Look, we may or may not be heading for a recession. But whether we are or not, it's always a good idea to be prepared. So, on today's episode of Good Morning, Podcasters, we're talking about podcasting during a recession, and moreover how a recession may impact podcast advertising spends.
The Unfortunate Truth
As a marketing agency owner, it hurts to say this, but marketing and advertising budgets are usually the first things to get cut when an economic downturn hits the market.
It's not the best practice to cut those budgets. Many recommend actually hitting the marketing gas pedal during a downturn since the competition might be easing up, but there are a lot of people to please—including shareholders.
What to Expect
Podcasters will likely see advertisers cut back on spending, leading to a decrease in demand for advertising on podcasts. You as a podcaster may expect to see fewer advertising opportunities, lower rates for advertising, and a competitive market of those competing for the limited ad bucks. Additionally, sponsors may prioritize more established or high-performing podcasts, leaving smaller or newer podcasts with fewer options.
Brands that continue advertising may be more interested in your show’s performance and metrics than they historically have been. They will likely take a more focused look at their Cost Per Acquisition for each show. There may be more time spent proving your show’s worth to your brand partners.
The good news is that podcast advertising is still very affordable, fans are typically loyal, and podcast advertising is typically pretty easy to track - through download metrics, promo codes, and unique links.
That said, it’s a lot easier for a brand to bail on a marketing budget with a number of podcasters and podcast networks than it is to cancel a national network ad buys. Podcasts are also a lot less easy to track than search and social ads.
So, if you start hearing more about big brands canceling their podcast ad plans, if you start to hear “no” from partners who typically say “yes,” or if, you know, we enter a full-blown recession, you’re going to need to be more flexible, prepare to offer more information about your audience and show performance data, and look for creative opportunities in the market to connect brands with your audience.
Hopefully none of that happens. But if it does happen, hopefully you’ll be prepared.
Fuzz Martin 0:00
Good Morning Podcasters let's talk about a thing that I don't want to talk about podcasting during a recession with a particular focus on podcast advertising.
Fuzz Martin 0:15
Happy February y'all. Fuzz Martin, host of Good Morning Podcasters thank you for making January a great month for the show. I had more than 1,000 unique listeners during January according to OP three stats. That's up from 452 in December. I've made my OP3 stats public, you can go to gmp.fm/stats. If you'd like to take a look at gmp.fm/stats. Look, I don't want to be a wet blanket. But I think it's important to talk about what the world of podcasting may look like if we end up in a recession. I'm going to quote a Forbes article called Are we in a recession yet dated January 27 2023. By Taylor Tepper
Fuzz Martin 1:08
According to a general definition of recession, two consecutive quarters of negative gross domestic product GDP, the US entered into recession in the summer of 2022. It's also from the article, the organization that defines us business cycles, the National Bureau of Economic Research, Ember takes a different view, according to envers definition of recession, a significant decline in economic activity that is spread across the economy. And that lasts more than a few months. According to that we are not in a recession in the summer of 2022, and quote, now it goes on to say that through the rest of 2022, we moved further away from the prospect of recession. Nevertheless, it could still happen. So we as business owners, or hobbyists, who make podcasting money on the side, need to stay vigilant and be prepared for what might happen if we do indeed, go into recession, or even come close to it.
Fuzz Martin 2:10
As an owner of a marketing agency that works with a number of large publicly traded companies as well as medium sized businesses, I can tell you from experience, that advertising and marketing are the first budgets to get cut. When the economy takes a downturn. We're essentially the proverbial canary in the coal mine. Now, businesses that know what's up continue to advertise through the hard times, especially knowing that their competition might be cutting back, giving them an opportunity to shine. One of our clients is run by retired Marines, they actually increase their ad spending during the last recession. And they said the reason for that was because you're supposed to, and I, quote, run headfirst into a firefight. If you turn your back, you get shot in the ass. I always love that quote. That's, of course somewhat atypical of most business philosophies.
Fuzz Martin 3:02
From a macro perspective, large corporations will typically lay off staff and cut back on soft expenses, which includes marketing and advertising, when they need to make their numbers look as good as possible to investors. So what can we expect as podcasters? If we go into recession? Well, we will likely see advertisers cut back on spending, leading to a decrease in demand for advertising on podcasts, you as a podcaster may expect to see fewer advertising opportunities, lower rates for ads, and a very competitive market of those competing for those limited ad bucks that are still available. Additionally, sponsors may prioritize more established or higher performing podcasts, leaving some smaller or newer podcasts with fewer options.
Fuzz Martin 3:52
Brands that continue advertising may be more interested in your shows performance and metrics than they historically have been. And they will likely take a more focused look at their cost per acquisition their CPA, for each show that they advertise on. And from your side, that might mean spending more time proving your shows worth to your brand partners than you are typically used to. Just as a small example. Last week, I saw a post from a couple of podcasters, who had their partnerships with a popular food delivery service cancelled. And correlation is not causation. So this situation may be completely unrelated. But it's a good example of what might happen. So this brand might be dropping some of its podcast advertising partners due to a drop in demand, and a huge increase in food costs. They didn't drop all podcasts, but they certainly did drop some of their mid tier partners. If the economy does go south, we'll likely see more of that from bigger advertisers.
Fuzz Martin 4:49
Some of the smaller advertisers might even go away altogether. So you're going to want to get creative and flexible with things. If they go in that direction. If this happens. And I'm definitely not saying right now is the time to pull the trigger on that. But if it happens, and you're on multiple channels, for instance, you have a podcast, a YouTube channel, a newsletter.
Fuzz Martin 5:12
If that's the case, at that time, you may want to consider offering all of those as a bundle to your ad sponsors, instead of a per platform agreement. And some of you might be doing that already right now. But in the case of a recession, you're going to want to try to make things look as good as possible in order to stay on the roster, if you will. The good news is that podcast advertising is still very affordable. Fans are typically very loyal. And podcast advertising is typically pretty easy to track through downloads, promo codes, unique links, those kinds of things. That said, it's a lot easier for a brand to bail on a marketing budget with a number of podcasters or podcast networks than it is for them to cancel a national network ad buy. I've been there. And we've had to do that in the past. And it is difficult. Podcasts are also a lot less easy to track than some other digital platforms like search and social ads.
Fuzz Martin 6:16
But I don't want to be all doom and gloom. That doesn't mean that it's all going away. If there's a recession, you just need to be on the lookout. So if you start hearing more about big brands canceling their podcast ad plans, if you start to hear no from partners who typically tell you Yes, or if you know, we enter into a full blown recession, you'll know it, then you're going to need to be more flexible, prepared to offer more information about your audience and your show's performance. And look for creative opportunities in the market to connect brands with your audience. And hopefully, none of that happens. But if it does happen, I hope you'll be prepared.
Fuzz Martin 7:00
Thanks for listening to today's awesome, fun, uplifting episode of Good Morning Podcasters. If you have any questions for me, you can email a fuzz at Good morning pod.com that is firstname.lastname@example.org. Follow the show on your favorite podcast player. I see a lot of you listen on overcast. Thank you. new episodes are available Mondays, Wednesdays and Fridays. And with that I'll talk to you get on Friday. Right here on Good Morning Podcasters