Welcome to Unmade, mostly written on Wednesday on a crisp, bright day at Sisters Beach, Tasmania, and completed on an even crisper, brighter morning.

Reminder: Unmade’s paying supporters receive this email before everyone else. It’s just one benefit of backing independent journalism.

Before I get to today’s topic - an in depth exploration of what we known about the state of Australian podcasting - a quick digression.

Yesterday, when I popped into my local Woolworths, I eavesdropped on an older couple discussing the cost of a leg of lamb. After talking it over, they decided to leave it. My guess is that it was typical of conversations happening in every supermarket in the country, as consumers weight up what they can - and, more to the point - can’t afford.

For a while, I’ve been keeping track of the cost of living by watching the best price per 100g of Heinz Baked Beans. Just before I left for my recent trip to the UK, it was 45c. Today it was 58c. That’s an increase of almost a third, in the space of just a few months, for one of the cheapest staples.

This week Roy Morgan Research revealed that consumer confidence has dropped to its lowest level for several years, apart from at the height of the pandemic.

Only 10% of those surveyed expected “good times” for the economy. And 30% said they expected “bad times”.

Mortgage repayments are going up. On Tuesday, the minutes of the Reserve Bank’s May meeting, revealed that there probably will be another rise in June, and more after that. Yesterday’s release of the Wage Price Index for March revealed that wages grew by an annualised 2.4%, despite the the cost of living growing more than twice as fast at 5.1%.

It’s micro and macro.

Last night, it was reported that one of Australia’s biggest house builders, Metricon, is on the brink of collapse. And this morning. we woke to news of major falls on the US sharemarkets overnight. The AFR is predicting a plunge on the ASX when it opens this morning.

Bad times ahead indeed. Things are going downhill, fast, and with a likely bigger impact on consumer spending than even the GFC.

Cost of living is going to be the marketing theme of the coming months. So it’s a good moment to remind you that Unmade’s first event takes place in Sydney next Tuesday evening at Forresters in Surry Hills.

The topic is Marketing in a Cost of Living Crisis. Tickets are $69, or just $10 for Unmade’s paying subscribers. It’s a great panel. You can find out all the details here.

It’s not a big venue, so it’s likely we’ll have to stop selling tickets in the next few days.

If you work in the communications industry is it a conversation you can afford to ignore?

Do the podcast numbers add up?

When a new media segment is breaking through, the data can be a little hard to come by. In the early stages, even when growing fast, the actual numbers sound unimpressive. That’s not helpful in encouraging advertisers to jump on board.

Stakeholders prefer to talk in terms of percentage growth, which can sound more impressive than actual, specific metrics, when that growth is off a low base.

Yet at some point, if you want to demonstrate you’re reaching critical mass, and have something advertisers can trust, you’ve got to jump.

I suspect that’s why it was only last September that the Australian radio industry finally began to share actual download and listener numbers in its podcast data, rather than merely ranking them.

Unmade - media & marketing through an Aussie lens

Finally, some Australian data on podcasts - but beware of what counts as a 'listener'

Welcome to Unmade, mostly written on a chilly Tuesday evening at Sisters Beach, Tasmania, and polished off on a frosty Wednesday morning. There were more whales off the beach yesterday, apparently. Truth be told, I stood on the deck with my binoculars for a few minutes without spotting anything, then gave up and went back to my desk…

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9 months ago · 1 like · Tim Burrowes

This week, ARN’s iHeart put out one of those percentage-based press releases. Year-on-year, advertising spend on podcasts has grown 52% said the announcement, which was from data provided by analytics platform Magellan AI.

The methodology - which was based on Magellan’s robots listening to the top 400 podcasts to sample what advertising was being inserted - has its limitations. It can’t know what was paid for the ad. And when ad breaks are programatically inserted, different listeners to the same podcast would receive different messages.

But it’s better than nothing. It went for ranking, rather than spend. The top advertiser for the quarter was monday.com, said the research, followed by DoorDash, Telstra and then streaming service Acorn TV (hmm).

1. monday.com

2. DoorDash

3. Telstra

4. Acorn TV

5. Amazon

6. ShopBack

7. Sleeping Duck

8. Macquarie Bank

9. Ecosa

10. Peters Ice Cream

11. AAMI

12. BetterHelp

13. Mercedes Benz

14. Officeworks

15. Optus

There is a (little) more data out there on podcast adspend if you look for it.

Podcast ad spend

Standard Media Index, which monitors how the media agencies buy advertising on behalf of clients, calculates that in the first quarter of the year, adspend directly with the podcast players (as opposed to the more widely based audio companies) was about $4m.

Additionally, SMI saw digital ad format bookings (which on top of podcasts also includes advertising spending on radio websites, along with music streamers like Spotify and YouTube music etc) rise to $13.5m, which was up 80% year on year.

It’s probably reasonable to assume that most advertising revenue for podcasts is flowing in via the media agencies. Podcasts are not a platform that yet easily lend themselves to direct clients, at scale.

I’m guessing that half of those digital ad format bookings with the audio companies is targeted at podcast listeners (and that’s being generous), so we might be seeing about $10-11m per quarter coming in from the media agencies. Which might equate to $3.5m per month of agency spend on podcasts.

In the scheme of things, that’s small. You can see why they’re focusing on percentages.

The dollars (eventually) follow the audience. Let’s turn to the Podcast Ranker, which is released monthly by Triton Digital and endorsed and promoted by industry body Commercial Radio Australia.

Looking at the Australian Podcast Ranker’s monthly numbers for March (I’ll go back to March because those SMI and Magellan numbers are both for the first quarter), the top 15 publishers covered by the ranker delivered about 64m downloads between them.

If there was one ad per podcast (and of course in most cases there are more) that $3.5m spread across 64m downloads suggests, on average, a cost per ad of 5.5c. Or to put it in CPM terms, $55.

That $55 CPM goes down of course, once we take into account that the Australian Podcast ranker does not by any means cover every podcast player, and, as I say, when there’s more than one ad per podcast.

The ranker - which only reveals the top 150 - is also beginning to give pointers about the long tail. A few podcasts get big downloads.

In March, for instance, Hamish & Andy (the top podcast that month) delivered 2.3m downloads for Southern Cross Austereo’s Listnr platform. At a $55 CPM, that would be $124,000 revenue per month, or $1.5m per year. Must be nice.

But at the bottom end of the ranker comes the podcast version of the Sky News Outsiders show, with just 29,441 streams per month. On a $55 CPM, that would be worth a not-very-impressive $1,600 per month.

There are plenty of podcasts with smaller audiences, by the way - but as I say, the ranker only covers the top 150 Australian-made shows.

This is where the long tail comes in. Many of the shows can only be monetised programatically, or in the cases of the radio companies, as an add-on to a wider show sponsorship. Otherwise, their listener numbers would be too low to justify specific ad spend or sponsorship for a particular podcast, unless it has a highly desirable audience for advertisers.

Repurposing radio content

Although one might assume that Australian radio shows would automatically do well on podcast given the big name talent involved, for the most part that’s not true. Many do not even make the top 150, which implies they’re doing less than 30,000 streams per month.

One of the industry’s unspoken secrets is that there are a lot of podcasts being put out by the big players that have hardly any listeners.

But let’s do some digging into the differences between the impact of radio shows on air, versus on podcast platforms.

We’ll be contrasting Australian Podcast Ranker numbers with the GfK radio ratings survey (pedants please note: I said “contrasting”, not “comparing”; the methodologies of the two metrics are different). The most recent available radio ratings covered February and March, so again we’ll also use the March Australian Podcast Ranker data, although April’s has since been released.

Let’s start with Sydney’s top FM radio show. ARN’s Kyle & Jackie O Show was third overall in the podcast ranker, with 732,000 monthly listeners and 2.6m downloads. The download number is higher than the listener number by the way, because most listeners download multiple episodes of a show each month. The ranking order is based on monthly listeners though, not on the overall number of downloads because some shows got in the habit of posting multiple short episodes per day, to try to game the system.

But - as is so often the case with Kyle Sandilands and Jackie Henderson, they are the exception. You need to go all the way down to number 21 to find another radio show in the podcast chart. And that’s not what you’d expect; it’s Triple M Melbourne’s Rush Hour with JB and Billy, featuring James Brayshaw and Billy Brownless.

You’ll have to hunt around for the other big FM shows.

For instance, the companion podcast to Sydney’s second biggest FM commercial show, Jonesy & Amanda’s Jamcast, is all the way down at 78, with just over 51,000 monthly listeners. Those are relatively small numbers compared to the breakfast show’s weekly cumulative audience of 415,000

The next biggest FM commercial breakfast show in Sydney is Fitzy & Wippa, on Nova, with a weekly cume of 492,000, but monthly podcast listeners of just 41,000.

Meanwhile, the Morning Crew, on 2DayFM had a cumulative radio audience of just 295,000. But they did better than Fitzy & Wippa, with 77,000 monthly podcast listeners.

Of course, it’s worth bearing in mind the cumulative radio numbers above are all just for the Sydney audience, while the podcast numbers are national. I wonder if Melbourne-based Dave Hughes fans are helping The Morning Crew podcast figures a little.

One implication of the numbers is that simply repacking radio content does not equate to big podcast audiences. Fair enough. Die hard fans in the correct city might have listened live. Typically, an FM breakfast show’s monthly listener number on the ranker seems to be between five and ten per cent of its cumulative audience number in the radio ratings.

Repeating the exercise in Melbourne, the number one FM breakfast show is Christian O’Connell on Gold 104.3, with a cume of 538,000. Yet his podcast only has 24,000 monthly listeners.

That’s typical for Melbourne though. Fox FM’s Fifi, Fev & Nick have a radio cume of 589,000 and monthly podcast listeners of just 55,000.

Indeed, the best performing Melbourne FM breakfast show in the ranker is Triple M’s Marty Sheargold, with 130,000 podcast listeners. That’s just under a half of his radio show’s weekly cumulative reach in Melbourne of 254,000.

Familiar to national audiences thanks to his previous stint in Nova’s national drive show, those podcast numbers suggest there are listeners outside Melbourne who are missing Sheargold.

Should Hughes and Sheargold swap their seats? The podcast data might suggest that.

Once you think more about the data, there are more implications.

For one thing, the major platforms are repping a lot of shows with podcast audiences so small, they don’t even make it onto the publicly available ranker.

For those sort of shows, that only stacks up financially as repurposed content, with the ads sold programatically.

And it’s not a great story for audio company share market valuations. At least some of the market capitalisation of Southern Cross Austereo ($400m) and ARN’s parent HT&E ($500m) is based on them having a growth story in streaming to counteract the slow fade of broadcast.

Yet ARN’s 18.9m monthly downloads would equate to just $1m per month, based on that $55 CPM. And SCA’s Listnr would see $600,000 per month for its 11m downloads. Costs of producing all of that as original content would far exceed that.

So it comes down to the big sales teams. I suspect they’re outperforming those numbers, by selling ads as part of larger packages.

Podcasting is a wonderful medium. So far, it’s been mostly left out of the attention economy bandwagon because it’s hard to measure listening attentivity compared to eye tracking. Instinct tells me that podcast listeners are worth more than the radio equivalent, but how do you turn that into a sales story?

The more one digs into the cold, hard numbers, the more obvious it becomes that monetising podcasts is going to be a cold, hard slog.

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Time to let you go about your day. As ever, I welcome your thoughts to letters@unmade.media.

Have a great Thursday.

Toodlepip

Tim Burrowes

Unmade