As podcast revenues climb, NPR board questions effect on radio sales

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As NPR’s income from podcast advertising grows, the network aims to hold the ad spots to standards that are fairly similar to those governing its broadcast underwriting language, according to a sales executive.

Bryan Moffett, v.p. for digital strategy and sponsorship operations at National Public Media, briefed the NPR board’s Resource Development Committee about gains in podcasting revenue during an April 30 meeting. NPM is the national corporate underwriting arm of NPR and PBS.

According to Moffett, NPM underwriting sales in all categories are 27 percent ahead of budgeted revenue for the second quarter of this fiscal year, which started Oct. 1. In the current quarter, NPM has reached 96 percent of budgeted revenue, he said. With strong gains, NPM has increased its forecast for the fiscal year.

Moffett didn’t share specific numbers, but a Pew Research Center State of the News Media study released last week reported that NPR’s revenue from podcast advertising had doubled from fiscal year 2013 to 2014. Downloads of NPR’s podcasts grew 40 percent over that time, according to the report.

And NPR’s podcast ad income from the first five months of this fiscal year has outstripped its take in all of fiscal year 2014.

Podcasting “has really given us a conversation to have with marketers,” Moffett said. “We’re doing everything we can to leverage that.”

Howard Wollner, a committee member who also chairs the NPR Foundation, asked about differences between over-the-air and podcast underwriting. Unlike broadcast announcements, the FCC does not regulate sponsorship messages on podcasts. “That’s a whole other market for us that won’t be interested in radio,” Wollner said.

NPM has been selling a lot of combined podcast and broadcast packages to underwriters, Moffett said. “You just speak to [advertisers] in a different way” to package the two, he said.

NPM guidelines impose some restrictions on podcast underwriting. For example, they prohibit host endorsements of products, even though NPM research found that listeners would not mind. “We won’t do that — it’s too far,” Moffett said. “It’s too commercial.”

But on its website, NPM does point out opportunities for advertisers not provided by over-the-air messages.

“Compared to broadcast, podcast sponsorship messages offer more flexibility in describing features in qualitative terms, for instance with product descriptions like ‘designed to be simple and easy to use,’” NPM’s site says.

NPR limits “pre-roll” messages, which appear at the beginning of podcasts, to no more than 15 seconds. Ads within the podcast can be 30 seconds long, and some can be read by show hosts.

On its site, NPM provides examples of mid-roll content that veer into native advertising. In one example, hosts of the How to Do Everything podcast weave a promotion for the Netflix series House of Cards into a discussion with a manufacturer of playing cards. In another, they joke about “getting paid entirely in pants” in a message about men’s clothing website Trunk Club.

NPM has gauged listener response to podcast underwriting in focus groups and commissioned Edison Research to examine the issue. According to Moffett, researchers found that podcast listeners are not concerned about hearing ad-like spots on podcasts. They’re also active public radio listeners and donate to stations, with some even giving to stations outside of their markets, he said.

Yet station leaders at the board meeting expressed concerns about allowing different standards for broadcast and podcast spots. Such messages could confuse listeners, said committee member Kerry Swanson, station manager at Northwest Public Radio in Pullman, Wash. “No one is going to understand, ‘Oh, that’s different because that’s radio and that’s a podcast,’” he said.

But committee member Chris Boskin, a public board member, said NPR was being “too sensitive” about the public’s ability to differentiate podcast ads from broadcast announcements.

“I think they’re much more sophisticated when it comes to podcasts and the Internet,” she said. “People are much more understanding and accepting. We think we’re sort of this island unto ourselves, and we can’t have advertising.”

Paul Maassen, g.m. of WWNO-FM in New Orleans and a candidate for the board, cautioned board members during public comment that NPR is on “a very, very slippery slope,” and that the board should keep tight reins on how podcast sponsorship is handled.

“It’s not because the audience doesn’t tolerate it; that’s not the point,” he said. “The point is — we’re now starting to devalue what happens on the radio side.” Allowing different standards for podcast messages could sway advertisers to focus more spending on the podcasts, he said. “It’s going to make it harder to sell radio, and it’s going to create two classes of advertising,” Maassen said.

Moffett said NPM continues to update its guidelines for podcast sponsorship messages, and that NPR aims to minimize differences between podcast and broadcast credits. Non-newsmagazines can include sponsor messages read by hosts, for example, but other announcers handle the job for newsmagazines.

“I’d say it’s a little further than what we can do in an FCC-appropriate credit,” Moffett said, “but it is not that far from it. It is not nearly as far as the commercial side is going.”

  • drloosen

    Will there be podcast pledge drives?

    • Mason Gibb

      Once a year, Ira Glass does a pledge drive on the podcast of TAL that is not broadcast on terrestrial radio. I think this has been going on two, maybe three, years.

  • Mason Gibb

    “NPM guidelines impose some restrictions on podcast underwriting. For example, they prohibit host endorsements of products, even though NPM research found that listeners would not mind. ‘We won’t do that — it’s too far,” Moffett said. “It’s too commercial.'”

    It seems that Moffett is unfamiliar with NPR’s podcast advertisements. Glenn Washington provides lengthy product endorsements at the beginning Snap Judgement podcasts–the two most egregious in my memory would be Washington’s advertisements for a free scale when you sign-up for stamps.com and his endorsement of audible.com. When NPR’s flagship ATC does a puff-piece on the popularity of audible.com–without referencing audible’s forerunners or competitors, such as public radio’s own “Selected Shorts”–it has a direct effect on my cynicism regarding NPR’s journalism and its relation to corporate underwriters. That puff piece: http://www.npr.org/2015/03/09/390948789/straight-to-audiobook-authors-write-original-works-meant-to-be-heard

    The saddest moment in my weekly listening is Ira Flatow’s Science Friday podcast. I get sick to my stomach hearing Ira Flatow try to convince me that razors are impractical to buy in stores, and that he personally endorses some sort of monthly razors-by-mail company. This is Ira Flatow, a public radio celebrity who has been covering science for NPR longer than I’ve been alive. And now NPR has him reading 60 seconds of ad copy for the podcasts? People talk about weeping due to NPR’s reporting. Ira Flatow’s commercials will bring me to tears.

    I don’t know what sort of listener they had in their research on underwriting statements. I am 30 and these days listen to most NPR programs via podcast. I have been a member of a local station 4 of the last 6 years, and have donated a car to my local station. Due to the increase in time given to NPR’s terrestrial underwriting announcements, its disregard for NPR’s terrestrial underwriting guidelines, and now further efforts to attach market value to its podcasts leaves me sick. My membership is up for renewal in May or June; I do not anticipate renewing my membership. If NPR is going to court advertising dollars with zeal, it will have to make do without my sponsorship.

    • “The terrestrial underwriter spots seem to be in violation to NPR’s printed guidelines prohibiting endorsement and limiting spots to “clearly objective” and “value neutral” language.” — Which spots are you referring to?

      • Mason Gibb

        Almost all the lengthier underwriting spots for energy companies, and even most LumberLiquidators spots, use the words “renewable” or “sustainable”….Most of NPR’s listeners would consider these words to have a positive value. The marketing folks writing underwriting spots for the corporate sponsors are using these words because they are “promotional”. If the listeners and the corporate sponsors understand this language is not value neutral nor objective, if the language is promotional in nature, it seems a clear violation of the Underwriter Guidelines adopted by NPR and posted by NPR’s current ombudsman.

        Lots of people get upset with America’s Natural Gas spots so I’ll leave that for others to pick apart. That said, I think they generally have good points. But I’ll take LumberLiquidators: most of their spots mention renewable or sustainable wood harvesting. Keep in mind, recently LumberLiquidators has come under fire for using illegally-cut timber. For NPR to allow that sort of language into the corporate underwriting spots is irresponsible from an organization committed to accurate journalism.

        Many spots also go beyond the acceptable limits of underwriter identification (Procedure 1), particularly the limit on descriptions of product content, which should not explain products/services generally assumed to be part of the product. The example given is a hamburger contains mustard, pickles, and onions. By extension, listing some of the varieties of flooring available from LumberLiquidators would seem to include detail in the underwriting spots that can be assumed.

    • Regarding “Snap Judgment” — the show is presented by both NPR and Public Radio Exchange. So it’s possible that those endorsements are being sold via PRX, not National Public Media (which sells NPR’s underwriting).

      • Mason Gibb

        Thanks. Still, Glenn Washington won an NPR talent contest, he is identified with NPR. If NPR is going to poke its nose into what Diane Rehm does off-air, I’d expect NPR to be interested in what Glenn Washington is doing on air (or, more correctly, on-podcast)
        Ira Flatow’s endorsement spots on Science Friday are some of the saddest things I’ve ever heard. Yet, his endorsements of a razor by mail scheme are likely PRI not NPR/NPM. NPR’s Wait Wait also has the show’s host or announcer read their underwriter spots–I think even some of these go out on the terrestrial broadcast.

        • Adam Ragusea

          The Public Radio Talent Quest was CPB/PRX, not NPR.

          • Aaron Read

            Very true, however, this highlights a longstanding problem: the public neither knows nor cares who “owns” these shows. To them, it’s all just “NPR”…a branding decision that was largely made by default many years ago by member stations, that is now coming back to haunt us.

            If APM “goes off the rails” on podcast advertising and gets super-commercial, they are within their rights to do so. But the problem is that NPR is going to take the brunt of the blame because listeners don’t really know…nor, again, do they care…that APM is an outgrowth of Minnesota Public Radio and is actually a *competitor* to the NPR “mothership”. All they know is that a “public radio show” (which they equate to “NPR”) is airing really obnoxious advertising.

            As I’ve mentioned elsewhere. When all this was happening on AM & FM airwaves, we had the FCC to backstop things and federal law to prevent these sponsorships from getting too commercial. Now all we’ve got is self-recognizance. That’s not going to work for long. It’s inevitable that someone will get tempted by enough $$$ to go over some vague and half-defined “line in the sand” and offend everyone.

            This whole problem SCREAMS for an agreed-on standard for podcast advertising that all producers, local and national, agree to adhere to.

          • Adam Ragusea

            Perhaps, but I think we’re in a time in which the system will benefit from its organizational diversity. Lots of different entities trying lots of different things and seeing what works. And if NPR ends up catching flack for other people’s actions, they can cry about it in their very nice building.

          • Aaron Read

            Remember Adam, as goes NPR, so goes NPR member stations. By “NPR catching flak” I mean that the member stations are going to be on the front lines of listeners complaining about overly-commercial podcasts during our own attempts to raise money (to pay NPR affiliate fees) via pledge drives that have a major component of contrasting public radio against commercial radio.

          • Adam Ragusea

            I gotcha, I just think it’s probably worth it.

          • Aaron Read

            Fair enough. I don’t think it’s worth it, myself, but for a specific reason: the podcasts are free to experiment and find solutions that member stations, by and large, may not be able to implement. (because we are legally blocked from doing it on AM/FM, and thus most of us are effectively blocked from doing it in our online offerings, too)

            I also don’t terribly care for podcasts just assuming that it’s “okay” for member stations to pay for the privilege (via affiliate fees) to promote their experimental offerings, for free, that offer no tangible benefit for member stations. And may in fact be detrimental as those efforts WILL lure listeners away from existing revenue-generating platforms for stations but only MIGHT eventually have fiscal benefit for stations in the long run.

            If these podcasts (and I’m including podcasts produced by NPR/APM/PRX, etc) were saying “we’ll pay a roughly equivalent rate for station underwriting back to each station in the form of lowered affiliate fees for all the promotion of our podcast we’re doing on your airwaves” then I’d have a very different opinion about this.

        • Aaron Read

          SciFri is now distributed through PRI, so presumably it’s either PRI selling the underwriting or perhaps it’s Flatow’s own company.