Nielsen’s Tony Hereau: Podcasts Score with Consumers

According to Nielsen’s Fanlink data, the number of “avid fans” of podcasting in the U.S. soared to 16 million households in fall 2017, up from 13 million the year before.  These podcast listeners are active consumers who spend above the national average on snacks, beer, liquor, tea, pet care and paper products, among others.

With a growing number of brands adding podcasting to their media plans, Nielsen’s Vice President of Audience Insights, Tony Hereau, spoke to MediaVillage about how marketers should approach podcast advertising and what kinds of ads are effective.  He also shared some of the report’s surprising takeaways (hint:  baby food and pet food brands should take a hard look at podcasting).

Alli Romano:  How do brands determine if podcasting is the right medium for them?  If so, how do they choose the right genre (or genres)? 

Tony Hereau:  We know the podcast audience is more young, affluent and educated than other types of media.  Nielsen's Fanlinks data is the first step to help advertisers connect their brands with the right audience.  In the latest report, we examine the avid fans of 14 podcast genres and which types of products they tend to spend more on.  For example, avid fans of the comedy podcast genre spend $131 per year on baby food.  This is 14% higher than the national average of $115.  A baby food advertiser will see greater ROI from this genre of podcast advertising because the audience already spends more on baby food.

Romano:  As you look across the podcast industry, what ad categories do you think are out in front using this medium?  Why have they been successful so far?

Hereau (pictured below):  The majority of ads you hear in podcasts have traditionally been from direct response advertisers.  Nielsen does not track ad spend in thepodcast category, but we have heard from our clients that the beverage category has really stepped up in 2018 with major national ad buys in podcasting.  Nielsen does measure podcast sponsorship effectiveness and the results have shown double-digit increases in purchase intent for brands of all kinds.  Many of these are host-read ads that really resonate with the core audience, also known as avid fans.

Romano:  What is the most efficient way for a brand to use podcast advertising?  Should they target both casual and avid fans in one category more frequently, or advertise across more podcast genres?

Hereau:  "The Riches are in the Niches" is a famous phrase in the podcast space and it is relevant to advertisers as well.  Spreading an investment around to a variety of podcast genres might be wise for first-time advertisers but following up with brand lift studies will identify the specific shows that really move the needle.  Podcast producers have been very creative at weaving ads into the organic conversation of the show.  Nielsen has tested host-read ads as long as four minutes that sound nothing like a traditional radio commercial. 

Romano:  Is there a particular podcast genre that offers the most growth potential for advertisers? 

Hereau:  No.  The whole podcast industry has been expanding.  As podcasting gets easier to consume on smart speakers and connected cars, mainstream audiences will eventually overtake the early adopters.

Romano:  Among the audience profiles of the podcast genres, what did you find most surprising?

Hereau:  We sure do love our pets!  Podcast fans spend $8.8 billion dollars a year on pet food.  Sixty-eight percent of podcast households are buying pet food.  Spending among avid podcast fans on pet food/pet care is higher than the national average for 12 of the 14 podcast genres featured in our report.  This makes podcast advertising a no-brainer for national pet food and pet care brands.

Romano:  Liquor and beer ranked highly across several genres, so that is a strong indicator for those ad categories to embrace podcasting.  What were some others that stood out to you and why? 

Hereau:  Spending among avid podcast fans on liquor, wine and beer is higher than the national average for 12 of the 14 podcast genres featured in our report.  It's no surprise that alcohol did not resonate with avid fans of religion and spirituality, or kids and family podcast genres.  Nevertheless, the popularity of beer, wine and liquor among the majority of the podcast genres would explain why the beverage category has been investing in the podcast space this year (according to our clients).  Podcasting's young adult audience also scores well with contraceptives, but we decided to restrict that level of detail to subscribers only.

Romano:  Based on the data, what are some specific groups of listeners that stand out as potential marketing targets?   Or ones that don’t align well?

Hereau:  There are certain types of products that do not resonate with podcast audiences.  Annual spending for prune juice, tobacco and hair growth products fall below the national average among avid podcast fans.  Products intended for an older audience may not resonate with the young adult audience of podcasting.

Romano:  Fans of nearly all podcast genres are more than 10% above the national average for annual spend, and many are above 20%, but the audience is still small relative to other media.  Given these factors, what are the biggest takeaways for brands?

Hereau:  It's amazing when you consider the medium of podcasting is somewhere in its second decade of existence, yet well-known national advertisers have still not made a significant investment in podcast advertising.  We know there is a great deal of interest, but we also hear that advertisers struggle with taking that first step.  We hope this guide sparks a conversation in the marketplace and shines a spotlight on the opportunities found in this growing advertising medium.

Photo credit: Henry Be - Unsplashed

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