From 2015 to 2019 US-based National Public Radio (NPR) saw its podcasting revenue grow ten-fold. Things were tougher last year due to the pandemic, though NPR still managed a small amount of growth, but it’s now bouncing back big time.
“It looks like this fiscal year, podcasting is going to be up at least 30 percent from last year. It has rebounded, and it’s definitely where we see the most growth in the future,” says Bryan Moffet, COO at National Public Media, a subsidiary of NPR.
While network radio has been NPR’s longest-running business, podcasts now represent more than half of the company’s sponsorship and are almost twice the size of the network radio business, Moffet told participants of WAN-IFRA’s recent LATAM Media Leaders eSummit conference.
NPR podcasts reach more than 21 million people, and the most popular shows have over 5 million listeners every month. Moffet said NPR’s podcasting numbers are comparable to that of prime time television in terms of advertising reach for a brand.
Monthly, NPR has about 163 million users, and hosts seven of the top 20 podcasts in the United States. National Public Media (NPM) is essentially NPR’s sponsorship arm and handles all sponsorship and advertising.
The daily habit strategy
NPR has also sustained its leadership position in podcasting for the past 15 years. While it launched a podcasting precursor in 2000, the company’s real podcasting debut was in August 2005. The programmes were essentially derivatives from radio. In 2015, it started making specifically designed podcasts.
“The biggest thing we’ve done in the past three years is that we’ve formulated what we call our daily habit strategy,” Moffet said. “A lot of the new podcasts we’ve made over the last three-four years are shorter form daily podcasts like ‘Up First,’ which gives you two-three stories that you need to know every morning so that you can start your day in 10 minutes or less.”
Other examples include “Short Wave,” a daily short-form science show, and “The Indicator from ‘Planet Money,’ ” featuring a daily business story.
“What we found from these are if you can get podcasting into a daily habit for people, something they do to start their day – just like radio has been for decades – that is a really powerful way to keep an audience engaged in a show,” Moffet said. “And frankly, they tend to be quite profitable shows because as a daily podcast you are generating a lot of downloads every day instead of just once a week.”
NPR’s growth has not just been in podcasts. The company tracks the rise of all forms of spoken-word audio, such as audiobooks and, of course, radio.
According to research done by US-based Edison Research, 90 million A12+ people in the United States listen to podcasts each month and almost 30 percent of the time spent listening to any podcast goes to an NPR podcast.
Revenue began doubling each year
NPR began selling its first podcast ads in 2005. Only pre-rolls (promotionals played before the programme) were offered until 2012, and its podcast revenue was around $1-2 million a year.
In 2012, things changed with the introduction of mid-rolls. After that, revenue started doubling every year.
“Until today you see this is the largest piece of our business,” Moffet said.
Further innovations soon followed.
In 2015 dynamic mid-rolls were added, and in 2017 NPM entered the custom audio space. Branded podcasts were introduced earlier this year.
The biggest driver of NPR podcast’s revenue is baked-in mid-roll.
“This is because in a longer show you can get two breaks,” Moffet said. “During 30 minutes of content, we’ll put two 30-second mid-rolls in each break. So that’s four 30-second mid-rolls we can sell in each episode, which is a lot more than one pre-roll.”
They are popular with sponsors because they get to own that episode, he said.
“The way we manage our baked-in mid-rolls is, we estimate how many downloads an episode will get over four weeks after we publish,” he added. “That is the download guarantee we give to the sponsor against a CPM cost per 1000. So for a sponsor, for a month they get a 100% SOV (share of voice) and that is a really attractive thing for a sponsor.”
And that’s not all. With mid-rolls being surrounded on both sides by content, one can also get a sense of the skip rates.
“Only four to five percent of people tend to skip an ad in a podcast in a mid-roll position, so they are very well listened to, and it’s a great vehicle for our sponsors,” Moffet said.
Dynamic inventory and podcast attribution for sponsors
Back in 2005, the team used dynamic inventory for pre-rolls and post-rolls. In 2015, they started using them in the mid-rolls too. Moffet said this has been a huge driver of growth because it gives sponsors the ability to target specific audience groups based on criteria such as geography, age, gender or household income.
“We have proven through our attribution tools that those campaigns actually perform better, and they have higher conversion rates. We see an average 1.7 percent conversion rate for content targeting, but when you add on a gender and age target on top of that content targeting it increases to 2 percent. The higher conversions we can drive, the more renewals we’ll get,” he said.
Podcast attribution for sponsors is a relatively new feature introduced by the team about a year and a half ago.
“We basically put a pixel into the podcast ad, so that when it’s downloaded we can get a sense of how many people heard the ad and then there’s a pixel on the advertiser’s website and they can get a sense of how many of those people who heard the ad actually ended up at their website,” Moffet explained.
This brings more accountability to podcast advertising because it allows advertisers to measure the results like they can measure banners on a website, he said.
NPM Creative – the custom audio business
About three years ago, the team started thinking about how they could preserve the intimate feel of podcasting during the ads, instead of simply inserting radio ads from the sponsors into podcasts. They decided to create a studio in-house that would create ads for sponsors.
“These are not branded podcasts,” Moffet noted. “We are working with the advertiser to bring their voice into the spot so that it can be a little more authentic. We take a very storytelling approach here, we want to try to help them tell a story to our audience versus just trying to sell a product to the audience.”
The array of products offered by NPM Creative today includes Brand Soundscapes, which are fully produced short unbranded audio stories; Spotlight Mid Rolls, which are custom mid-rolls featuring a voice from the brand; Product Inspiration Mid Rolls that tell stories behind a product in 60 seconds; and the new Custom Podcasts, which offer long-form storytelling and conversations spanning over multiple episodes.