With the country’s largest broadcast radio footprint and its biggest podcasting network, iHeartMedia Chairman and CEO Bob Pittman told investors Wednesday he’s not worried about attracting an audience. But he does believe the company could do a better job monetizing the quarter billion listeners it reaches every month. “We've got a lot of usage,” he told the Goldman Sachs 30th Annual Communacopia Conference. “But what we really have to do better is just monetize, which for me, if I have to pick a problem, I like that problem, because eventually advertising always follows usage.”
Among the ways iHeart has been working to wring more revenue out its audience is removing the silos from its 2,000-person sales force and training them to cross-sell all of its multiplatform assets; developing data and analytics tools that feed into the ad agency trend of buying audience cohorts and impressions instead of demos and ratings; and building out what Pittman called the audio industry’s only unified tech stack so marketers can buy audio, in all of its manifestations, from one platform. “We're building rapidly with the major holding companies trying to build into their new unified buying systems, which I think holds great promise for us,” he said.
What Pittman called “the final piece” in iHeart’s tech stack, Triton Digital last week announced the launch of a new global audio exchange that will, for the first time, aggregate audience from broadcast, podcast and streaming. Triton, which was acquired by iHeartMedia for $230 million in February, says it will offer access to the largest single pool of audio audiences, with more than 100 billion audio impressions per month. Branded as Triton Audio Marketplace, the exchange will offer inventory from more than 250 media companies, including 17 of the top 20 broadcasters; more than 700 hit podcast titles from the iHeartPodcast Network; and the audio platforms Voxnest and Spreaker with content from thousands of creators. This dovetails off deals iHeart has cut with online audio aggregator TuneIn and with the French broadcaster NRJ Group to make their inventory available to buyers through the audio marketplace, while also creating synergy with its rep firm Katz Media Group.
“What drives the marketplace is having an enormous amount of supply,” Pittman explained. “By us putting our stuff into a marketplace, we sort of make the market. Now we are offering others the opportunity to join that and be a part of it. And so I think anybody who's selling audio ads probably is interested in this because it allows them to take advantage of and use our scale as well for their benefit.”
While audio is enjoying a resurgence, it is podcasting that is leading the charge as the once niche channel is now a mainstream behavior with an audience that more and more mirrors the U.S. population. Audiences forming close bonds with podcast hosts have led to high engagement levels which Pittman said is driving up podcasting ad rates. “We’re getting CPMs [cost per thousand impressions] like you’ve never seen in audio before,” he said.
Pittman compared podcasting to the birth of cable TV networks and the explosion of the internet and said podcasting is following a similar trajectory. “I've seen this before, and what always happens is usage precedes revenue. Eventually, the advertiser catches up,” Pittman offered. “And so we hold out great hopes for podcasting, both for the usage continuing on this trend and for the advertising to catch up with it.”
While the forecast is for the U.S. podcasting market to reach $1.33 billion in revenue in 2021, eMarketer predicts the market will expand to $2 billion in 2023. President and COO Rich Bressler pointed to two ways iHeart hopes to participate in that growth. “One is just the overall market growing and then you have to look at our performance within the podcasting industry,” he said. “Yes, the whole industry is growing, but we can continue to significantly outperform in podcasting. So we have the ability to take revenue from both of those pools as they grow the absolute number and the outperformance.”