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Looming Giants and Narrative Control

You might have heard that iHeartMedia, the bankruptcy-fighting broadcast radio giant and podcast upstart, is preparing for a possible IPO in a bid to raise funds to continue paying off its debts. The New York Times report on the matter kicked off with this big lede: “Is there room for radio in the age of Spotify?”

Of course, the answer is probably no, not by itself. Which is why, sorting through iHeartMedia’s S-1 filing, you’ll find increased emphasis on emerging arms within the organization’s audio advertising business, including and perhaps especially podcasting. Indeed, in the document, the company aggressively positions itself as the market leader in “commercial podcasting” — a category utilized to make itself distinct from public radio organizations like NPR, which at this point in time delivers a slightly bigger unique US audiences (and slightly lower global audiences) with vastly smaller portfolio of shows.

Here are a few key lines from the document that helps us grasp the story iHeartMedia is trying to tell:

  • “We are the number one commercial podcast publisher in America — and we are almost three times the size of the next largest commercial podcaster as measured by downloads, according to Podtrac.”
  • “We believe that podcasting is to talk what streaming is to music and is the next strategic audio platform. Our podcasting platform will allow us to capture incremental revenue as well as extend station brands, personalities and events onto a new platform — ultimately extending and deepening our consumer relationships and our opportunities for additional advertising revenue.”
  • “iHeart is distinguished among podcast publishers by our unique ability to both promote and air our podcasts on broadcast radio, and combine podcast advertising with broadcast advertising to give additional power to advertising messages.”
Long-time readers probably know the qualifiers I’m about to recite: that Podtrac is an incomplete ranker though nonetheless a popular ingredient when it comes to public narrative creation, that the ability of broadcast radio messaging to drive new podcast audiences remains theoretical and unproven, that there’s an element of smashing a round peg into a square hole at the heart of all this.

But iHeartMedia’s narrative creation is not what I’d like to focus on today. Instead, I’d like to highlight a probable future which comes in the form of this question: how will iHeartMedia’s increasing participation in podcast advertising — which will likely involve, in large part, the leveraging of its own existing relationships and broadcast advertising assets in sales packages — impact the broader conventions, expectations, and conduct of how podcast advertising is currently sold? To phrase the question more simply: how will iHeartMedia change the story of podcast advertising?

The relevant chunk in the S-1: “By adding other high CPM platforms into our mix, as well as providing unique and differentiated solutions for advertisers, we believe that we have the potential to see a CPM uplift. Although our primary focus is revenue, we also aim to maximize the value of our inventory. Moreover, we are continuing to develop platforms (including podcasts) that independently garner superior CPMs.”

I wouldn’t only look at iHeartMedia on this notion. The other probable major change agent in podcast advertising conduct is, well, Spotify, which is angling to drive a sizable chunk of podcast listening in the future — and is backed by some data that suggests it will probably do so. (See Infinite Dial 2019, slide 52.) Here’s the big question: if and when Spotify crosses a certain threshold in driving overall podcast listening, to what extent will it command the conventions, expectations, and conduct of all podcast advertising? Assuming, of course, that they flip on an in-platform advertising switch, which, I mean, come on.

Anyway, all of this is to say: the rest of the advertising-driven podcast ecosystem would probably want to get its ducks in order around metrics, standardization, and ad verification sometime soon if they’d like to collectively maintain control their own advertising narrative.