Ruby, the branded content division launched in May at iHeartMedia, could not have come at a better time. Not only are ad budgets under more scrutiny this year, but Will Pearson, President of iHeartPodcasts, said the podcast business has evolved from a medium driven by direct response advertisers into one in which traditional brand marketers are spending more on audio.
“Brands are waking up to the effectiveness of podcast advertising and seeing what the direct response advertisers were seeing,” Pearson said. “And then as they dip their toe in the water, they are moving into the space of custom podcast and custom integrations and opportunities.”
Building on the branded content work that iHeart has been doing for the past four years, Ruby handles production, sales, and marketing of branded podcasts. Senior Marketing Director Rachael Swan-Krasnoff said what differentiates the Ruby team is that they not only have a background in podcasts, but they are also particularly focused on KPIs and legal reporting that marketing managers are focused on when they approach advertising.
“We like to say that we're building more than custom podcasts, we're building comprehensive audio campaigns,” said Swan-Krasnoff during a presentation to advertisers last week. “We'll work with our partners to come up with a custom podcast, but that's just the content driver itself. We could expand that to really meet listeners where they are across the audio realm.”
Projects Start With Questions
The hardest task is often flushing out a custom podcast idea that fits best with a brand when they approach the Ruby team. Swan-Krasnoff said it means asking plenty of questions, like why they want to create a custom podcast, what they are looking to accomplish, who the brand is speaking to, and whether it is a different audience than the other marketing efforts the brand is already doing. “These things are really important because they help us really craft those stories,” she said.
For marketers approaching branded podcasts, there is often some education required. That includes convincing them that they are not buying downloads.
“We stress that the time that [brands] actually spend with listeners is the most valuable,” Swan-Krasnoff said. “Look at things like time spent [and] completion rate, because it is about building a connection and communicating with your audience.”
In the months since Ruby formed, it has worked with a wide range of brands including Under Armour, T-Mobile, Trojan, and IBM as they have produced 30 shows.
“We see the most success with upper funnel [metrics] like brand awareness, shift perception, and things like that,” Swan-Krasnoff said. “However, it is definitely a growing space for driving sales, and we're starting to understand that more.”
The biggest hit for iHeart’s Ruby so far has been the Chasing Sleep podcast which it produced in a partnership with Mattress Firm. It features interviews with people with uncommon sleep schedules, from astronauts to people who work in the dark for days. Swan-Krasnoff said it drove a four-times return on ad spend for the client, and a 45% incremental lift in sales.
Giving iHeartMedia confidence that it is heading in the right direction is how advertisers have responded. The company says it has had a 91% renewal rate from season one to season two with all the brands that it has worked with so far.
“I don’t know that there’s a better stat in terms of what brands have seen with effectiveness,” Pearson said. “When you can find that intersection of podcasts that have the brand messaging, and the team saying let’s make sure we're really building something that will stick with the audience – I think that's why we see those kinds of rates.”
Sometimes Smaller Is The Right Answer
Unlike some other forms of advertising, Swan-Krasnoff said there are times when it’s more important that the branded content is reaching the right audience than reaching a large audience. That includes the Headstart podcast they built for pharmaceutical company AbbVie for people with chronic migraine headaches, and the Untold Stories series for people living with myasthenia gravis produced for Argenx.
“Brands are starting to shift to be more and more specialized when it comes to those audiences,” Swan-Krasnoff said. And to gain the broad reach, she said iHeart can leverage its massive radio platform to build a campaign’s cume.
“The strategy around reaching these audiences isn't really all that different between the custom podcast and every other podcast we launch,” Pearson added. “We know that we're able to reach, as people often hear, nine out of 10 Americans, and so we can find those subsets that people are trying to go after.”