“The simultaneous reach that you get on radio stations and simultaneous mass reach, particularly localized, is a pretty good deal for an advertiser,” Garber said.
Beyond that, some advertisers want to be able to track ratings, which they can do and do quickly with radio ads.
On the other hand, podcast ads might hit a more targeted audience. An advertiser whose products tend to be favored by the same type of person who likes Carolla, for example, might be tempted to advertise on that program. The advertiser could get an even bigger pop if the podcast host endorses the product.
Pattiz sees podcasts as the new frontier of radio and an open field for national advertisers to play in and he is putting his own money into the company.
“When I got into this, I knew I would have to support the business until it became profitable,” Pattiz said. “We’re not profitable yet, but I’m prepared to spend what I need to spend to be able to prove that this podcasting does have the same dynamics as when I took Westwood One from an $11 million new public company to nearly $600 million.”
Pattiz founded Westwood One in its namesake L.A. neighborhood in 1976 and it grew into one of the largest producers of radio programming in the United States.
He left the company to form Courtside. The radio production and distribution company, whose stable include shows by Laura Ingraham and Bill O’Reilly, started with a staff of four and now has 20 employees.
In 2012, Pattiz met Christopher “Kit” Gray, who was operating his own advertising company for podcasts such as Carolla’s. The two formed a partnership last year and created Launchpad, where Gray is president.
Gray is the one who decided to sell advertising for podcasts in 2009 and pitched the idea to Carolla. While the podcast host said he wasn’t looking for an ad salesman, he wasn’t going to stop Gray from trying.
“We got a Viking ship. You want to grab an oar and start helping us row, why not?” Carolla said. “I didn’t want to discourage anybody.”
By the time Gray partnered with Pattiz, Gray was bringing in $2 million in annual revenue.
Most advertising on podcasts comes from direct-response advertisers such as 1-800 number advertisers, but Gray said they have been able to attract national advertisers this year including Fortune 500 companies.
The ads range from live endorsements by radio personalities to traditional commercials. Prices vary depending on audience and availability of ad time.