With podcasting, listeners now can download radio programs automatically and listen when they like. Would they subscribe to audio infomercials, too? Now, there's an interesting question.

By Jack Gordon

In a November 2005 e-mail promotion to stock market investors, David Gardner, editor of Motley Fool Rule Breakers, ranked "podcasting" alongside nanotechnology as a world-changing innovation. "Podcasting will do for audio what TiVo is doing for television," he declared, "sending advertisers scrambling to reinvent their profession."

With that prediction, Gardner joined a chorus of voices hailing podcasting as the biggest new thing that most people have never heard of.

Podcasting is a technology by which audio and video files can be downloaded automatically from the Internet in the form of subscription "feeds" and played later on computers or mobile MP3 devices such as Apple's iPod. At present, most of these RSS feeds are in audio format, which means that most podcasts are essentially radio programs that can be listened to at the user's convenience. They can be minutes or hours long. Anyone with a web site can broadcast them. And they can be received by anyone who has downloaded special "newsreader" software (free programs with names such as ipodder) onto a hard drive or an MP3 player.

Podcasting began to catch on in late 2004. What makes it different from the more familiar model of "go to somebody's web site and download an audio file" is the subscription angle. A podcast isn't a one-time download but a program you receive regularly--daily, weekly or as often as the podcast refreshes. Subscribing is usually free. The newsreader software monitors the feeds of podcasts to which you have subscribed and downloads new editions automatically.

Podcasts thus are like audio versions of Internet blogs and also like TiVo for television. But with a mobile MP3 player, you can listen while you jog. What you're listening to might be Rush Limbaugh's syndicated radio show (he launched a podcasting option in 2005) or some kid talking about Harry Potter books from his bedroom, with street noise in the background.

Web sites offering directories of these programs, including ipodder.org and podcastalley.com, list hundreds of podcasts on subjects ranging from business and computers to religion, automobiles, aviation, bicycles and beer. A pioneer of the medium is former MTV VJ Adam Curry, whose "Daily Source Code" (mainly music) is among the best-known podcasts.

It is easy for traditional radio stations to repackage their programs in podcast format, and some are doing so. KSL, an AM and FM talk station in Salt Lake City, invites listeners to download podcast versions of broadcasts ranging from Brigham Young University football games to religious instruction from the 2005 Mormon General Conference.

KSL general sales manager Laura Woodbury says that podcasts include commercials that are produced in-house for the original live broadcasts, as well as commercials sold to advertisers specifically for Internet streaming. "We're averaging about 5,000 download hours a week," Woodbury said in November. "It's a very small part of our business now, but next year we expect it to become a bigger revenue stream."

A mid-2005 survey by the Diffusion Group of Dallas, a research firm focused on digital media, found that 55 percent of Internet users had never heard of podcasting. But if you're not aware of it, your teenager may be. Marc Freedman, a contributing analyst for the Diffusion Group, estimates that there are about 5 million podcast users now, and predicts the number will rise to 60 million by 2010. By that time, however, he says the technology probably will go by a different name (he gives the term podcasting maybe three more years to live) and will be vastly improved, with shorter download times and feeds much more likely to include video.

There are three basic types of podcasters, Freedman says. The first, most numerous today, are "grassroots amateurs." The second, now jumping on the bandwagon, are established radio stations, Internet broadcasters, newspapers and magazines that see podcasting as a cheap and easy way to "leverage their existing content." For instance, the British Broadcasting Corp. (BBC) and National Public Radio (NPR) both began podcast feeds in 2005. The third group, only beginning to make its presence felt, are "serious advertisers and marketers."

SERIOUS MARKETERS
Joe Rashbaum, president of The Radio Solution Co., a Ventura, Calif., direct-response radio agency, sees podcasting as a potential bonanza for DR marketers. "The iPod and streaming audio on the Internet have changed the way kids listen to radio," he says. "Rock stations, especially, are losing their audience to online, satellite and podcast [alternatives]." And at this point, the fledgling podcast medium is "entirely up for grabs," he says. "Any guy in a garage has the potential to become the Casey Kasem of podcasting. Nothing says that you can't be the biggest thing to hit podcasting."

Since most iPod users are in their teens and 20s, Rashbaum says, marketers whose products appeal to that age group are the most obvious candidates to test the new medium: "a cool audio system for your car or a male-enhancement product, rather than life insurance, for instance." Even for marketers aiming at young adults, "I'd never tell a client to set aside 40 percent of the ad budget or to give me $5 million to spend on podcasting. But test it," he urges. "If it fails, you don't lose much money."

Test it how? One possibility is to sponsor or buy spots in an existing podcast aimed at a demographic you like. No economic models or audience-measurement systems yet exist for this, Rashbaum says (see his "Radio Dial" column on podcasting in Electronic Retailer's September 2005 issue), so it's a crapshoot. "There's no such thing as established rates," he contends. "Just e-mail the administrator of the podcast and make an offer."

A more exciting possibility is to launch your own podcast that acts as a soft-sell marketing vehicle. "Some radio and television infomercials are already designed to sound like medical talk shows or news-interview programs," Rashbaum points out. A marketer with existing audio content can re-package it in the form of podcasts for next to nothing. On a more ambitious level, he suggests, "Podcasting could work like the Golden Age of television, when Phillip Morris would design entire variety shows to sell cigarettes."

Stephan Spencer, founder and president of Netconcepts, a Madison, Wis., marketing firm specializing in e-commerce and search engine optimization, agrees with part of that thinking. Yes, he says, DR advertisers should explore the idea of launching their own podcasts. He suggests there are many possible formats: monologues, interviews, roundtable discussions and recorded presentations. But don't think in terms of programs that last 30 or 60 minutes, he advises. Think instead of much shorter shows.

Respond2 Launches Johnny Carson Podcast

Advertising agency Respond2, a DRTV media production company headquarterd in Portland, Ore., recently announced the launch of exclusive Johnny Carson podcasts, featuring segments from "The Tonight Show" and television legend Johnny Carson. Initially, the podcasts will consist of two- to five-minute audio segments of Johnny Carson's monologues and will ultimately include other classic "Tonight Show" moments. Carson fans can subscribe at www.johnnycarson.com to access a free weekly podcast. The podcasts also contain a promotional message that directs listeners back to the Johnny Carson web site, where they can receive a free sampler DVD with clips from the Ultimate Carson Collection, one of the biggest selling DVD collections ever released. "Johnny Carson's humor is timeless, and podcasting is another way to allow new generations of fans to enjoy his work, plus let established fans relive some great moments from the days when he ruled late night television", says Tim O'Leary, CEO of Respond2."As we were working with the Carson Company to put these podcasts together, we realized that they are also a wonderful historical record of what was happening in the country. Every night Johnny talked about world events, politics and entertainment. These podcasts are a great way to laugh a little while reliving or learning what was going on 20 or 30 years ago."

The future of podcasting won't lie in hour-long programs, Spencer predicts. "Just as blogging has gone shorter and more bite-sized, this medium will move toward a model where people subscribe to podcasts that last five or 10 minutes." If you sell kitchenware, for instance, by all means consider sponsoring a podcast that offers cooking tips or interesting recipes. But he suggests that people are more likely to subscribe to a podcast that gives them one good, five-minute cooking tip per edition than to a daily or weekly program that takes an hour to give them 10 tips.

The fact that a podcast is not a one-time audio download but instead reaches subscribers who listen regularly is a great potential advantage to DR marketers. "It's like opt-in e-mail marketing," says Freedman. "The most valuable asset a company has today is its current customer list." Podcast subscribers are potential customers who have opted to receive regular information from you in audio form--customers with whom you may be able to create a lasting relationship.

Translate that principle to a direct response business such as catalog retailing, and the possibilities become very exciting, suggests Ed Weaver, president of MPReach of Dallas, a company founded in 2005 as a distribution channel for digital media. "Suppose," Weaver says, "that instead of sending out a million catalogs in the mail and hoping for 15,000 orders, you have a podcast featuring your new products that goes to 15,000 opt-in subscribers who download it regularly. For a lot less money, you're distributing information to buyers, not just prospects."

WHO'S DOING IT?
Podcasting is so new that examples of marketers already using it, even in modest ways, are few and far between. Freedman says that venerable books on tape are now available as "books on podcast"--a case of the product being delivered via the medium rather than just advertised on it. As a more illustrative marketing example, he cites, "a raunchy, X-rated podcast [in which] a husband and wife do life commentary. Their sponsor is Durex condoms."

As an example of a direct response marketer who is ideally positioned for podcasting, Spencer points to his Denver-based client Steve Spangler of Steve Spangler Science, an online retailer of science toys and classroom-experiment kits. Spangler is already a celebrity among science teachers and does regular video segments for KUSA-TV, the NBC affiliate in Denver (in which he demonstrates such things as the physics of exploding pumpkins), and he maintains a popular Internet blog. Spangler describes the short podcasts he began to offer last July as a marketing extension of the blog.

So far, Spangler says, his podcasts have been intermittent, and he has no data to show what effects they might be having on his business. "But considering the number of people I see with iPods, I want to get on those iPods," he says. "The [marketing] potential is limited only by my creativity."

Sources agree, however, that at this early stage of podcasting's evolution, it is hard to sort the genuine promise from the hype. Weaver, among others, doubts the notion that podcasting will produce a whole new crop of rock-star-caliber celebrities, never mind celebrity marketers. "There will be a lot of niche players in podcasting," he says, "but for the most part people who are popular on radio and TV today will be popular on podcasts tomorrow." Rush Limbaugh is already there, he points out. Other established voices are following.

Freedman urges caution. "The technology is still immature, there are no companies generating lots of money with it yet, and many businesses would be well advised to stay clear at present." However, he says, "fundamentally, we're very bullish. Podcasting provides real consumer value. Digital content delivered to you automatically by subscription? There's a need there."

Whether it will be called podcasting or something else, sources agree, radio-by-subscription is here to stay. And video-by-subscription for mobile devices is right around the corner.

Jack Gordon is editor at large for Electronic Retailer magazine. We would appreciate your feedback. To submit comments, point browser to podcastingjan06.marketing-era.com.