WORKWEEK

Guest Post by Ben Bradbury (@benbradbury_)

What audio company drove more revenue than Spotify, Twitter and Snapchat combined in 2020?

Oh wait, it’s not a company at all. It’s a product.

Airpods.
 

Apple sold 110 million Airpods last year. That makes them a multi-billion dollar company in their own right — this is a signal that audio as a medium is exploding.

I believe podcasts are one of the most under-leveraged opportunities for B2B marketers out there right now. But to understand the audio opportunity, we have to understand how we got here.

In The Beginning…

Technology enables new business models, which in turn unlock the ability to create content. When Steve Jobs unveiled the iPhone (technology) in his legendary 2007 announcement he paved the way for the app store (business model).

One content medium that now “had an app for that”? Podcasts. It’s no fluke that Airpods are crushing right now — Apple has been leading the podcast revolution from the start. 

Smartphones ushered in a new wave of mobile-first consumers and Creators. Before smartphones, listening to podcasts was a clunky experience. Listeners had to manually download .mp3 files onto their listening device (RIP Zune). With smartphones, consumers could now download podcasts directly to their phones, via their listening app of choice, wherever they wanted.

The consumption barrier was eliminated — and adoption skyrocketed. The amount of adults in the US familiar with podcasts leaped from 22% in 2006 to 37% in 2007 (it hit 76% in 2021).18 years since the term “Podcasting” was coined we’re seeing growth from the top-down and bottom-up: A flurry of acquisitions from Amazon Music, Spotify and Apple signal that big tech is betting on audio talent and technology, and independent Creators have a production studio — and the ability to reach billions — in their pocket.

The Impact on Operators

Maybe my favorite part of all of this? We’re just getting warmed up. 

Here’s how the US audio industry has monetized over the last 100 years:

Source: Matthew Ball

Key Takeaways:

• Revenues peaked in 2000 with the growth of CDs and terrestrial radio. But both mediums are dying out and are now being replaced by a second, more promising wave that includes audiobooks, digital streaming (Spotify/Apple Music) and ad-supported access (freemium).
• See that tiiiiny sliver of green on the right hand side? That’s podcast revenue. The audio category is 40 times bigger than it was a century ago, yet podcast’s “market cap” is still a tiny percentage of overall audio revenue.

15 years after the iPhone & App store unlocked podcasts, everyone ranging from broadcasting corporations to indie podcasters in their bedroom have amassed millions of listeners. And the party’s just starting.

What have we learned since?

Podcasts Drive Customer Loyalty

First, podcasts are a great way for media operators to increase customer loyalty. Established enterprises with high revenues and low NPS have great synergy with podcasts, whose loyal fanbases typically have low revenues but high NPS. 

The personal connection your audience builds with a show host increases LTV, decreases churn, and boosts overall brand performance.

This positive signal allows companies to differentiate themselves in otherwise competitive fields. Take a16z for example: The a16z podcast network is on a mission to be “your go-to place for understanding the future as all our lives change through tech.” By freely sharing their best information, a16z makes themselves more attractive to both potential investors and founders seeking investment. Audio allows them to build trust with usually hard-to-reach demographics, i.e. senior decision makers.

Podcasts Capture First-Party Data

Podcasts enable operators to own a loyal audience in a fast-growing medium with first-party data you can market to. There aren’t many other mediums that can deliver the same promise.

Two Trends Matter Here:

• First is the rising importance of owned audiences. CACs are rising across the board, and third-party data is disappearing as privacy becomes a priority. Companies relying on paid acquisition are turning to other channels to reach the right relationships.
• Second is that our faith in institutions and big business is eroding quickly. We trust companies less and less, and turn to people instead. It’s exactly why at Astutely we chose to focus on turning the Founders & CEO’s brand into a marketing channel: We could often form a deeper connection with the company leaders over a faceless brand. It’s individuals, not companies, who control today’s narratives.

Podcasts Take Full Advantage of These Trends:

• They’re distributed through an RSS feed which you own, and are poised to give increasingly-rich insights on your audience as platforms like Megaphone provide better demographic data. 
• They allow listeners to build an intimate relationship with a host or set of co-hosts. If you listen to your favorite show for 30 minutes each week, that’s 2 hours a month spent absorbing someone’s ideas — I don’t even manage that with my close friends sometimes.

Podcasts Build a Bridge to Affinity

I recently spoke to Marketing Examined’s Alex Garcia (we have something exciting to announce with him soon…), who said “Podcasts are a bridge to affinity.” He nailed it.

Podcast’s personal nature lets you build an intimate connection with your audience in a way that isn’t possible through the written word. It’s easy to imagine being a “fly on the wall” in the room of a killer interview, but it’s impossible to imagine the same through a newsletter.

The intimate relationships aren’t only for listeners — hosts can leverage their show to connect with guests otherwise out of reach. Harry Stebbings started 20 Minute VC in his mum’s kitchen 7 years ago. Last year he announced he’s raising 2 funds totaling $140M.

How did he do it? By building a reputation for consistently sharing high signal tech investing information from industry leaders.

When VCs are having to work harder than ever to get access to the best deals, Stebbings has used his podcast platform as a wedge to build an investment pipeline that’s bursting at the seams. (His first micro VC fund was oversubscribed 3x in less than a month) 

Getting Started

To start leveraging the audio opportunity outlined above, operators have 2 paths:

1. Build an audience from scratch in-house. This is the longer path, but more likely to be fruitful as you have creative control from day one. When choosing your show topic, I like to think of great shows as fulfilling a promise. Ask yourself: “What promise can we deliver to our listeners every episode?”
2. Acquire an existing podcast. This gives you an in-built audience you can market to. If you go this route, be careful: You don’t want your new show to become a 30 minute sales pitch. Let the show host continue to drive the conversation, while thoughtfully planting seeds of your new partnership.

In order to market sustainably over the coming years, I believe B2B businesses will need to build a direct relationship with their audience that provides first-party data. Podcast RSS feeds represent a nascent, high-potential opportunity to do exactly that.

The Creator Opportunity

After a viral LinkedIn post propelled me into the world of personal branding 5 years ago, I’ve always believed that people buy from people. It’s been ingrained into our philosophy at Astutely from day one. So when Adam explained to me how Workweek were putting Creators at the heart of their business model, I quickly saw the potential to take the impact we’re making to the next level. 

Creating podcasts with Workweek lets us drive value across the flywheel: They make newsletter subscribers stickier, amplify our drops, shine a light on promoted jobs and much more.

That’s why I’m pumped that Astutely is joining the Workweek rocket ship. They’re a team who understands the need to let personalities own the relationship with their audience, and the value of first-party data. 

Workweek’s creator-driven model signals a much larger trend of where media is heading, and I can’t wait to start bringing the Workweek Podcast Network to life with a range of incredible talent behind the microphone.

Thanks for reading. If you enjoyed this piece I’d love to continue the conversation with you on Twitter (@benbradbury_). You can follow me for more insights on B2B Audio, Podcasting, and hot takes on where the industry is heading next.