The second quarter brought a doubling of podcast ad revenue compared to a year earlier for iHeartMedia and CEO Bob Pittman says last week’s acquisition of Voxnest will allow the company to “deepen the monetization” of its podcast business. In an interview with CNBC, Pittman said iHeart has already been able to leverage its radio business to promote podcasts into hits, and the combination of its radio sales force with ad tech acquired from Voxnest will help strengthen its position in the audio ad market.
“While some people are still struggling for profitability in podcasting, we actually have a profit margin that’s better than the overall company margin,” said Pittman. “It’s been a great business for us and shows no signs of abating.”
On Friday, iHeartMedia announced it would go from a minority shareholder in Voxnest to buy the company outright. The deal gives iHeart the monetization platform Dynamo and ad tech capabilities including dynamic ad insertion, audience and content targeting, programmatic podcast buying across all audio sales platforms, and a full podcast analytics platform. The company said it expects that additional inventory coming from the Voxnest Audio Network will increase the monetization across a range of podcasts benefitting both ad buyers and sellers. iHeart said it will also be able to drive greater monetization for creators of podcast content – wherever they currently publish their shows – by connecting Voxnest’s advanced ad technology with multiple publishing platforms across the industry.
Pittman said the growth of new consumer electronic platform products such as smart TVs and smart speakers has allowed iHeart to “substantially” increase the use of its digital audio services in the home. “I hate to say there is any good news about COVID, but if there is any, it’s that people being at home let them discover these new platforms for radio and podcasts and all of our audio products,” he told CNBC. “We see in podcasting, when people stay at home more, podcast listening doesn’t go down. But what they listen to changes and having a broad array of podcasts has been very helpful to us.”
The company is scheduled to release its third quarter revenue numbers on Nov. 9. Pittman did not offer hints at current trends, but he said 2020 has been a year of adjustments for marketers. “It is no secret Q2 was not a good quarter for advertising,” he said. “Advertisers wanted to figure out a message to say in times like this, and how do they effectively reach the consumer. The great news about radio and our core business is that it is probably one of the most efficient ways to reach consumers – and for our company, we have a reach larger than any of the TV folks and larger that Google or Facebook in the U.S.”
As podcasting and other digital products are added to the mix, Pittman said they are talking less to ad buyers about a specific “silo” and more about the multiplatform possibilities they can offer. “It is really the future of the audio business,” he said.