetizing Podcasts and Videoblogs
Advertisers have been shifting advertising expenditures from traditional media such as magazines, radio, and TV to the internet in increasing numbers, and podcasting has accelerated that trend. Podcasting can make up in targeting what it lacks in volume. Narrowcasting to groups of thousands of like-minded audience members, with their tight demographic clustering, can provide a captive audience of great value to advertisers. In traditional media, it usually takes millions of viewers or hundreds of thousands of listeners to keep a show alive. But podcasts with only ten thousand listeners have been able to generate meaningful advertising and sponsorship revenues.
As in any immature market, there was a long period of time when internet-based CPMs (cost per mil, or thousands, of ad impressions) were wildly variable. Click-throughs, banner ads, and interactive Flash ads were all new and hard to price under existing CPM models. This created confusion for advertisers and slowed their spending. Fortunately, companies are rising to the challenge of standardizing podcast ad rates, or at least the metrics in their rate cards.
Because many podcast and video blog ads are essentially the same as radio and TV commercials, they are inherently more familiar to ad buyers. This familiarity breeds comfort and reduces the friction for ad buys.
Apple: "Podcasts Must be Free"
If you still don’t believe that advertising is the way to monetize your podcasting and videoblogging, ask Apple what they think. Apple’s strategy on podcasts has all but sealed podcasts’ fate as an advertising-supported medium. In 2005, Apple famously co-opted podcasts (which were already conveniently named) and added a huge, glossy podcast storefront into iTunes. It was a perfect vehicle for podcasters, and heralded the entrance of dozens of mainstream media players into the podcasting fray. But with that came a far-reaching declaration: All podcasts are free.
This shift was a double-edged sword for podcasts, at least for those seeking the incredible publicity of being listed on the digital shelf in iTunes. On the one hand, it gave them incredible visibility and distribution. On the other hand, Apple showed it wasn’t about to extend the reach of its global billing infrastructure or digital rights technology to let indie music and long-tail content join the party.
Apple was quite happy to cull the high-production-value cream of the podcast crop, add to it a smattering (now not so small) of mainstream free content, and organize it to help sell more of their industry-dominating digital music players. Since Apple already claimed that they barely broke even on the music store, free podcast content must have seemed like a bargain. And there’s no doubt that videoblog content came in handy when Apple had only a dozen or so movies and shows to debut with its first video iPod.
It’s All About the Inventory
To say that everything gets co-opted is perhaps a bit misleading. Surely, audio- and videoblogs are just another liberating form of content delivery, a new idiosyncratic channel to be quickly assimilated, aggregated, and added to the mainstream, if possible. But in the process, those technologies change the mainstream by scattering consumer attention across myriad new and different channels.
As the internet advertising story continues to unfold, people continue to look for the next Google, the next AdSense. Innovators work to counter fragmented consumer attention with increasingly powerful, automated advertising technologies.
Every new channel of content is new advertising inventory—a new space to place a message, whether it be interstitial, click-through, bumper, or telescoping ad in which you drill down.
The success of this new breed of podcast and videoblog inventory is limited only by the creativity with which the message can be matched to the medium, and by the automation—and thus the scale—to which the matching can be made.
Conclusion
A recent Washington Post article quoted David Sifry, CEO of Technorati: "Several hundred bloggers earn enough to make it their full-time job . . . about ten thousand bloggers are earning money as a secondary source of income, and about a million others, such as authors and speakers, use their blogs as marketing tools to generate income indirectly."
Well, there you have it. A few hundred bloggers (some podcasters and videobloggers no doubt included) have quit their day jobs. A few thousand are pulling in extra cash. But the other million are still using their blog as just one part of their overall strategy.
Podcasts and videoblogs are fundamentally blogs, and obey the same physics, including monetization strategies. In the end they are just another way to deliver content—but they are uniquely suited for "narrowcasting" messages. And in this narrowcast, podcasts and videoblogs can deliver ad messages deeper into the audience. But any business built around podcasts and videoblogs has to start with the fundamentals: Compelling content that can be exchanged with an audience for their attention.