Why Two-thirds of Podcast Listeners Act on Ads

Stocks closed lower as investors weighed a downbeat jobs report and its potential effect on the Federal Reserve’s timing for rate hikes.

The Dow fell 31 points, with 16 of its 30 components retreating; the S&P 500 Index slipped by 6 points; and the Nasdaq lost 28. Advancers topped decliners by eight to seven on the NYSE, and decliners beat advancers by almost five to three on the Nasdaq. The prices of Treasuries strengthened. Gold futures jumped $30.30 to close at $1,242.90 an ounce. The price of crude oil fell 55 cents, settling at $48.62 a barrel.

For the week, the Dow was down 0.35%, the S&P 500 was up 0.02%, and the Nasdaq edged up 0.21%.

In other business news:

• U.S. employers added 38,000 workers in May, the smallest gain since September 2010, the Department of Labor reported. Revisions to March and April results cut 59,000 from the previous employment readings. The jobless rate declined to 4.7%, the lowest level since 2007, as the participation rate of working-age people who are employed or seeking work fell to 62.6% from 62.8%. A range of industries posted employment declines, including construction, manufacturing, and mining. Verizon’s ongoing worker strike drove declines in the information technology sector. On a brighter note, average hourly earnings edged up 0.2% from April and rose 2.5% from a year earlier.
• The U.S. trade deficit expanded a seasonally adjusted 5.3% to $37.4 billion in April, according to the Department of Commerce. Exports rose 1.5% as non-U.S. customers ordered more aircraft parts, computer accessories, and petroleum, among other goods and services. Imports rose 2.1%, due in part to a 10.5% increase in imports from China. March’s trade deficit was revised down to $35.5 billion, marking the smallest trade gap since 2013.
• New orders for U.S. manufactured goods fell 1.9% in April, following March’s 1.7% gain, according to the Department of Commerce. April’s gains were driven in large part by a 65.3% jump in commercial aircraft orders. Orders for nondefense capital goods minus aircraft—viewed as a measure of U.S. business investment—declined by 0.6%. Orders for durable goods rose 3.4%.
• The U.S. services sector grew last month but at its slowest pace since 2014. The Institute for Supply Management’s nonmanufacturing index fell to 52.9 in April from March’s 55.7. Any reading above 50 indicates expansion. New orders fell 5.7 points to 54.2. Employment decreased to 49.7—contraction territory—from the prior month’s 53. Business activity fell to 55.1 from 55.8. Prices paid increased to 55.6 from 53.4.

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If you have a business, small-, mid-, or large-sized, and you’re wondering where to place your advertising dollars, you may want to check out the world of podcasting. According to a new comScore study that polled 2,000 U.S. respondents, two-thirds of podcast listeners have acted on ads they heard in a podcast episode. According to Adweek, this means that, after hearing podcast ads, the listeners either researched or purchased the product or service they heard about during the episode.

Granted, the comScore study was commissioned by a start-up that hosts seven of its own podcasts, so the act of promoting survey results that show podcast ads are good, well … it behooves them. But in concert with other data, it’s clear that podcast ads have a certain stickiness with consumers that other types of ads might not. Adweek also featured results from a well-known tech columnist’s survey, which showed almost two-thirds (or 32%) of approximately 1,500 respondents never skip the ads featured within podcast episodes.

Advertisements in podcasts are easy to skip. After the hosts say “And now, it’s time for a quick message from our sponsors,” the fast-forward button is only a click away. So, in the era in which TV viewers can DVR or TiVo past broadcast ads, website visitors can ignore banners, and mobile device users can actually block ads altogether, why are so many consumers willing to listen to 30- to 60-second podcast ads, sometimes enduring two in a row?

From my own experience, it comes down to authenticity (the hosts often read the ads themselves), earned rapport (the host and guests have kept you compelled, thus far), and infusion of the podcast’s tone and substance into the ad content (for example, in the podcast Comedy Bang Bang, the host reads ads akin to a comedy sketch, continuing his on-air persona of absurdity).

Podcast ad spending could reach $53.1 million in 2016, according to ZenithOptimedia. And the listener base is growing at a record clip. A new study by Edison Research and Triton Digital reveals that 2016 has seen the biggest surge in podcast listening in the medium’s history. According to the Peoria-Journal Star, 21% of listeners 12 and older listen to at least one podcast a month, up from 17% in 2015. Active listeners consume about four hours of podcast content a week. And 71% of podcast consumers listen to episodes by way of mobile device (up from 42% just three years ago).

Across digital media, today’s ad environment is clever and efficient and does its best to be relevant—but it can also border on intrusive.

I recently received a promotional email from a photo-processing business that showcased all the cool, customized gifts I could buy featuring my photos (mugs, keychains, mousepads, etc.). And by my photos, I mean the range of pictures I’ve posted on Facebook over the past 12 years. That’s right, through the power of data and the social graph, an advertiser grabbed photos of my family and friends from my social media account and took the liberty of using them in a customized email promo that I was sure to love.

Riiiiight.

In contrast, a podcast ad seems so much more honest. Explain the product or service, put the host’s name and reputation behind it, make it engaging, and leave the rest up to me: Maybe I’ll research it; maybe I’ll buy it. To quote a vintage ad from my childhood, a podcast ad makes money the old-fashioned way: It earns it.