Leo Laporte's Podcast Success Snares Major Advertisers

'TWiT' Ad Network Finds Benefits for Marketers and Listeners

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NEW YORK (AdAge.com) -- Leo Laporte didn't expect to become one of the largest independent podcasters when he began recording his conversations with former Tech TV
Tech news guru Leo Laporte is launching a podcast advertising network.
Tech news guru Leo Laporte is launching a podcast advertising network.
colleagues and friends John C. Dvorak, Patrick Norton and Kevin Rose. But it happened and this week he launched the This Week in Tech (or TWiT, as his fans know it) podcast advertising network, in conjunction with podcast advertising company Podtrac.

Podtrac measures TWiT's monthly reach at 500,000 and marks TWiT listeners among the highest spenders online and on software -- which is why the network has attracted Dell, T-Mobile and Visa. Mr. Laporte's podcast mini-empire could rake in as much as $2 million dollars in a year, but he told Ad Age Digital he's more concerned about how to not ruin the medium with advertising.

Ad Age Digital: You are up to 10 podcasts now -- how did you get to the point?

Mr. Laporte: Well we've got two more coming -- I won't settle until I'm doing a dozen [laughs]. The business is being invented as we speak. There's no model, you can't look to someone else and say how did they do it? It's not radio, not a website, but something unique. We've done it organically and as the audience wanted it. ... [For the TWiT crew] the podcasts are the after-hours conversation when you get together with others in the same field and swap stories collegially -- that's how we really learn. ... So a lot of it was done just for us and I realized a lot of people would probably want to feel like they were in on conversation too. ... It really wasn't meant to build a network and there was no plan to put ads on it.

Ad Age Digital: But that has changed.

Mr. Laporte: Originally we just asked for submissions, which covered equipment, website, office rental. But they grew and grew and grew and the audience grew and grew and grew. At some point the light went on and it was like building an audio version of TechTV, it was more like a network. I said, "Maybe this needs to be more than a hobby but maybe a business for those people who are doing it." So the goal has been to start monetizing it so we could start paying contributors. And that's where advertising really makes the difference.

Ad Age Digital: So now you ask people to donate -- like a paid subscription -- and you take advertising. Kind of like a magazine model?

Mr. Laporte: We're very much like a magazine model, where the paper and shipping would be paid for by subscriptions and then the ads pay the staff and help you make a profit. Unlike broadcasting every additional person costs us money [because of added bandwidth costs], which is also very much like a magazine. You do want growth but you have to think about what it's going to cost you. ... Actually, we're more like public radio where your listeners are your supporters but you have corporate donors who donate things like bandwidth and also advertisers or sponsors.

Ad Age Digital: Corporate donors?

Mr. Laporte: We've been lucky to find bandwidth donors in AOL and Cachefly. AOL gives us about a terra byte a day. ... I'll publish a podcast and none of the clients are polite. It's like you have 200,000 people standing outside your door and you throw the podcast out and they all jump on it at the same time -- the bandwidth spikes are huge. So when you throw it out at midnight on Monday, they all pounce. Podcasters really have a lot of challenges nobody else has had to deal with. It's not how many bits and bytes you use but how many in one minute. A video podcast that was really big took the service offline for 24 hours.

Ad Age Digital: How has your audience received the advertising?

Mr. Laporte: There's some pushback from audience, which includes a lot of tech enthusiasts. A certain percent of them think we should be doing it for free. But we're not the free software movement, we're trying to create a product. ... I'm an old radio guy and like the old-fashioned radio model, with the host doing the ad live in the program, like Paul Harvey, Charles Osgood ... it's folksy, less intrusive, gives advertisers great benefit because it's endorsement, it's us saying we like Dell. And it doesn't feel like an ad. It carries more weight. Americans kind of get it because they've heard Paul Harvey but in the U.K. they don't do this. The U.K. listeners are going, wow, we've never heard this before. When they do an ad they do all interstitials. ... But two commercials is as much as we'll ever run. I don't ever want to have more than that -- one, to make audience happy and two, to give the advertisers more value.

Ad Age Digital: It sounds like you're very concerned about preserving podcasting for both listeners and advertisers. Could one greedy podcaster that takes tons of ads ruin the medium for everyone?

Mr. Laporte: People look at what we're doing at TWiT to see what makes sense and I'm aware of that responsibility. I'm delivering the keynote at Podcast Expo and I'm going to address it. Podcasters are pretty independent-minded ... but all podcasters agree that podcasting has more value than radio or almost everything and we deserve a high cost per thousands [of listeners] and are going to create an environment that's worth it for advertisers. We don't want to jam it for advertisers. And the audience will let you know -- they're not passive. It's more of a conversation than a monologue. ... We need to hold the line and really deliver quality advertising. It's going to be hard at first, [podcasters will have to be] turning down advertisers, running fewer ads than you'd like, not take in as much money as you'd like. But if we can focus on delivering something of value we can make both advertisers and listeners happy. It's a great opportunity and you don't get a new medium very often.

Ad Age Digital: Do you think podcasts from mainstream media companies will exercise enough restraint in the advertising area or could they screw it up for everyone?

Mr. Laporte: I hope they screw it up. I see them as using podcasts to drive to their bread and butter. We're narrowcasters and they're broadcasters and there's a big difference. "Ask a Ninja" wants to be "Seinfeld" but people like me and most I know are narrowcasters. We want to super-serve an audience and develop a relationship. [Broadcasters] see themselves as delivering a lot of people to advertisers and inefficiently. But those days are drying up. There will always be the Tides and Coca-Colas who can afford that but most companies in this modern world need to be efficient and they can be by using these new technologies.
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