Squarespace. Stamps.com. Casper. MailChimp (or rather, "Mail-Kimp"). Anyone who regularly listens to podcasts will recognize those names—it’s a short list of the companies that sponsor the vast majority of shows.
It’s an old-school advertising model: The companies shell out the cash that lets shows pay the bills, and the hosts mention their products on air. It works for both parties, much the same way it worked for soap operas during their heyday in the 1950s. But a lot has changed since then—so why hasn’t advertising for this type of media?
That’s the question that Karl Rosander, the cofounder and president of Acast Stories USA, a curated platform for podcasts, found himself asking. He and his cofounder, Måns Ulvestam, realized that the podcasting industry suffered from a severe lack of metrics. "It was really hard to get analytics," says Rosander. The more they dug into it, the more evidence they found of an outmoded business model. "For the big companies, even in Sweden, they had that sponsorship message where the podcaster read a sponsorship message," says Rosander. "What we saw was that all parts of the podcast ecosystem were broken."
He and Ulvestam founded Acast in April 2014 with the mission of shaking up the podcasting industry. "What Acast tries to do is fix those parts—monetization, distribution, hosting, metrics, and also discovery," says Rosander.
The company’s strategy is threefold: help listeners find new podcasts, help new and established creators better distribute their podcasts, and help advertisers tap into the growing podcast market with improved targeting and better metrics. It’s a model that could radically change the podcasting market, making it much more profitable for content creators by bringing in bigger advertisers—something that the burgeoning podcast market has yet to really experience, despite early success.
Acast’s free-to-use platform and app lets users browse or recommend podcasts and, like on Spotify, introduces them to new relevant shows and lets them share shows across a social network. Acast’s app hosts podcasts from a variety of distributors, including those with whom it has partnerships, like Buzzfeed, and those with whom it doesn't, like Start Up and Marc Maron’s WTF podcast. "Like other podcasting apps, ours enable listening to all the world’s content, but we do not monetize anything but ‘our’ shows," says Rosander. Acast currently hosts more than 600 podcasts on its platform, boasting over 24 million monthly unique listens, each playing with Acast’s advertisers attached, according to Rosander.
The platform also offers a way for creators to enrich their audio shows to help illustrate the story being told on air. "Audio will never go viral if it’s just audio alone," says Jenna Weiss-Berman, director of audio at BuzzFeed. "If it has photos, articles, and videos that go along with it, there’s a much better chance of it going viral."
In May of this year, Acast raised $5 million from Swedish firm Bonnier Growth Media in Series A funding, using the money to help launch their operations in the U.S. After launching in New York City in November, they announced a further $5 million of funding from Stockholm-based investment firm Alfvén & Didrikson, with a follow-on from Bonnier.
To help lead its U.S. charge, Acast recently brought former WNYC staffer Caitlin Thompson on board as director of content, and Sarah van Mosel, former vice president of sponsorship at New York Public Radio, as chief commercial officer, a move that is impressing those in the know. ("When they made that hire, I knew they were super serious," says Weiss-Berman. "Sarah is the podcast sponsorship guru.")
Acast is not thinking small. "I’m trying to make our platform the coolest, most well-positioned, most forward-looking platform," says Thompson, who considers podcasting to be "the last emergent mass medium."
She knows she has her work cut out for her. Podcast listenership has grown exponentially in the last few years, thanks in a big way to the success of Serial, whose first season currently holds the record as the most listened-to podcast in history. Still, according to Pew Research, only 17% of Americans have listened to a podcast in the past month, and one-third of Americans age 12 and over have ever listened to a podcast. "The listenership has to grow still by several orders of magnitude. It’s still relatively small," says Thompson. "It has to grow in order to attract the huge advertisers that are really going to make it mature."
Acast has big plans to attract blue-chip advertisers like McDonald’s, ESPN, the film industry, and car manufacturers to podcasting, thanks to their dynamic advertising technology and ability to target listeners based on location and other data. (Other companies, such as Panoply, are also moving forward with dynamic ads.) "If McDonald’s wants to market a new hamburger at lunch hour in a territory where the new burger is available, but only to people who both listen to sports and food podcasts, they can," says Rosander. "Before Acast came to the market, that was not possible, but now it is."
Acast has other means to channel more money to podcast creators, too. "Since we unlock the whole back catalog due to our patent-pending dynamic ads insertion, we create 30% more inventory to sell ads toward," explains Rosander. That means that if Serial had been hosted on Acast, they could go back and sell advertising on their wildly popular first season. For podcasters that don’t have the infrastructure for (or interest in) developing the business side of their products, Acast will take over the operations for shows, similar to what Google Ads does for bloggers and websites, usually for a 50/50 split, according to Rosander. Their tech can also automate ad placement and targeting, meaning podcasters wouldn’t have to sell advertising themselves. For journalists moving into the podcasting sphere, this could be a way to strengthen the wall between advertising and reporting.
Thompson sees other revenue opportunities in the type of content they choose to host and develop by reaching audiences that haven’t necessarily listened to podcasts before. "I see a huge opportunity in empowering women and people of color, because those are hugely untapped markets that are hugely advertiser friendly," says Thompson. To that end, Acast has developed deals with young-skewing channels like Fusion and BuzzFeed, which produces Another Round.
"Not only is Another Round the best podcast there is, but it reaches a young African-American audience that never listened to podcasts before," says Thompson. She also brought the Call Your Girlfriend podcast onboard. "Advertisers are dying to work with [Call Your Girlfriend] because they reach all these really cool, influential women—and men—who listen to them," says Thompson. "Growing our brand around those types of shows, without excluding any of the other shows, is the real way forward."
Advanced metrics aren’t necessarily inexpensive, though, so advertisers will find that Acast costs more than average platforms—and Rosander has no qualms about that fact. "With true metrics and third-party tracking we charge more, and deservedly so," says Rosander. The metrics that Acast can track include downloads and/or streams by app, operating system, browser, device, and referrer. They can track live data, drop-off rates, listening curves via their app or embeds, click-through rates, geo data, demographic data, and much more. Perhaps most valuable to advertisers is that Acast can track actual verified delivery of ads, according to Rosander.
"We hear all the time from potential platforms and hosts, and very few of them sound particularly appealing," says BuzzFeed’s Weiss-Berman. "We’re BuzzFeed, and we’re always looking for who is far ahead in tech and dynamic ad insertion. I ended up taking a meeting with Acast, and was immediately impressed by the product. It’s quite technologically ahead of any podcast host that I’ve seen."
That’s exactly what Acast hopes to deliver. "It’s important to understand that the Swedes come from the future," jokes Thompson. "They live in a country where everyone streams everything. We can’t even listen in our subway system yet. Some of the stuff that I’m doing is to position us to be ready for the next iteration of behavior."