First, a quick definition of dynamic insertion. This simply means that the podcast audio and the audio for the ad are put together on the fly rather than the ad being “hard” recorded into the original audio file. This allows the ad to change over time for the same episode. Now back to Todd’s opinion.

He states:

The second you drop in some pre-produced, auto inserted advertisment, this immediately disconnects the podcaster from the audience, and the advertiser message will not have the impact it should.

OK. I 100% agree with that statement. But why does that invalidate the dynamic ad insertion technology or methodology. Just give a listen to Paul Colligan’s latest Podcast Tools podcasts. At the time of writing this post he’s including seamless, host-spoken ads for Go To Webinar. And guess what…they were dynamically inserted!

Paul created the ad himself, in his own words and then inserted at the point of download. He’s using the Gigavox Audio Lite service (not yet available to the public) for his dynamic insertion. It’s similar to the system that has run the IT Conversations Network for a long time. This system allows Paul to change the ad at any time meaning:

1. He can have a different sponsor for the same episode at any point in the future. He’s already planned a different ad for March.
2. He’s not stuck with the sponsor for the life of the audio file.
3. He can sell his episode archives over an over again as ad inventory (e.g. he can have a different sponsor each month and put them in every one of his episodes)

Imagine if you decide you no longer want to endorse a sponsor who put an ad in ten of your episodes last year. Do you want to have to go back and take that audio out of every one of the files? If you use dynamic insertion an ad can be turned off at any time. Granted, this is subject to the agreement with the advertiser. The dynamic nature and finite term of the ad need to be agreed upon with the advertiser up front.

Dynamic insertion is a pretty handy way to do your ads. Is it the right solution every time? No. Is it what I strongly suggest in most cases? Yes.

Dynamic insertion does not mean pre-fabbed, “radio-guy” voiced ads that break the flow of your show. It means flexibility in your ad offerings over time. Dynamic insertion is far from DOA. This is why companies such as RadioTail invested in it early on.

On another note, Todd also state in the same post that:

We have a very good data that proves ad penetration is around 90% of the total listening audience we don’t get that many conversions but 90% of the ads are getting to the intended audience.

I hope that’s true, but I’m skeptical. I’d like to see how they arrived at that 90% figure. Todd is usually one of the first to demand proof for numbers like this that get touted about podcasting.

Todd is on the forefront of podcasting and I have agreed with many things he says, but he has me puzzled with these recent statements.

…do we really need to rely on Google to figure this out or can we take it in house and get creative?

I would hope that a podcaster would look beyond Google "AudSense" to monetize his podcast. I would also hope that a company would look beyond  Google for ways to market themselves in the new/social media space. Granted, Google is in a place to provide a trusted, quick and scalable solution…but it’s only one crayon in the box.

Adam points to Joseph Jaffe’s Across The Sound as an example of creativity. Adam uses four key phrases to describe Jaffe’s sponsorships:

1. More relevant
2. Less obtrusive
3. Transparent
4. Fun

While Google can provide #1 well enough, you’d have a hard time fulfilling the other three by inserting audio AdSense into your podcast.

They call this new media for a reason. We need new models. Let’s get creative.

How is Google going to measure this thing?

The beauty of AdSense is it is pay-per-click. The whole thing is based on performance and revenue share.

But how do you measure performance for an audio ad inserted in a podcast?

Is it pay-per-download? This won’t work since a number of downloads are never listened to. The ideal situation is to measure exactly how many people listened to the ad, not just some portion of the podcast. How will Google measure this? This requires some sort of Digital Rights Management (DRM) wrapper on the audio. This presents two problems:

1. MP3 files don’t support this, but MP3 is the universal format for audio podcasts
2. Podcast listeners have come to podcasting seeking choice and convenience in their listening. DRM defeats that.

Measurement will be the #1 question for advertisers (since it determines their bill) and a potential headache for Google. Google has enough problems with click fraud.

Further, when a prospect clicks on an AdSense ad an action has been taken. Also, you can easily measure the traffic to a URL from the ad.

With audio, the ad may be heard but how do you know if an action is taken. Was the listener’s attention even on the ad, or did it get zoned out like we tend to do with radio and TV commercials?

There are some things you can do to measure response from audio or video just like you would on radio or TV (e.g. URL, phone #, etc.). But if Google measures pay-per-consumption, advertisers will be charged whether the ad incites a response or not.

Or…will this service only be used in streaming applications fromGoogleTube and other such services? In that case, measurement becomes easier. The podcasting industry has discovered that as much as half of the podcasting audience is listening to podcasts on their computers. It’s feasible to dynamically serve ads to these listeners and measure consumption.

There is a definite value difference with audio AdSense that will need to be considered. The good news is that AdSense is based on what advertisers are willing to pay. A true market value settles in.

Despite these concerns, I’m hoping to jump in on some audio AdSense action as soon as I can and hopefully get cheap placement early on while other people are still leery. I’m willing to test it out.

This probably means:

1. Google will allow you to insert audio ads into your podcast.
2. Ads will be based on an audio-to-text contextual analysis of the podcast content. That is to say, they convert your audio to text, analyze it to determine the subject matter and then insert relevant ads
3. Google will need to push dynamically generated versions of the audio file to your web server or only use it on content offered from their own servers.

I’m left wondering/thinking several things:

• If Google is dynamically inserting relevant ads, how often is the audio file regenerated? Once a day? Every X requests?
• Will Google also base the type of ads on the text content of the page or feed that the podcast is requested from?
• Or will this only be used initially on audio/video served up from GoogleTube and other such Google services?
• If the real power of this medium is in the relationship the podcaster has built with a targeted audience and his ability to create/curate the content he shares, how will the audience respond to the less personal approach of ads chosen by an algorithm?
• When it comes to “ads as content”, there’s a big difference between an “old time radio” sponsorship where the host suggests or talks about a product and the insertion of an ad chosen by a Google.
• The people who make the most money with text AdSense ads on their site are those that integrate the ads seamlessly into the content (i.e. ad placement, ad colors, etc.). You can’t do this nearly as well with audio. You can’t automatically match the ad to the voice and audio production of the podcast. How will they deal with the consistency of listening volume coming into and out of the ads?

OK. So I raised more questions than I can answer on the matter (since I have no answers). But it’s interesting food for thought. It will also be very intriguing to see how things pan out by the end of Q4.

One thing is for sure…the scalable and automatic nature of Google’s contextual advertising is irresistible to advertisers and content creators looking to make money.

UPDATE: Here is another post I did about the issue of measuring AdSense for audio.

Pete Lerma of Clickz Experts shares the method he used for creating a partnership between Travelocity and Rick Steves’ travel podcast. Even though there are several ad networks out there for podcasters, he ended up going with a podcast that he researched on his own. 

Here’s the process he outlines in his article:

1. Search iTunes to find the top ranked shows in your niche
2. Listen to the shows to ensure the message and quality are something you want to associate your brand with
3. Contact and negotiate with the podcaster

Because of podcasting’s ease and low cost of entry, there will be a lot of bad content mixed in with the good. To help you cut to the good stuff, you can start by looking at the iTunes’ list of top ranked podcasts in your category. These are the ones that are being listened to the most based on subscriptions in iTunes. You can also sort a list of podcasts by popularity. This should help you find the cream.

Keep in mind, however, that this is just a good place to start. There are plenty of great shows that don’t get ranked.

Podcasts are great for reaching niche groups. The audience may not be as numerous as American Idol viewers, but they will be focused prospects.

Pete also offers insights for when you contact a podcaster:

Many of the
podcasters we contacted had never been approached about a sponsorship
nor had they given any thought as to how it might work.

Podcasters won’t be used to all the industry jargon. Some will be flat out opposed to running ads (this is the "people’s" medium after all). Others will be excited about making money with their podcast.

Podcasters really know their audiences and what they might or might not be receptive to. Don’t try to push something if the podcaster expresses concern about how the audience might respond.

Because podcasting is a direct communication from creator to consumer, and thanks to the interactive nature of podcasting, podcasters have a good feel for their audience. Listen to what they have to say and use this to your advantage.

Podtrac

Here’s a summary of the information provided:

• 56% of podcast viewers and listeners are consuming the content on their computer, the rest use portable devices
• 88% of podcast consumers listen to or view the entire program (very encouraging for both podcasters and advertisers)
• Podcast listeners tend to have high income and education
• 76% of podcast listeners have shopped online in the last 30 days
• 41% of adults in the U.S. that are online were aware of term “podcasting” at the end of Q1 2006 (compared to 32% at the end of Q4 2005)

UPDATE: Paul Colligan makes a valid point when he reminds us to “remember the source of these numbers.”

He points out:

These are the big fans. These are the people willing to fill out surveys for you.

…it is, in short, a survey of active Podcast consumers, not the passive ones.

He talks about how too many podcasters are selling themselves short and accepting ad rates that are much too low. I think he’s right. The problem is that the podosphere is too stuck on the CPM model that the advertisers are used to. This is a new media that deserves new ad models.

A quote from Mike:

If you are having a CPM debate with someone you are having the wrong discussion. The discussion you should be having is about unique opportunity and new market penetration.

As podcasters we have a lot to offer:

• Targeted niche audiences
• An interactive audience
• A means to reach the multi-tasking crowd

Traditional media knows that things are shifting. They are losing their listeners/readers/watchers. We are gaining them. Don’t sell yourself short…just SELL YOURSELF. Believe in what you have to offer and hold out until you get what you deserve. At this point, no sale is better than a sale that falls short and hurts you in the long.

In 2006:

• 10 million people will listen to at least one podcast
• 3 million people will have downloaded at least one podcast on a weekly basis
• 80 million dollars will be spent on advertising in podcasts

By 2010:

• 50 million people will listen to at least one podcast
• 25 million people will have downloaded at least one podcast on a weekly basis
• 300 million dollars will be spent on advertising in podcasts

Here’s my reaction to these numbers.

Audience Growth

These figures seem reasonable. Due to the huge sale of iPods (100+ a minute according to 2005 Q4 numbers), inclusion in iTunes and a precedent set by blogs–not to mention people’s disillusionment with the current state of media–the number of podcast listener’s will continue to grow rapidly.

In a report from November 2005, Bridge Ratings stated that 4.8 million people had listened to a podcast in 2005 and this number would reach a conservative 45 million by 2010. This lines up with eMarketer’s 10 million number for 2006. I wouldn’t be surprised if Bridge Ratings is one of the sources cited in the eMarketer report.

Podcast Advertising Dollars

80 million?!? I must admit this surprises me. I have previously mentioned that 2006 would see considerable adoption of podcasting as a valid advertising medium, however, 80 million seems a bit ambitious.

Maybe I’m underestimating big media’s ability to adapt quickly and spend that much money. There’s still a lack of information needed to meet their comfort level. They want good demographic information and accurate market measurement. For now, there’s no way to measure how many people actually listen to a podcast, leaving listenership numbers unclear. That is a hurdle we need to overcome as a new media.

eMarketer Editorial Director, Mike Chapman, attributes the advertising dollar influx to the following:

• The attractiveness of the demographic
• The steep growth in the number of listeners
• The appearance of several companies dedicated to podcast advertising placement and measurement
• The fact that several major brands have already made the plunge and invested money

I can’t speak to the exact sources for their numbers as I’ve not read the full report.

Will this trend hit a whopping 80 million in ad spending? I guess we’ll see. I’m not one to prematurely ruin the party, but, despite my wholehearted hopes for podcasting, I cannot as of yet embrace this 80 million dollar figure. I’d like to know more about how it was derived.

Despite my skepticism and surprise, I remain open-minded (and hopeful). If it’s true, I plan to claim my slice of the pie.

There’s one point I will solidly and respectfully disagree with Mr. Chapman on. He states:

“The appeal of moving images to both consumers and advertisers and the continued evolution of devices like the video iPod mean that videocasts will become the predominant format within the next five years.”

When it comes to consumer preference regarding podcasts, Video will never surpass audio for one simple reason: I don’t see myself driving down the road, jogging or doing dishes while watching my video iPod. The multitasking nature of audio podcasts cannot be overcome by “the appeal of moving images”. I could be wrong, but that’s the way I see it right now.