Podcast Agency Founder Helen Parker: The Easy Money Has Dried Up.

For all the attention paid to programmatic advertising as a way to monetize podcasts, one longtime audio executive says the economics remain pretty simple: unless a show is among podcasting’s biggest, programmatic alone isn’t going to pay the bills.

“No one is making money off pure programmatic advertising on podcasts unless you are in the top, top tier of listenership,” says Helen Parker, Managing Director and Co-Founder of podcast agency Strange Magic.

Speaking on the “PodBiz” podcast, Parker says the more sustainable model increasingly treats a podcast as the center of a community that can generate revenue in multiple ways.

“Marketing and managing a podcast feels a lot more like managing a community now,” Parker says. “It’s a community of people that you are receiving revenue from in different ways because you’re offering content that meets them where they are and benefits them at that point.”

That is a significant shift from expectations several years ago, when the flood of investment into podcasting fueled the idea that creators could build a show, grow downloads and turn advertising into a full-time living.

“There was a myth about three years ago that isn’t happening now — this idea that you could make a podcast and that would be your entire job, and that would be fine forever,” Parker says. “In reality, there are about 20 people in the world who are doing that and managing to pull it off.”

Parker says the economics have also changed for producers and agencies. When she entered podcasting from the tech industry six or seven years ago, platforms were spending heavily to attract listeners and establish themselves in the rapidly growing medium.

“There was easier money to be made — there was low-hanging fruit,” Parker says. “It was a land grab by commissioners to get people to use their platforms.”

At the time, she says, producers could take an idea to content distributors that were eager to build catalogs and attract subscribers. Today, the environment is considerably different.

“Now we’re in a completely different stage where the industry is flattening out and settling down, and there isn’t that VC, speculative investment money floating around,” Parker says. That does not mean the money has disappeared. Rather, Parker says podcast companies need to look in more places for it. “I think that it is in a lot of places, so you have to go and get it from a lot of places,” she says.

Making The Case To Brands

Brands remain one of those sources, but Parker says podcast companies need to be realistic about what the medium can deliver. Marketers accustomed to digital campaigns generating hundreds of thousands of impressions may need to be educated about the different economics and engagement levels of podcasting.

“You have to remember that brands are used to CPAs and advertising views on their website or ads in the hundreds of thousands, and you have to reeducate them about what benchmarking is in the industry,” Parker says. She compares the difference to someone attending an event at Wembley Stadium. Advertisers might have numerous opportunities to reach that person on the way there, but getting someone to sit and listen for an hour creates a different type of connection.

“It’s a lot fewer people that you can fit in the stadium, but it is a lot more impactful and it will stick with them,” Parker says.

Parker sees the tougher economics less as a warning sign for podcasting than as part of its evolution into a more mature media business. She predicts the next stage will bring more predictable pricing, clearer areas of expertise and a better understanding among companies of where their investments are likely to produce results.

“As the industry gets into its next phase — its teenage phase, as I like to call it — everything will become a little bit clearer, and it will feel a little bit less like everyone is scrabbling around,” Parker says. “It’s not a dying industry in any way, shape, or form; it’s just an industry that’s growing up a bit.”