The soundscape (aka the market for audio and voice technologies) has been one of NVP’s core investment verticals over the last few years, in part thanks to our partners at Audible and their foundational experience in and understanding of the space. We’ve been investing in this market based on our thesis that the explosion of audio hardware endpoints (smart speakers, earpods, smart watches, and the ubiquity of smartphones) combined with the improved intelligence layer of speech to text and text to speech is fueling rapid growth in consumer listening habits and causing skyrocketing engagement. Specifically, we believe audio will emerge as a major media channel in the coming years, and we’ve been investing in founders who are building the software tools for creation, distribution, and monetization to keep up with the ramp in consumer listening.
In line with that thinking, NVP recently led a $4m financing round in Podsights, which was announced last quarter. Podsights allows brands to track consumer engagement within the growing podcast market by providing a technology platform for advertiser attribution. This is important in a developing media market such as podcasting as both advertisers and publishers want to demonstrate spend return on investment. Audio doesn’t allow for the same easy to track consumer feedback signals as other digital content channels that have emerged in the past 10 years, such as mobile and video, and so we believe there is room for new solutions in the market.
We asked Sean Creeley, a founder of Podsights to share some of their origin story, give us some insight to the market, and of course to dish on his favorite podcasts. Here is what he had to say:
NVP: What initially attracted you to the podcast market?
SC: Honestly, it didn't at first. The VC market was only backing apps when we first started looking at podcasting. Podcast apps are a tough business, near impossible as competing with the app installed on your phone or the app where you already get your music is a losing battle. You had to completely rethink audio in apps, which is where you got Clubhouse/Et Al.
The podcast ad tech, however, was a blue ocean. No one really knew who was even in the market; no impression reporting other than excel sheets and measurement via URLs and discount codes limited marketers entering the space.
I like pulling threads, and it was a good thread.
NVP: We saw a big podcast boom in 2020 and early 2021 because of COVID. What do you predict for the podcast market in 2022?
SC: I think you saw a boom in spite of COVID, not because of it. COVID threw off the listener's routines and the creator's process. The whole industry saw a dip, Podsights included. People made time for great content that normalized and grew over time.
We continue to see investment in the space. Content is one piece, and distribution is the other. Apple/Spotify/iHeart/Audacity/NPR are funding better, more diverse, highly-produced original content. Facebook, Amazon, and others are entering for more distribution.
I don't know; I hope we see a robust decentralized podcast market in 2022. One where the best content rises to the top through the noise and attracts whole new sets of audiences.
NVP: How do you see video and other creators playing in the podcast market?
SC: You love to see it. Podcasting is just audio distributed in a weird way. Anyone that comes in with a fresh set of eyes only pushes the medium forward.
Fictional podcasts are always a good example here. Limetown was arguably one of the first hits in the genre, and they just came back with Shipworm, a single-episode podcast that is a narrative movie. Audacy is playing with the medium in this way too.
NVP: Do you think advertisers will borrow ad spend from other channels like digital media?
SC: Borrow isn't the right word, shift is better.
Yes, and we continue to see this. The efficacy of social and search has a natural plateau and when brands look for new audiences, podcasting is a great choice. We continue to see more brands enter the space and grow their presence as an effective medium.
NVP: You guys recently raised a $4M round. What was the biggest challenge in fundraising?
SC: Total Addressable Market. To believe in Podsights, you have to believe in podcasting. If you look at our investors, all are heavily involved in the space. Even with the growth that we've had, if someone puts a ceiling on podcasting, that's the biggest you are ever going to get.
IAB, eMarketer, and a few others revised their podcasting ad spend projections upward about two months after closing the round. It would have been nice if they did that sooner.
NVP: What is your favorite podcast?
SC: I'm a fan of narrative podcasts. RadioLab is a good example of the genre. Back in 2013, they did an episode on rabies which was one of the first podcast episodes I ever listened to, and it expanded my brain a bit.
If I had to pick one, it would be the first two seasons of More Perfect, then they did that musical, and it all went to hell.
Others would be Floodlines, The Experiment, Dan Taberski's work, Slow Burn, and Wind of Change.
I don't understand people that listen to two people talking in a garage, but I'm sure glad they listen.
Today, podcast advertising is just shy of $1B in annual spend, but it has seen 61% YoY growth since 2015. 25% of podcast advertisers are demanding attribution data today and that number is rising every week. It is expected that 50-60% of advertisers will demand attribution data by this time next year. There is a similar pull from publishers demanding attribution data because it exposes the supply of their content to new advertisers. This is the only media segment that is expected to see double-digit CAGR growth in the years ahead, while segments including TV, radio, newspapers, and magazines are expected to stay stagnant or decline.
As more and more brands flock to the growing podcast market to capture the growth in consumer engagement, there are minimal tech tools today to support the audio-on-demand ecosystem. NVP believes Podsights has the team, solution and go-to-market strategy to dominate this space and we are excited to be along for the journey!