First of all, apologies. I dedicated far too much of Tuesday’s newsletter to Audible, so much so that I missed a really big development that was announced on Monday: Veritone One, the performance-based media agency with considerable operations for both podcasting and radio channels, has signed an agreement where it will acquire Performance Bridge, the direct response agency with a particularly strong podcasting channel.
Some useful details:
- According to the accompanying press release, Performance Bridge enjoyed net revenues of about $3.7 million in 2017.
- The deal will see $6 million change hands, plus a contingent earn-out of up to $5.0 million based on Performance Bridge’s… uh, performance.
- The acquisition is expected to close over the next few days, and its conclusion is said to increase Veritone One’s podcast advertising market share up to 25%.
Here’s why this is interesting:
- Media agencies like Performance Bridge and Veritone One play an important role in the podcast advertising economy in that they function as an efficiency and performance management layer between advertisers and podcast publishers/networks. If, say, you were a Brand looking to test or commit some amount of your advertising budget to podcasting, you could go straight to a podcast or a podcast network — or you could go to a company like Performance Bridge to spread the money around a number of different channels, including podcasting, and outsource the work of figuring out the effectiveness of different shows/networks.
- That Veritone One is acquiring Performance Bridge is particularly interesting because the combined entity could stand to challenge AdResults Media, which many in the podcast industry believe has become a disproportionately powerful entity in the podcast advertising ecosystem. Exact numbers for AdResult’s current podcast advertising market share is a little hard to pin down with confidence, varying between 35% (per this 2018 AdWeek article) and 40% (per Audioboom’s content marketing blog). I’ve heard some podcast executives believing the share to be significantly bigger than that.
- Some podcast executives I spoke to expressed cautious optimism about the development, believing the acquisition to theoretically introduce more solid competition against Ad Results Media.
Here’s the takeaway, in a nutshell: Podcast advertising, while growing, still remains a pretty small world, and there’s a general uneasiness around the possibility of a monopoly at this stage of the market’s development. It’s consolidation, sure, but maybe a potential duopoly is better than an all-but-certain monopoly?