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Advertising | Featured Post | Perspectives

Duopoly dystopia

Google and Facebook’s dominance of the digital advertising market is well documented. Pivotal Research’s Brian Wieser estimated at the end of 2017 that these two companies “accounted for 73% of all digital advertising.” In the same report, he also estimated that the duopoly accounted for 83% of all growth, which means their grip is only getting tighter.

Scale is the main reason these companies dominate. Facebook has a huge user base, particularly when you factor in its ownership of Instagram and WhatsApp. And let’s not forget its “like” buttons on more than 8.4 million websites, a number Facebook recently disclosed in its answers to lawmakers’ questions during the Cambridge Analytica hearings. Despite lingering legal questions, those “like” buttons continue to collect data about the sites visited by Facebook users regardless of whether those consumers are logged in to the platform. Even more concerning, the buttons also collect data about non-Facebook users. The result is a massive and rich database of consumers’ personal information and activity, which Facebook offers to advertisers for targeting ads to very specific audiences on and off Facebook’s properties.

Google also offers hugely popular consumer services including its search, Gmail, Chrome, and maps applications. Of course, it mines them for very sensitive information about consumers (e.g. personal messages, friend networks, interests, location). Oh, and let’s not forget that Google has a hand in every part of the digital advertising supply chain. Like Facebook, Google is ubiquitous and nearly impossible for consumers to avoid.

No competition

Some might be tempted to argue that these companies serve as competitors to one another. Except that they don’t compete on price. The fact that these services are offered free of charge has enabled their lawyers to shield them (so far) from any antitrust scrutiny in the U.S. What they really compete over is which company can collect more data about consumers. This unbridled competition for data is even more corrosive as it lacks transparency and they offer no effective choice mechanisms for consumers.

Consumer groups assert that this dynamic is bad for privacy. And, they might have a point: Consumer trust is at all time low while adoption of ad blockers continues to rise. Yet, Google and Facebook haven’t felt the impact of this lack of consumer trust. That’s because these companies don’t care where ads are served and they have virtually unlimited places to serve ads (meaning ads can appear near any content, which can create a negative impact by association). Instead, other tech companies, marketers, and publishers bear the brunt of consumer ire.

A dangerous game

But, there is more going on here. Facebook and Google have created a feeding frenzy in the vast, and expanding, data pool. Other companies recognize that have to jump in or risk their ability to compete for digital advertising dollars. Verizon bought AOL and Yahoo! solely to have more ad technologies and inventory. Combined with the significant information about the activities of their user base, this might give them an opportunity to compete for the duopoly-dominated digital advertising dollars. Not to be outdone, AT&T bought AppNexus, the largest independent ad technology company. It’s hard to fault these companies for joining forces given the world they’re competing in.

From my perspective, the duopoly is creating a giant game of musical chairs. If this dynamic is allowed to continue, it’s not hard to imagine that publishers will be forced to pair up with a telecom provider or to form giant conglomerates in order to ensure that they have a chair when the music stops.

Unfortunately, this will have profound effects on well-known premium publisher brands and an even more devastating impact on the ability for new voices to emerge. Ironically, the internet was supposed to increase the number and diversity of voices. Instead, the duopoly is quietly reshaping the web into a dystopian data collection machine.

Featured Post | Innovation

Will IGTV deliver for publishers?

With a new platform comes the recurring decision for skeptical publishers: How much should they care? And in the case of a new platform from Facebook, there’s every reason to be wary.

Still, publishers must consider the new Instagram TV (a.k.a. IGTV) video app because of two big reasons: 1) Instagram’s very large active user base of 1 billion; and 2) the chance to reach a younger audience via video.

IGTV launched last month as a vertical video version of YouTube, with users able to upload pre-recorded video up to 10 minutes long – or up to an hour for the coveted influentials and those with large followings. Every Instagram user has their own IGTV channel to post this content. For a generation increasingly eschewing linear TV for digital streaming options, it’s yet another way to consume and create video.

Indeed, IGTV puts Instagram in direct competition with YouTube, which has 1.9 billion monthly logged-in users and has long been a destination for video creators. It also competes with its parent company Facebook, which has been boosting its own viewing platform, Facebook Watch. Whether publishers can reap the financial benefits of this new form of production and consumption, though, largely depends on opportunities for monetization. And right now, there aren’t any video ads. Plus, publishers will have to produce programming for yet another platform, possibly leaving IGTV as a place for experimentation and not much more.

Building a Younger Fanbase

At its launch party for IGTV, Instagram cited data that teenagers are watching 40% less TV than they did five years ago. According to a survey by Trendera that was commissioned by video producer Awesomeness TV, 71% of Generation Z say their mode of entertainment consumption is streaming — with 71% also saying YouTube is the best place to watch longform content, and 75% saying Snapchat is the number one platform for staying connected and informed.

If Instagram can marry the Snapchat and YouTube worlds well with IGTV, it can be a prime destination to entertain a younger fanbase that’s used to viewing vertical video, and prefers the direct interaction Instagram offers. For YouTube stars looking to gain younger followers and wanting to take advantage of Instagram’s swipe-based search that makes their videos easily discoverable, it makes sense to experiment with IGTV. And because influentials earn most of their money with brand marketing, they have nothing to lose. So even if Lilly Singh might actually turn to Twitter to announce hiccups with loading content to IGTV, it makes perfect sense that she’s on IGTV.

Whether IGTV will become the primary mode people view other kinds of entertainment, though, is another story. Part of the beauty of YouTube’s horizontal viewing experience is that it is the place where linear TV can become digital. That’s why it’s become a prime spot to watch that late night news clip or music video. And as Wired’s Louise Matsakis and Lauren Goode pointed out, watching video on YouTube isn’t just an isolated personal viewing experience — it can also be social, in that people can play YouTube video on a television or play it out on a computer monitor for friends. “It’s hard to gather around a phone to watch vertical video and even more awkward to [broadcast] one onto a TV,” they wrote.

Publishers Take Note, and Take Chances

For advertisers and brands already turning to Instagram stories, IGTV seems like a natural destination for longer content. However, there’s the risk of looking too stuffy, stilted or worse: an infomercial. News outlets, meanwhile, can use IGTV to release more experimental video stories that can’t fit into Instagram Stories’ one-minute time limit. BBC News, BuzzFeed, Sky News, Vice, The Economist, and Vogue are all early adopters.

But at this point, their IGTV content is a mixed bag. BuzzFeed has been re-posting content from its other social platforms, The Economist is trying its hand at airing short documentaries, and 12 different BBC accounts are funneling content into the BBC’s IGTV channel. The way publishers experimented with Facebook Live comes to mind here.

Although many publishers also had financial partnerships with Facebook to use Live, after a while, the initial excitement at a new method of distribution waned to the reality of resources. Much of that has to do with the fact that for social content to succeed, it has to be customized for the platform — and many outlets just didn’t have time to cater content for Facebook Live. While publishers like the BBC are seeing some success with IGTV, they’re also realistic that we’re still in its early stages.

“We’re not looking to reinvent the wheel, as we want to test the platform and see if it works for us,” Ciara Riordan, BBC News’ deputy social news editor, told the Press Gazette’s Sam Forsdick.

The consensus among publishers at a recent roundtable discussion at CUNY gets closer to the truth: It makes sense for publishers to experiment with IGTV, especially if they can repurpose content from elsewhere and the financial stakes are low. But for IGTV to be worth it, the financial benefits have to be high. Otherwise, IGTV must show itself as a game-changer in attracting new audiences. And so far, neither are true. Instagram has said ads will eventually come to IGTV. But with no way to currently monetize directly from the platform — and the dominance influencers already have on the attention economy — it’s no wonder that publishers, even if they can attract younger audiences, are fine taking a wait-and-see approach to IGTV.

Featured Post | Innovation | Revenue

How publishers can (and should) harness the power of membership

Adopting a membership orientation can be a simple and powerful way for media companies to reinvent their business models. In fact, membership can make them practically disruption proof.

Over the past decade or more, publishers have had to deal with two related transformations that are causing them to rethink their business models: the shift from print to digital and from ad-centric to reader-centric.

The shift to digital dominance has changed the economics of production, the limitations on timing and publishing frequency, and the reach on distribution. Startup media companies can establish a brand, create content—perhaps without a dedicated team of content creators—and distribute it globally with a minimal investment. Legacy publishers have had to seriously rethink everything in light of the shift—and rising competition.

There is a glut of content available, much of it available for free. This means that many readers are less willing to pay for much of the professionally created content of traditional media companies.

Meanwhile, advertisers have more places to advertise, at the same time as consumers are increasingly able to hide or ignore the ads, making advertisers less willing to invest in cost-per-click ad models.

What’s a publisher to do? The answer could be rethinking your offering beyond the current product, with a membership mindset.

The Rise of the Membership Economy and the New World of Subscriptions

With the rise of what’s come to be known as the Membership Economy, companies in virtually every industry from software (Salesforce) to hardgoods (Peloton) have been moving from ownership to access, from anonymous transactions to known relationships with customers, and from one-time payments to ongoing payments.

Technology is extending the ways companies can interact with the people they serve. Always-on devices, declining costs of both generating and distributing content, and perhaps most of all, the ability to leverage data and algorithms to provide a more personalized experience, have changed consumer expectations. Consumers expect companies to optimize services for their individual needs, and to “learn” their preferences over time.

Companies that optimize their services around building a long-term formal relationship with their customers, rather than focusing on their own products or short-term revenue, are disrupting long-time players. Think of what Amazon, and particularly Amazon Prime, has done to retail, or what LinkedIn is doing to professional associations and recruiters.

These membership-oriented businesses are able to build predictable revenue through subscription pricing, even as many traditional subscription businesses struggle. This is because they understand that the initial moment of transaction is the starting line, and not the finish line. To move from a subscription to a membership approach, businesses need to focus on engagement, and understand the warning signs of churn.

Membership is the mindset of the company—the focus on understanding what the customer wants and is willing to pay for, forever, and delivering that. Subscription is just a pricing decision. Many media companies have always offered a subscription option, but few have been focused on treating their subscribers like members, and focusing on their evolving, long-term needs.

But some media companies have committed to membership approaches, focusing on winning their subscribers for the long-term and in many cases offering new features to better achieve their subscribers’ goals. New media companies like Spotify and Netflix have pointed the way to success, and traditional media companies like the Wall Street Journal, the Guardian and the New York Times have followed that lead with a member-centric approach.

Three Steps to a Membership Mindset

This approach can be adapted to suit virtually any media company in 3 steps.

Step one

Get a clear picture of who your “members” are. Are you in business to support advertisers or readers? There is no shame in either. But too many publishers are getting lost in the middle—trying to become more reader-centric while not being willing to give up any ad revenue. The problem is that advertisers want volume of eyeballs while readers want unique content and experiences. Their goals aren’t aligned, and media companies that spread themselves too thin, trying to manage both, end up doing neither well.

Step two

Determine your “forever promise” to those members. Is it around entertainment or deep analysis?

If your focus is on readers, is your promise to be hyper-focused on a specific topic like The Information or broad and high-level like theSkimm? And if you serve advertisers, how creative are you in devising solutions that help them achieve their ongoing business objectives? If you asked your best (happiest, most loyal) subscribers why they stayed with you, what would they say?

Step three

Use that “forever promise” as a guiding principle in determining the content and features you offer. Don’t be limited by your current product and packaging.

Netflix used to offer “3-dvds-out-at-a-time” and then moved into streaming content. Now they are investing $8 billion to create unique content to deliver through multiple channels including cable and mobile device. But their forever promise of “a great assortment of professionally created video content delivered in the most efficient way possible with cost certainty” hasn’t changed at all.

Once you start focusing on your best members, and optimizing your offerings around them, instead of building around your products (magazine, newspaper, 30-minute sitcom) you will create a virtuous cycle of product and service creation that protects you from competition and builds tremendous loyalty.

Does Information Really Want to Be Free?

There’s a piece of Silicon Valley folklore that has Steve Wosniak and Stewart Brand in conversation at the first “hacker conference” in 1984. Apparently Brand told Wosniak that information wants to be free. To this day many believe that consumers are unwilling to pay for any kind of content. This is simply not true as everyone from Netflix to The Financial Times has proven.

While it’s OK to give some content away for free, as a trial, or even invest in a freemium model, it’s critical to make sure you understand the return on investment of your free component.

Many organizations are using a “metering” model, in which readers get a certain amount of free content each month before hitting a paywall. With a few exceptions, this is generally a terrible model. Consumers can “game the system,” consuming as much free content as they can get without any intention of paying. Publishers aren’t able to discern between good prospects and free riders. And they can’t treat different segments differently.

Metering is neither a clear trial—a way for someone to understand the value you provide—nor does it provide a benefit to the company (like data insights) or to paying subscribers (a network effect, like LinkedIn). It’s a tactic in search of a strategy.

An increasing number of savvy publishers are closing the metering loophole, like the Boston Globe, which has gone from 10 to 5 to 2 free articles per month, since launching digital in 2011. The New York Times has also dropped from 10 to 5. At the same time, organizations are tracking the journey from prospect to paying subscriber, making note of the articles and topics that drive conversion and retention.

When you optimize content around paying subscribers, and treat those subscribers like members, the metric changes from clicks to engagement among paying subscribers and qualified prospects. Suddenly Kim Kardashian articles aren’t seen as successful, while in-depth analysis of the bond market, with its small but fully committed following, becomes “Most Valuable Content.”

Taking the Plunge to Membership

It can be scary to change the business model. Moving to membership requires focusing on a specific group of people, and letting other readers go. It requires clarifying your corporate mission. If you are going to have an obligation to your readers, be specific. By “readers” is that anyone who might ever read an article? Or paying subscribers? And if none of them paid you, do you still have an obligation? Just because you have always offered certain features or content, if it doesn’t attract new subscribers, or hook them so they’ll never want to leave, there’s no reason to keep those features.

You also might want to look at new features, like live events, in-depth research or educational content to more fully deliver on your promise.

I recently spoke to a group of senior business and editorial executives of major publishing companies. Many held that their businesses would be unable to survive without advertisers. And yet, many others (of all sizes and from across the globe) have been able to build new models blending old offerings with new ones and being paid by their consumers. It’s possible, but it requires focus and discipline.

It’s hard enough to join the Membership Economy as a startup, paths blazed by Salesforce, LinkedIn and Netflix. But for companies that have been around for decades, or even centuries, transformation is hard.

There are the tactical changes: how does content creation change when the goal is paid loyalty and binge watching and not anonymous “drive by” consumption? What about selling to consumers and not corporate advertisers?

But there are also cultural changes: it can be hard to take a more data-driven approach in an industry based on experience and instinct. As new skills become more important, what happens to the influence of long-time employees? And how do you find the courage to take very real risks that might tank a proud and successful organization?

It’s not just publishing facing these challenges. Retail, consumer products, nonprofits, services, manufacturing—any business that depends on customer engagement and loyalty is dealing with disruption.

And the north star to guide these new paths is the customer.

About the author

Robbie Kellman Baxter is the founder of Peninsula Strategies LLC, a consulting firm based in Menlo Park, CA that helps companies excel in the Membership Economy. Her clients have included large organizations like Netflix, SurveyMonkey, and the Wall Street Journal, as well as smaller venture-backed start-ups. Over the course of her career, Robbie has worked in or consulted with clients in more than 20 industries.

Robbie has been quoted in or written articles for major media outlets, including CNN, HBR.org, and The New York Times. She has an AB from Harvard College and an MBA from the Stanford Graduate School of Business.

Before starting Peninsula Strategies in 2001, Robbie served as a New York City Urban Fellow, a consultant at Booz Allen & Hamilton, and a Silicon Valley product marketer.

A sought-after keynote speaker, Robbie has presented to thousands of people in corporations, associations, and universities around the world.

Featured Post | Innovation

From search to smart speakers: Why voice is too big for media companies to ignore

Voice technologies are hot right now. Consumers are increasingly using voice-driven services on smartphones and smart speakers, which is changing the way content is sought out and consumed. This escalating trend has clear implications for marketers, content creators, and consumers.

Here’s how this market is evolving and what it means for media companies.

Mobile and the rise of voice-based tools

Nearly ubiquitous smartphone adoption has created opportunities for a plethora of new products and services, including those driven by voice. Perhaps the best known of these are personal digital assistants like Siri, which was introduced by Apple in 2011. It was followed by Alexa (Amazon) and Cortana (Microsoft) in 2014, and Google Assistant in 2017. Today, nearly half of US adults (46%) use these tools.

And as voice recognition programs become more accurate, they are impacting online search habits. In 2016, Google reported that 20% of searches on Android were already being made using voice. GlobalWebIndex also observed that, in the 34 markets it covered, 25% of those aged 16-24 had used voice search on their mobile in the past month. In fact, by 2020, comScore predicts that half of all searches will be conducted by voice.

Voice on Smart Speakers

Smart speakers are one of the top consumer tech trends right now. The 2018 Digital News Report, produced by the Reuters Institute for the Study of Journalism, found that in major markets such as the US, UK, and Germany, usage of these products had more than doubled over the past year.

Question: Which, if any, of the following devices do you ever use (for any purpose)? Base: Total 2017-18 sample in each market. Source: Digital News Report 2018, Reuters Institute.

A March 2018 study from Voicebot.ai and the voice app company, PullString, found that “19.7% of US adults [about 47.3 million] have access to smart speakers today. That is up from less than 1% of the population just two years ago.” By 2022, according to Forrester Research, 50% of US households will have a smart speaker.

The rapid adoption of voice technologies – from voice search to smart speakers – is noteworthy, especially when benchmarked against the take-up of many other more established technologies.

Hannah Ritchie and Max Roser (2017) – “Technology Diffusion & Adoption”, published online at OurWorldInData.org and Voicebot.ai, Voicebot Smart Speaker Consumer Adoption Report 2018 https://voicebot.ai/2018/06/02/4reasons-cmo-care-about-voice/

Why these technologies are growing

Typically housed in shared spaces like the living room and/or kitchen, smart speakers can be used by multiple people. Google has noted how “in a short period of time, voice-activated speakers have become part of people’s routines.”

Reasons for this include the ability to use the technology while doing something else (multi-tasking), the fact that people speak more quickly than they can type (speed), and increasingly “human” interfaces.

Indeed, “People perceive the devices as more than just an electronic toy.” Google found that “they’re more akin to another person or a friend.” In 2017 research with over 1,600 users of voice-activated speakers, 41% said that using the technology feels like they’re “talking to a friend of another person.” All of these traits are only going to grow as these technologies continue to evolve and improve.

What this means: Four key considerations

Given the rise of voice-enabled devices and tools, here are four strategic considerations and opportunities for brands and media companies:

1. Ensure your content is optimized for voice search

Search Engine Optimization (SEO) never stands still, but the voice revolution presents some new challenges. Recognizing this emerging trend, back in 2016, Campaign advised “savvy marketers” to “write content in a natural, conversational voice that answers the questions your consumers are asking.”

“Website content in the era of voice search isn’t about keywords,” they wrote, “it’s about semantic search and building the context related to answering a question.”

On smart speakers, as Trustpilot’s Jason Barnard and Chee Lo have explained, there’s a further consideration. Unlike traditional search engine results on desktop or mobile, where you get a range of options, voice searches tend to be highly specific and typically result in a single response.

As Rebecca Sentance reflected on Search Engine Watch, “the rise of voice search is transforming search engines into “answer engines,” which require a different strategy and set of ingredients for success. This strategy has come to be known as AEO, or “answer engine optimization”.”

There’s a raft of tip sheets and detailed articles on this topic for those new to this topic. In one of them, Bryson Meunier, SEO Director at Vivid Seats, recently outlined 12 recommendations in an article for Search Engine Land, advising: “Focus first on optimizing for conversational keywords and implement Actions for Google to get more traffic from voice search.”

2. Harness opportunities for content innovation and delivery

To date, most activity on smart speakers tends to be functional. Consumers typically ask for a weather updates, jokes, or travel directions. consumption of news content and podcast playback typically fall much lower on the list. But that doesn’t mean that publishers and media companies are not experimenting with content and new interactive formats for these platforms.

Publishers from NPR to Reuters, the New York Times and CNN, as well as local news providers such as the Tennessean, IndyStar, and Texas Tribune, are all creating short audio briefings designed to be heard on smart speakers. Apple’s new HomePod will feature content from the Washington Post by default.

Alongside more broadcast-like content delivery, 2018’s Digital News Report noted how “media companies like Quartz are also developing apps (or ‘skills’ as they are known) that allow conversational interaction with the devices.” One such experiment, produced by the BBC in late 2017, featured a 20-minute “interactive science fiction comedy story” for Amazon Alexa and Google Home – called The Inspection Chamber – which encouraged listened to “play your part through voice interactions.”

And in April 2018, Netflix launched an interactive audio drama to promote its Lost in Space reboot. According to Variety: “The audio adventure, which lasts between five and six minutes, features a branched narrative and multiple-choice questions and answers. It was recorded with participation of the show’s cast, and produced in collaboration between Netflix and Google.”

These examples show how international, national, and local players across the media spectrum are experimenting with content being heard through smart speakers.

3. Explore opportunities for consumers to make voice-activated purchases

Jeff Malmad, managing director, Head of Life+, for WPP Group’s Mindshare North America, argued at the Mobile Marketing Association’s Impact conference earlier this year that “depending on your marketing category… 30 percent of your sales will be from incidental loyalty, based on voice searches, and based on voice purchases.”

Although this functionality perhaps lends itself more naturally to other products (Malmad highlighted an advert featuring a couple placing their usual Starbucks order through the Alexa app in their Ford car), voice shopping is predicted to be a $40 billion market by 2022. That’s up from just $2 billion today.

It could be used by media companies for on-going, or one-off, subscriptions, memberships, micropayments, downloads, or access to exclusive content.

Either way, this is an emerging vertical which – like voice technology per se – that cannot be overlooked.

4. Determine if there are new revenue opportunities

Although the eCommerce functionality of this technology remains relatively nascent, companies like CNBC are exploring more traditional advertising packages, such as sponsorships, on these platforms.

John Trimble chief revenue officer of Pandora, has highlighted the advertising potential, given the ability of consumers to respond to audio messages in a manner not previously possible. As he wrote in Recode earlier this year:

“Radio ads have been around since the days of Marconi, but listeners to this day still can’t respond to an ad the way an Alexa user can interact directly with the device.”

That this happens in an increasingly screen-free environment will require creative solutions in order to unlock the commercial opportunities. Gartner has predicted that “by 2020, 30 percent of web browsing sessions will be done without a screen.”

Screen-less, voice-only platforms, will not only represent a very different way for consumers to find information online. They will also disrupt a number of traditional online advertising models too.

Looking ahead

This technology is still relatively nascent, but it’s playing out against a wider background whereby voice technology is becoming increasingly integrated into our lives. And, in case you’re not yet convinced that the voice market merits your attention, keep in mind that this trend is global and impacting devices of all kinds.

Alibaba sold 1 million Tmall Genie X1 smart speakers in the last four months of 2017, a device they plan to install in 100,000 Marriott hotel rooms across China. And closer to home, Roku TV’s will soon feature built in voice assistants, while Dish already allows you to search and surf for content using voice functionality in their TV remote control.  In the era of the Internet of Things, domestic appliances – such as those from Whirlpool –  can already be managed by Amazon Alexa and Google Assistant.

Undoubtedly, voice technology will become all-pervasive. In November, Amazon announced Alexa for Business, “a new service that enables businesses and organizations to bring Alexa into the workplace at scale.” This is just one way that voice-triggered activities – from search through to content discovery and shopping – will move out of the home and into the office and car.

Voice search and screen-less content consumption are areas that are already beginning to take off. And this trend will increasingly impact media and information habits in the future. As a result, understanding the potential – and pitfalls – of this technology is an area that brands and publishers need to be exploring, if they aren’t already.

Advertising | Featured Post | Innovation

How digital, streaming services are pushing linear TV to innovate

The idea that digital is the new TV is no longer just an idea, but a reality for many media consumers. A recent report from the measurement company Zenith predicts that next year will be the first year that internet usage globally will eclipse TV time; the same will be true in the U.S. by 2020.

However, that doesn’t mean linear TV — to pinpoint the old-fashioned kind of television programming long associated with the word “TV” — is heaving its last breath. Yes, scaling up against the tech behemoths like Google, Facebook, and Netflix, which are squeezing into the programming space, is a tall order. But linear TV companies can survive by accelerating innovation their own way. They must focus on targeted and addressable ads, emphasize brand safety, and become more like their streaming competition.

Deconstructing TV Advertising

Traditional 30-second commercials still have a place in U.S. television programming, particularly around high-profile events like the Super Bowl. However, alongside the growth of over-the-top television has been the tendency for people to skip over ads with the press of a button. As early as 2010, 86% of TV viewers skipped over ads while catching up on programming saved by their digital recorders. Streaming services such as Netflix and Amazon Prime Video are attractive in part because there is no advertising.

At least not in the form advertising blocks or commercial messages. But there is a less obvious form of advertising happening on streaming services more often than ever: the old-fashioned product placement. Whether show characters eat a certain kind of food or use a particular app, advertisers are working it to get their products written into storylines. KFC’s deal with Netflix to appear in “Stranger Things” is a clear example of product placement in action.

And the revenue makes the trend clear. While the actual number of product placements executed this year declined, the value of each integration has been increasing since 2009, according to Patrick Quinn, president of PQ Media. He predicts the U.S. product placement marketplace will exceed $10 billion this year, thanks largely to more valuable plot integrations — which, essentially, amounts to a more creative form of advertising. So, for linear TV to thrive, it will need to get even more clever with product placements and make them a bigger part of the mix.

Working the Data and Brand Safety

At the same time product placements are booming, and some advertisers are becoming less incentivized to spend money on the diminishing demographics tuning into traditional TV, digital has also had a leg up in another realm: targeted advertising. The wealth of data our digital footprints leave behind has made it easier to cater ads for the niche interests of an individual.

But that’s not to say there isn’t opportunity for cable providers to experiment with targeted ads as well; AT&T, for example, already sells addressable TV — the linear TV version of targeted advertising — through DirecTV, which it purchased a few years ago. With AT&T’s purchase of Time Warner finally approved, this is the chance for AT&T to up the ante and try to scale this up further. The telecom giant has already been working to build a team to focus on addressable ads.

Indeed, one of AT&T’s rationales when purchasing Time Warner was that it needed a bigger advertising platform to compete with the Facebook-Google duopoly. What it lacked prior to scale is what Time Warner can offer: inventory. The pool of content that Time Warner brings to AT&T’s ad platform gives it a fighting chance against Google’s dominant ad buying platform. While Google has had to deal with objectionable content appearing alongside adverts on YouTube, AT&T has the chance here to emphasize its brand safety. And that is what the company, and others, have been pointing out.

A (Realistic) Look to the Future

Still, even if addressable advertising presents a huge economic boost for linear TV — according to the investment bank Credit Suisse, it’s a potential $100 billion opportunity — that doesn’t mean anything AT&T wants to do will happen overnight. Aside from DirecTV and other apps in their own ecosystem, channels under the AT&T-Time Warner banner will have to work out deals with cable companies — which distribute the majority of Time Warner programs — if it wants to use AT&T’s data to beam ads to every house in the country.

While “audience-based” TV ad buying is growing, it’s still minuscule in comparison to traditional TV ads. It makes up only about 10 percent of total TV advertising, according to research from eMarketer. “In terms of the future, it continues to be much more of an addressable (data-driven digital) world as consumers go over-the-top, but that doesn’t mean traditional demographic targeting won’t still play a massive role in the TV advertising ecosystem,” Aleck Schleider, SVP of client and data strategy at the video advertising platform Videology, told Axios’ Sara Fischer. “Especially because the digital TV ad space is still so fragmented and demographic advertising is very unified.”

What’s more, it may very well be that TV commercials still have a future — but in a shorter form. A recent study by the Advertising Research Foundation found that six-second ads on broadcast and network TV capture more attention per second than standard 30-second commercials.

Bottom line: The best bet for linear TV companies is to forget about being linear TV companies and put digital innovation at the top of the priority list. Working toward quality addressable advertising is one way. So too is emphasizing the brand safety issues that tech giants are struggling with (while ensuring that there’s action behind the talk). And maybe the best bet is working to make advertising better, whether it’s with more creative ad integrations in network TV or shorter commercials to appeal to our ever-decreasing attention spans.

Featured Post | Perspectives

Once bitten: Comparing Apple and Facebook’s privacy policies

These days, it’s hard to trust any tech company with your personal data. Between hacking, leaks, misuse, and unfettered tracking, you can’t blame consumers for being more than a little wary. Sure, companies use our information for lots of reasons. However, when you compare two tech giants – Facebook and Apple – there are distinct differences in their approaches to collecting and using personal information. And the distinction says a lot about building a business model based on devouring data.

Their diverging approaches could be written off to business model differences. Facebook sells access to a massive data set to serve up ads to granular groups of people that meet advertising objectives. Apple’s goal is to sell hardware and use data to customize your experience. While plenty of people don’t trust either company, it is interesting and illuminating to contrast the two systems.

Right on Cue

Eddie Cue set out to do just that when he was interviewed by Dylan Byers on stage at South by Southwest in March. He sees a big difference between how his company approaches privacy and those from other companies like Facebook and Google because of what he sees as the fundamental difference in how they make money.

“We’re not collecting a ton of information about you, where you are, what you do, etc.. We are really not interested in it in most cases. When we do, we keep the minimal amount that we need in order to do exactly what we tell you we are going to do with it. We don’t make our money off of advertising,” Cue said in March.

Message Delivered

In a Fortune commentary from Alex Salkever that came out after news surfaced that Facebook had been scraping call and text history from users on Android phones, Salkever saw clear differences. And this was just one of many data privacy issues Facebook has faced this year. Salkever wrote:

Apple emphasized user privacy long before its rivals did. The company built end-to-end encryption into iMessage and FaceTime from their inception. Apple also makes it exceptionally easy to encrypt your entire hard drive; in fact, this is a core feature of the Mac laptop operating system. And Apple Pay is designed in way that really enhances privacy—by not storing actual credit card information on users’ phones or computers and instead using one-way encryption for payments.

Ben Goodman, vice president of Global strategy at identity management firm, ForgeRock sees Facebook as more like television network than a hardware company. He believes that this accounts for the differences in the way they approach privacy.

Getting Personal

“There is a misconception that Facebook is selling our personal data. In reality, Facebook is collecting data to enable high levels of personalization and targeting in advertising. When you view their data privacy through those lenses, it is easy to understand why Apple prioritizes privacy by not having personal information leaving the device; meanwhile, Facebook wants users to be comfortable with sharing as much personal data as possible,” Goodman said.

When Apple has run into problems it’s mostly when there is information being stored off-device as in the infamous iCloud celebrity hacks.

Certainly Facebook CEO Mark Zuckerberg acknowledged in his prepared statement before the U.S. Congress earlier this year that his company needed to be more careful with user data on the platform. ‘But it’s clear now that we didn’t do enough to prevent these tools from being used for harm as well. That goes for fake news, foreign interference in elections, and hate speech, as well as developers and data privacy,” he told Congress in April.

Privacy Please

That’s not to say that Apple doesn’t get questioned about its approach to privacy even as it tells people how much better it is. Cue’s boss Tim Cook was more than happy to dance on Facebook‘s misfortune when its privacy woes surfaced earlier this year. Cook said that what differentiated them from the others (besides what Cue had articulated at SxSW) was encryption, not allowing sensitive data to leave the device, and collecting less information than everyone else.

But when Apple released the iPhone X last year and with it brought 3D face recognition to the device, it did raise privacy concerns, especially since that was being shared with some third-party apps on-device. (How do you think you can make that personalized animated poop emoji?)

Then, at the most recent WWDC keynote, Apple introduced in-browser Safari tools to block Facebook tracking. Apple software executive Craig Federighi pointed out that Facebook Like buttons and comment fields on a web page can be used to track you whether you click on them or not. Starting in the next version of Safari, you can choose whether you want to allow that or not from a warning box that pops up whenever these entities are on a page you are viewing.

Just this week, the company updated its App Store guidelines in a move a Bloomberg report suggests could be directed at a Facebook book app called Onavo Protect. “The iPhone maker’s updated App Store Review Guidelines ban applications that “collect information about which other apps are installed on a user’s device for the purposes of analytics or advertising/ marketing.” This could give Apple grounds to remove the Onavo app, although the software is still available despite the rules kicking in last week,” according to the Bloomberg report.

Governing Privacy

Of course, GDPR is forcing everyone’s hand to at least some extent as the EU implements a new set of regulations designed to put the user in control of his or her own data. Other countries including the U.S. might not be far behind.

As Cue pointed out, attitudes have shifted about privacy, but Apple feels it was ahead of the curve. “If you look over the last 10 years, when we started talking about privacy and security and all these things, they weren’t top of mind, and in a way most people were [thinking] ‘Who cares?’ It wasn’t that important, but now people realize the importance of it and what the ramifications of it are,” he said.

And as consumers see how some companies have been misusing their data, they are beginning to compare the privacy records of the biggest tech players. And perhaps they are seeing that while none has a perfect record, they may not all be equally bad either. As consumers decide who to trust, who to do business with, and who to block, companies will need to do more than comply with regulation. They’ll need to develop a strategic approach to data, and business, that respects consumers’ privacy expectations.

Advertising | Featured Post | Perspectives

Facebook’s political ad disclosures are a train wreck in progress

As the midterm elections ramp up — and the foreign interference from Russian operatives during the 2016 election continues to haunt pseople — Google, Facebook and Twitter have all announced more stringent rules around online ad disclosures. And the Federal Election Commission too is seeking public input on a proposal that would expand political ad disclosure rules for other media to mobile apps.

So far, though, the disclosure rules at Facebook are not just a work in progress, but more of a train wreck in progress, as flaws with Facebook’s new rules are already emerging. The social giant was supposed to archive all political ads publicly but missed some, and critics have complained that they aren’t giving enough information about how the ads are targeted. And so many publishers are getting caught up in the rules and can’t boost their own political stories on Facebook without jumping through hoops. An effort by the News Media Alliance to get publishers whitelisted has started, but so far Facebook doesn’t have plans to do that.

It’s clear that more overarching, consistent rules across social media and the web — not just from Facebook and other tech giants — are needed to monitor political ads on the internet.

Facebook’s New Rules – And More Hiccups

In May, Facebook launched its ad transparency tool in the U.S., which requires ad purchasers on Facebook and Instagram to reveal and verify their identities and locations. Upon verification, those ads — whether for candidates or political issues — must come with a “paid for by” label disclosing who paid for the ad. Anyone on Facebook can now also search for any of these ads for up to seven years in an online database the company set up.

Almost immediately, the new rules caused hiccups. In California, at least one progressive group was able to continue targeting local voters with negative campaign ads about a candidate without disclosing who was behind the campaign. In Florida, ads for more than a dozen political candidates and organizations — which had cleared previous disclaimer requirements — were shut down because they didn’t reveal who paid for them. This resulted in a loss of thousands of dollars for campaigners already in full election swing mode. Facebook’s new tool also saw an article’s link to a Breitbart piece as a red flag. The article was immediately shut down — even though linking to Breitbart was actually part of a broader initiative to correct partisan propaganda, not spread it.

Meanwhile, the Florida Department of Highway Safety and Motor Vehicles had its safety ads caught up in the terms of the new rules, even though it’s running public service announcements. And certain loopholes allow one person to go through Facebook’s verification process and then give the reins for an account to someone else.

What’s more, Facebook needs to negotiate with unique local transparency laws at the same time it’s trying to implement these rules nationwide and eventually globally. Failure to do so means the social giant is actually violating local laws with these new ad disclosures — which is precisely what’s happening now in Seattle and Washington state, which is now suing Facebook and Google for violating those laws.

Do the Rules Go Far Enough?

While there are obvious problems out of the gate, there are also some important missing elements to Facebook’s rules.

Facebook’s new database is missing ads it should obviously catch, as ProPublica’s Jeremy Merrill, Ariana Tobin and Madeleine Varner have reported. But more strikingly, Facebook is also not revealing a critical piece of information that’s been a contentious force in past advertising: how the ads are being targeted. ProPublica previously found, for example, that certain housing ads on Facebook were made to exclude African Americans and other “multicultural affinities” from seeing them, which violates Fair Housing Act protections.

In response, ProPublica is building an independent database of political ads to monitor Facebook’s efforts.

Publishers Struggle

While certain roadblocks are to be expected in the process of setting things up, publishers have to be especially alert to Facebook’s new rules. The definition of “ads with political content” is “astonishingly broad and may affect any promoted content that relates even vaguely to the political system,”  said Ned Berke, program director of audience development at the Center for Cooperative Media at Montclair State University.

Here are some particular points publishers should keep in mind to avoid scuffles, according to Berke:

  • get authorized;
  • bookmark the 20 issues of public importance Facebook has outlined;
  • modify ads that started running before May 24 — before Facebook’s new terms launched — so they have the required disclaimers;
  • watch out for the keywords that could trigger Facebook’s machine-learning classifier.

Many angry smaller publishers have decided not to boost posts or run Facebook ads until the social giant makes it easier for them to get verified or starts a whitelisting regime so they can promote their journalism covering politics.

Self-Regulation?

While the FEC is currently waiting on public comment for its proposal of new disclaimer rules for online political ads, the Digital Advertising Alliance is advocating for more self-regulation that could potentially work in conjunction with the FEC’s proposal. The DAA hopes to create new “Political Ad” icons that would link back to sites disclosing the identity and contact information of advertisers. It would be comparable to the DAA’s AdChoices, an icon that informs consumers of tracking data and gives them the option of opting out of behaviorally targeted ads.

Like the FEC’s proposal, it’s unlikely the DAA’s suggested political ad icon could come out in time for this year’s midterm elections. But the broader point is that we need more compliances on a federal and organizational level aside from just companies making their own rules for their platforms. The Honest Ads Act, which would bring online advertising disclosures on par with television ads, is another push in this direction, though the bill hasn’t gone far in the current Congress.

The Good, The Bad, The Hopeful

Facebook knows it may not catch all ads and has welcomed feedback on actors that appear to be trying to game the system. It’s also stated that political ads will be subject to human review on top of the machine-learning classifiers. The company is also in talks with groups, including news publishers, about how the authorizing, labeling and archiving of political content will affect them. However, the specifics for how publishers can avoid being bogged down in disclosures that may affect their online presence have yet to be announced.

Still, the ad tool and the database are currently confined to the U.S. And in countries like Sri Lanka, Facebook has already proved to be the gasoline that ignites political wars on social media. While the company maintains it’s committed to expanding these initiatives internationally, there’s still a long way to go. While the hope is that things will improve over time, Facebook needs to tread with care and get this balancing act right to make sure trusted publishers can promote their important political coverage. Let’s also hope oversight from independent groups and government regulators comes through as well.

Advertising | Featured Post | Perspectives

Being big and behaving badly

On a panel a few weeks ago, Makan Delrahim, a top antitrust official at the Department of Justice, said that “Being big is not a violation of antitrust policy. Being big and behaving badly is a problem.”  

We’ve established without debate that Facebook, Apple, Amazon, and Google are big. As their Q1 earnings showed, they’re extraordinarily big. Rockefeller big. Carnegie big. But how have they been behaving? Rather than make any assumptions, I went to Twitter knowing many of my followers work in the press, inside the beltway, or across our industry and are very close to the behavior of the tech giants.  

The results were surprising to me. Not because Facebook came out on top. But that one out of three voters chose Google over Facebook. (Apple and Amazon didn’t even come close.) 

I thought it was worth examining the parallel paths of these two “winners,” to consider some facts that may not be on everyone’s radar.  

Facebook and Cambridge Analytica

Everyone has had their punch lines about the ineffective ten hours of United States Congressional hearings with Mark Zuckerberg in Washington last month. We can add this week’s meeting in Brussels to the joke. But not everyone has been paying attention to the work being done by the UK Digital, Culture and Sports Committee, which has been digging into the case for nearly 18 months and asking really smart questions. Here are a few facts established as of today. I’ll let you read through them and determine who is behaving badly: 

  • Last month, Facebook disclosed that up to 87 million Facebook users’ data was harvested in 2014 by GSR and then sold to infamous Cambridge Analytica (now being dissolved). These disclosures were made after joint reporting by The Guardian and The New York Times, and after legal threats by Facebook were reported by The Guardian. Facebook later admitted these warnings were not their wisest move and offered an apology.  
  • Facebook has refused to clarify exactly when Mark Zuckerberg or Sheryl Sandberg first became aware of GSR or Cambridge Analytica. Though The Guardian first reported on both companies in a report on December 11, 2015 and a Guardian reporter started asking questions in December 2014. 
  • GSR was launched and run by two “equal partners,“Joseph Chancellor and Dr. Aleksandr Kogan. 
  • It was recently disclosed that Facebook signed a confidentiality agreement with Kogan. This confidentiality agreement was signed by Kogan and an undisclosed Facebook executive on June 24, 2016. (Interestingly, this was the date results of the vote on the Brexit referendum were announced.)  
  • Lesser known fact: In November 2015, Facebook hired Chancellor and he signed a confidentiality agreement as an employee of Facebook. Yes, Facebook hired someone who participated equally in what Facebook characterized to The New York Times as a scam and a fraud. 
  • This leaves us with a minimum of 27 months (December 2015 through March 2018) and a maximum of 39 months (December 2014) in which Facebook was aware of the records being harvested and sold to Cambridge Analytica. Yet, they’re still not sufficiently answering questions about the matter.  
What is next here:  

The emerging pattern appears to be a massive cover-up. So far, despite a threat of future arrest, Mark Zuckerberg has refused to give testimony in the UK where the toughest questions will be asked. The Federal Trade Commission is investigating the issue raised by Senator Kamala Harris’s questions about who made the decision and why Facebook didn’t inform its users back in 2015 when they knew the “fraud and scam.” Being big and behaving badly.  

Google and GDPR

For a while now, DCN has been analyzing, advocating, and lobbying on GDPR, which will come in to enforcement this Friday, May 25th in the European Union. The law, which applies to data collection of EU residents, was approved in April 2016 so it’s anything but new at this point. However, despite DCN and publishers inquiring for many, many months, we only found out what Google was up to in the 23rd month of the two-year grace period. And then only after the Wall Street Journal scooped Google on their plans. (Un)fortunately, this news happened in the same week the Facebook and Cambridge Analytica news was breaking so its plan didn’t get the attention it deserved. And to be clear: Google’s plans are fairly offensive. 

Google’s Privileged Position

Let’s take a step back and look at how Google operates as a privileged platform in the advertising marketplace where they can set the rules of the game while also playing and winning the game. What gives Google the most leverage is its market power and unprecedented amount of data collection in this market (all estimates courtesy of Arete Research).  

  • Google DBM (their advertising bidding solution on the demand side) has $1.7B net revenue vs Google’s nearest peer (The Trade Desk) at $308 million. MediaMath is in third place at around $220 million. 
  • Google DoubleClick AdX (their exchange sitting in the middle) has $1.9B revenue vs nearest peer at $155 million. 
  • Google DFP (their solution on the supply side) has $700 million net revenue vs nearest peer with significantly less. 
  • Google’s measurement/attribution solution has $600 million net revenue vs nearest peer at under $100 million. 

In other words, Google is 5-10x its nearest competitor in every stage of the digital advertising supply chain — where Google both creates the market and makes the market. So, the question becomes what is Google’s responsibility in rolling out the GDPR, the most significant data protection law in history? We know our members depend on Google for nearly every component of their advertising revenues (which drive on average 80% of our members’ overall revenues.) It’s a simple fact that nearly every one of DCN’s members use Google DFP as their ad server.   

The Monopolist Move

So DCN was rightly concerned by Google’s vague policy updates where they attempted to retain all of the rights to the data harvested by each and every one of Google’s ad services without details in how they would use this data. And that they did this while the risk was being assigned to the publishers was, as I previously said, fairly offensive. They might as well don a top hat and cane.  It’s the move of a monopolist.  

Taking on Google regarding their policies in protecting one of their most treasured assets, their data collection, isn’t for the faint of heart. So, we worked with three other major global trade bodies representing more than 4,000 publishers and sent a letter of concern to Google CEO, Sundar Pichai. In the month since we’ve sent this letter, Google has continued to set up private meetings with publishers. However, we’ve consistently been told Google is unwilling to commit to the necessary terms for publishers and when they even begin to approach something workable, they will not put anything in writing.  

Hence the open public letter by DCN with our seven key questions. 

We’ve found it unfortunate that Google has refused to answer our questions and has since moved on to public relations tactics including organizing a “collaboration meeting” on May 24th — the last day before GDPR enforcement begins. We took the counsel of the other associations, their members and the legal and legislative experts across our DCN membership and declined Google’s invitation for a private, off-the-record event. 

What is next here:  

At this point, it’s unequivocal that Google has strategically waited until the final months with the goal of protecting its own interests. This serves to push the market towards systems orchestrated by Google and the trade bodies that represent it and protect its interests above the interests of the public and the publishers. Again, given the dominance of Google throughout the digital advertising supply chain, publishers don’t have a reasonable choice to not sign Google’s terms and essentially shut down advertising revenue on May 25.  

The key question will be whether Google and its trade bodies roll the EU regulators. It’s worth noting Facebook’s troubles and a high-profile 60 Minutes report on Google last Sunday won’t help their cause.  Being big and behaving badly. 

When I do the math on these companies’ actions, they both add up to being big and behaving badly. And that’s a big problem. Being big is not inherently bad. Power can — and should — be used for good. But with great power comes great responsibility. And these are not the actions of responsible companies.  

Featured Post | Innovation

7 reasons you should pay attention to podcasting

“Wayne’s World for Radio.” That’s one of the ways in which Steve Jobs described podcasting in 2005. That was the same year that Apple put podcasts on iTunes and The New Oxford American Dictionary named “podcast” its word of the year.

Citing low barriers to entry, Jobs observed how “anyone can make a podcast … and get a worldwide audience… We see it as the hottest thing going in radio,” he added.

Thirteen years ago, there may have been an element of hyperbole in that assertion, but it’s certainly true now. The so called “Serial Effect” – named after the phenomenally popular 2014 series has enjoyed more than 175 million downloads. Its success sparked new levels of interest in the genre, and is often seen as the catalyst for a new golden age of podcasting.

Great storytelling is only part of the story. Podcasting has growing interest from advertisers and brands, technological advances that make it easier than ever to listen, and increased consumer awareness of this medium. These forces have coalesced to help take podcasting to the next level.

Here are seven reasons you should be paying attention to podcasting’s growth:

1. If content is king, audiophiles are spoilt for choice

Anyone can create a podcast. As a result, the genre is home to everything from time-shifted radio broadcasts (from the likes of NPR, the BBC et al), through to content from publishers not traditionally associated with audio (like Trinity Mirror and the New York Times). And many others have jumped on board from students, stand-up comics, Hollywood celebrities like Alec Baldwin and Anna Faris. (Heck, I even produce one for my J-School.)

By March 2018, Apple Podcasts passed 50 billion all-time episode downloads and streams.

Fast Company, citing Apple’s own data noted, how iTunes alone is now “home to over 525,000 active shows, with more than 18.5 million episodes available, including content in over 100 languages.”

2. Podcast listeners are a growing – and attractive – audience

It’s estimated that 73 million Americans, listen to podcasts each month. That’s akin to 26% of the population aged 12+ (up from 12% just five years ago).

Typically, podcast listeners tend to skew younger, are more likely to have a college degree and have higher than average household incomes, according the annual report from Edison Research on podcast listeners, published last month, reinforcing 2017 findings from Nielsen.

Nielsen has also highlighted – in a quarterly podcasting insight guide for marketers – how “as the audience for podcasting grows larger each year, it also grows more diverse.”

“In 2010,” they wrote, “ethnic audience represented less than 30% of all people who said they listened to a podcast in the past 30 days. In 2016, the share of listening from this segment stands at 36% of the total.”

3. Podcast fans really love the medium and listen a lot

Diving deeper into Edison’s data reveals the extent to which podcast fans truly embrace this audio format. (A trend also apparent in their previous annual surveys.)

Although the number of weekly podcast listeners drops to 17% of the US population (from 26% who listen at least once a month), this group typically listens to 6 hours and 37 minutes of podcasts each week; with 17% of this cohort listening for 10 hours or more.

On average weekly podcast listeners consume seven podcasts a week. Their passion for this type of content is such that podcasting accounts for a third of all audio listening that they do.

4. Advertisers and Brands are waking up to podcasting’s possibilities

U.S. podcast advertising revenues were forecast to top more than $220 million in 2017. That means it is up 85% from 2016 – where the market was worth $119 million – according to a 2017 Podcast Advertising Revenue Study from the Interactive Advertising Bureau (IAB) and PwC.

Within this, dynamically inserted ads are on the rise, accounting for 56% of podcasting ad spend in 2016, up from 37% in 2015.

As reporting metrics continue to improve, (one high profile example of this is Apple’s podcasting analytics service which launched in Beta form at the end of 2017) Lex Friedman chief revenue officer at Midroll predicted that “by the end of 2018, we’ll be able to sell on a listen basis.” He added, “At the end of 2018 none of the objections we get from brands will be based on measurement.”

5. New revenue streams are emerging

The financial potential for some media companies in the podcasting arena is perhaps best exemplified by Slate. In January, they revealed that podcasts now account for 25% of their revenue.

As well as growing their podcasting team, Slate also offers exclusive (and ad free) podcast content to people signed up to their Slate Plus membership program. The New York Times recently did something similar with their new Caliphate podcast, previewing it to subscribers before it was made available to everyone.

Gimlet Media, a digital media company and podcast network that’s also based in New York, previously raised $6 million in Series A funding as part of a $30 million valuation. And in a super smart move, the story of Gimlet’s early days was captured by their popular StartUp podcast, the first season of which documented how the company was founded.

Meanwhile, brands and content creators are also embracing the possibilities of having audiences pay for shows. Marvel has launched a scripted podcast, Wolverine: The Long Night, you have to be a premium member of the Stitcher platform ($4.99 a month or c.$35 a year) to access it. And Portland based journalist Corey Pein offers a weekly members only version of his “News from Nowhere” podcast.

Historically, both media and non-media brands like Slack and Red Bull  have used podcasts to build a “deeper connection” with their audiences and enhance their brand. GE (General Electric) sponsored the mystery series The Message. However, these efforts have typically been free.

6. Hollywood / TV waking up to it

Alongside a recognition that some audiences – both niche and mainstream – are willing to pay for high quality audio content, the creativity and reach of the medium is also attracting the attention of other media channels. A key trend to watch in 2018, as Variety has identified, is the potentially fertile territory podcasts offer for TV and Film companies.

“Last Halloween,” they wrote, “Amazon released “Lore,” based on the hit podcast by Aaron Mahnke about historical, supernatural tales. The digital giant has also ordered two seasons of “Homecoming,” a political thriller produced by Sam Esmail (“Mr. Robot”) that will star Julia Roberts. “Alex, Inc.” a workplace comedy starring Zach Braff, will debut on ABC this spring; it’s based on “Startup,” a podcast that chronicled the rise of Gimlet Media, one of the most prolific companies making podcasts.”

“And on the film side,” they add, “Annapurna Pictures has optioned an episode of “Reply All” for a feature directed by Richard Linklater and starring Robert Downey, Jr.

7. Tech’s new frontier – smart speakers

Many of podcasting’s great leaps forward have been as a result of technological innovations. (This interactive timeline from late 2015 showcases many of these.)

Innovations have included the creation of a dedicated section on iTunes in 2005, smartphone take-up, the creation of a standalone iOS podcasting app in 2012, and the increased ease of playing content from your phone in the car. Jump forward to 2018, and the rise of smart speakers is having an early impact on podcast listening.

Last summer, the annual Digital News Report, from the Reuters Institute for the Study of Journalism at Oxford University, demonstrated the early potential for services like Amazon Echo and Google Home, which voice controlled digital assistants being used for breaking news by CNN, and other publishers such as the Wall Street Journal, BBC World Service, and German media organizations Spiegel and Bild.

“Today, 18% of Americans 12+ (an estimated 51 million people), live in households that have at least one Smart Speaker,” Edison Research said in March. “This means that Smart Speaker ownership has more than doubled from 7% just one year ago, which shows Smart Speaker adoption at a faster rate than the early days of the smartphone, which showed only 4% growth in a comparable timeframe.

What happens next?

There were just 8,000 known shows when Steve Jobs talked about podcasting at the 2005 Apple Worldwide Developers Conference (WWDC). At the time, monetization opportunities were typically limited to baked in ads and presenter reads. Since then, podcasting has witnessed phenomenal growth. User numbers, advertising dollars, and the sheer number of shows, are all at record highs.

The emergence of connected cars, new in-car dashboards, the continued rise of smart speakers and Google’s new podcasting strategy (explored in a five part series last month by podcast makers Pacific Content) will encourage further opportunities for growth. Particularly as podcasts begin to appear in our search results and opportunities for listening across different devices and contexts (e.g. in-home, in-car and on the move) becomes increasingly seamless. As a result, expect to see more brands, media and tech companies, as well as marketers experimenting with this space in 2018.

Podcasting’s golden era has only just begun. There are opportunities for sponsorships, subscriptions, brand extensions, and live events. Needless to say ,that not everyone will be able to leverage these opportunities. The podcasting space is already crowded and it’s growing and becoming more competitive. Standing out from the crowd, as with any market, is a key challenge when it comes to both reach and monetization. There’s no cookie cutter model for success, but there are already plenty of terrific examples out there that highlight the myriad of different podcasting paths that marketers, brands and media companies can explore.

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