CES 2020: Trends and Takeaways from NPM COO Bryan Moffett

 

 

 

 

Last month, thousands of marketers, advertisers, technologists, business leaders and industry professionals gathered in Las Vegas for CES, a global conference on consumer technologies. In addition to appearing on a number of panels at the conference, National Public Media COO Bryan Moffett was on the ground at the event, talking to marketers and agencies about trends in voice and audio. From the rise of voice activation to the importance of authenticity in an increasingly crowded media landscape, read on for Moffett’s key takeaways from CES 2020.

Audio is definitely having a moment

It’s a common headline these days, because it’s true. There’s been a resurgence of interest in all forms of audio, and specifically spoken word audio. NPR and Edison Research began tracking the spoken word space last year and found the share of time spent listening to spoken word audio listening has grown 20% since 2014, mostly at the expense of listening to music. 

Marketers are looking to create better connections with consumers, and audio is a natural fit. Radio remains a massive medium that reaches 9 out of 10 Americans each month, and continues to offer efficiency and reliability to marketers. Public radio especially can be effective for marketers: NPR and Neuro-Insights found that radio sponsorship on NPR is 23% more memorable than traditional radio ads. Podcasting and on-demand audio also can build deep engagement through the intimate nature of the format and the high affinity listeners have for the hosts and the content.

On top of all that, there’s huge momentum in the world of voice, particularly Smart Speakers and voice assistants. NPR and Edison Research regularly track Smart Speaker adoption with the Smart Audio Report, and the 2019 holiday season saw ownership hit 24% of Americans 18+ with an average of 2.6 devices per household. More important, 54% of the U.S. population has used a voice assistant of any type, indicating a rapidly increasing level of comfort with the technology.

Authenticity is key

Radio can get a bad rap due to high ad loads and the need for ads to rise above the fray. That’s not necessary in podcasting or on-demand audio. Podcast ad loads remain very light compared to commercial radio — the average ad load in a podcast is just 5.1%. Since listeners can easily skip annoying ads, and marketers must match the tone and style of the shows. 

During a panel hosted by Dentsu, my colleague Gayle Troberman, CMO of iHeartRadio, said that marketers want to start a conversation, and on-demand audio is perfect for that. We find the same with NPR’s podcasts. A recent podcast sponsorship campaign for a large cloud-based business service nearly doubled awareness of the product, from 27% to 51% for exposed listeners. We regularly see lifts in awareness, favorability and intent to purchase among NPR podcast sponsors.

2020 will be the year of attribution for podcasting

During “Podcasting in Hollywood: Leadership in the Industry,” a panel I participated in at CES, PodcastOne CEO Norm Pattiz declared 2020 would be the year of attribution for podcasting, to broad agreement from myself and others on the panel. New vendors like PodSights and Barometric are finally providing real attribution for podcast campaigns, giving marketers a clear understanding of the percent of people who acted on their ads. Combine that with much more robust targeting capabilities, and podcasting becomes a modern marketing tool on par with other digital offerings. 

At NPR, we have seen conversion rates as high as 6% when using attribution tools on podcast campaigns. Creative approach, frequency and product alignment with the audience all contribute to success, but nearly every campaign we have measured showed very encouraging results, typically 1% or higher conversion rates. The work around attribution has only begun as it’s largely limited to dynamic podcast ads, and the services are expensive, but that will change quickly.

Data and privacy still present challenges

While attribution tools and targeting are very welcome additions, they come with challenges. Because podcasting grew up outside of the world of cookies, it’s been insulated from some of the privacy issues anchored in the display world. But that is changing.

Most attribution or targeting capabilities in podcasting leverage the IP address. While there’s broad agreement on how to manage user privacy around cookies, which are one-to-one tracking devices, there’s less clarity on how IP addresses relate to user privacy. Often, all devices in a household will share an IP address, and likewise all devices behind a corporate firewall. In the mobile world, devices typically inherit the IP address of the nearest cell tower. 

This helps protect against the one-to-one matching of cookies, which could be exploited to backtrack to a specific customer and exploit  their personally identifiable information. On the downside, this puts podcasting in a gray area when it comes to consumer tools like opt-outs and compliance with GDPR and the California Consumer Privacy Act. 

This is an area where podcasting will have to grow up, and fast. At NPR, we are confident that the tools we use respect user privacy and are not creating loopholes. We don’t ever sell data, and we never collect personally identifiable information. But consumers need the same ability to opt out of tracking in the podcast space as they have in the display world, and that should be a focus for the industry in 2020.

The brands are here

And finally, 2020 should be the year that most podcast publishers shake off the legacy of relying primarily on direct response marketers. At NPR, I was very happy to see our largest podcast sponsors so far in our fiscal year 2020 are heavily brand focused. The top five by spend are Fortune 100 companies, and I had to go down to #15 on the list to get to a “typical” podcast sponsor. 

That’s not to say the big direct response supporters of podcasting are gone; far from the case. They are still here and still spending and still renewing — because it works. But larger brands and Fortune 500 marketers are taking a keen interest in the power of audio, and that’s a very healthy thing for the medium.

CES 2020 further reinforced my belief that the excitement around audio is both warranted and real. At NPR, we’ve had the luxury of decades of leadership in spoken word audio and well-know its benefits and deep engagement with listeners. It’s good that the rest of the media world is waking up to this opportunity.