Pandora Plots the Future of Podcast Advertising

There was perhaps no better time than this last year to get into podcasts -- as a listener, as a creator, as an advertiser. Podcast listening exploded in 2020, going from 100 million adults who listen to at least one podcast a month to 116 million. And an astonishing 80 million are weekly podcast listeners.

"We saw a lot of home listening," says Pandora Vice President of Ad Innovation and Strategy Claire Fanning. While fewer people were commuting, more people were looking to safely create their own small moments of connection with someone outside their household, to take a bit of a vacation from the outside world by diving into a podcast.

And some 24 percent of those people were listening through Pandora and its suite of podcast platforms.

Yes, "suite." Pandora's parent company SiriusXM acquired massive podcast network Stitcher in 2020, supercharging their podcast initiative, which also includes podcasts on SiriusXM. Now, Pandora is looking to chart a path to monetization.

"We have those heavy-hitters like Freakonomics and My Favorite Murder, but what about the thousands of other podcasts that have found engaged, if slightly smaller, audiences?" Fanning says. "We want those creators to be successful." These podcasts often have plenty of long-tail listening, which Pandora can now monetize.

There are a number of reasons why the podcast world has been growing exponentially over the last several years. "You cannot multi-task while listening to a podcast," Fanning says. "With a podcast, you're either listening to it or you're not -- you may be folding the laundry, but you are listening." This lean-in attitude leads to parasocial relationships with hosts, who are coming directly into your ears with smooth voices and interesting topics, speaking, it may seem, directly to you.

That makes for incredible messaging recall: Podcast listeners index 4.4 times higher on recall than other media, and 86 percent of Stitcher listeners say they've taken an action as a result of hearing an ad.

With so many podcasts, and so many episodes on literally any topic you can think of, the landscape can be a bit overwhelming for media planners, who have to take into consideration categories and no-go topics and all sorts of other factors. "You see these massive agency spreadsheets trying to keep track -- the complexities are just not sustainable," Fanning says. So, Pandora is looking to make the ad buying process as easy and seamless as possible, by doing all this work themselves.

Fanning's other mandate is to ensure that the ad portion of the business never detracts from the listener experience. "We have a saying at Pandora that what's good for the listener is good for the advertiser," she says.

They're setting to this mandate with a will -- and with some serious science. Pandora has commissioned and is about to release a number of state-of-the-industry research studies, in addition to following where "sonic science" leads them. Sonic science is key to the Pandora stable of ad announcers, which are chosen based on optimal vocal characteristics.

Pandora's podcast ad offerings go far beyond announcer reads, though: Host reads are common as well, and Fanning says because Stitcher has such excellent relationships with them, brands have better opportunities to work with hosts, who are often much more game than you might expect.

There's room for more in-depth integration and sponsorship, too. Fanning's team can create whole segments that do not show up as "ads," per se. For brands that aren't sure they have the capability to produce creative in-house, there's Pandora's Studio Resonate, which will handle the creative lift.

While Fanning's goal is to make the podcast ad-buying experience seamless, she feels it's imperative that brands don't simply plunge into podcast advertising with no real consideration for the listener experience. "You need to step into this space thoughtfully," Fanning says. "For podcast listeners, the experience is, 'This is my special time with my special people.' We're trying to preserve what makes it special."

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Oriana Schwindt

Oriana Schwindt has been covering the television industry for most of her professional career, starting with a byline in Rolling Stone at age 20 and working her way through outlets like TV Guide Magazine, the International Business Times, and, finally, Varie… read more