Anxious to snap up the next big thing in audio media, another legacy radio broadcaster has invested in an L.A. podcasting advertising company.
Hubbard Radio, a St. Paul, Minn., radio station owner and operator, announced today it has purchased a 30 percent stake in podcast advertising network PodcastOne of Beverly Hills. Terms of the deal were not disclosed.
Hubbard Radio’s investment comes two weeks after E.W. Scripps bought Hollywood podcasting network Midroll Media for an undisclosed amount.
PodcastOne is an advertising network for more than 200 podcasts, including a number hosted by celebrities as well as repurposed talk radio programs. The company claims its network delivers more than 400 million impressions per month.
Despite a few breakout hits, podcast audiences remain relatively small and slow-growing; just 17 percent of Americans listened to podcasts in January, up two points from the year earlier period, according to a study published by Edison Research in February.
Traditional radio broadcast companies, however, are betting that the industry is on the verge of explosive growth. In particular, they are seeking to duplicate the success of mega-hit podcast “Serial,” a multi-episode nonfiction show that re-examined a young man’s murder conviction and has been downloaded over 80 million times.
“What will make (podcasting) explosive is more explosive content,” said Norman Pattiz, chief executive of PodcastOne. “Looking at the success of programs like ‘Serial’ and NPR, we think we should follow those leads.”
While Pattiz said PodcastOne is now looking into producing original programming, thus far the company has shied away from expensive and highly produced content. It instead has found success tapping into celebrity personalities.
“If you take a look at the hosts that are most successful, they have huge social media followings,” said Pattiz. “This isn’t rocket science. We go out look for personalities that have name recognition for a particular constituency. Right away they bring a fan base.”
PodcastOne sells advertising on behalf of podcasts hosted by Shaquille O’Neal, Adam Carolla and Nicole ‘Snooki’ Polizzi and for repurposed radio podcasts, such as WNYC programs “Freakonomics” and “Radiolab.”
Like many podcasting businesses, advertising sales on PodcastOne were initially all direct marketing campaigns, Pattiz said – direct advertising on podcasts is known for being a favorite method for tech companies such as Amazon, Squarespace and TinyLetter to reach consumers.
Brand marketing now makes up 40 percent of the network’s sales and Pattiz expects that to grow.
“I would expect next year and subsequent years it will go above 50 percent,” he said.
Ultimately, that transition is helping PodcastOne tap into larger and larger marketing budgets.
“Last year, we were a company that was one-third the size of this year,” said Pattiz. “Now we’ve got a business that’s in the low eight figures.”