Digital Media

From airwaves to MP3: Podcasting makes liftoff

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No longer just the underground offspring of amateur DJs and enterprising techies, podcasting boasts a roster of major blue-chip endorsers.

Kraft Foods, for example, offers up hundreds of recipes using the iPod's text function, IBM podcasts small-business tips and riffs on technology's future, and Nestle Purina publishes content on animal training and behavioral issues. Volvo sponsors podcasts on Autoblog, Absolut buys ads on Pod Show programs.

For a technology that's barely more than a year old, podcasting has penetrated virtually every medium-radio, TV, print and interactive. For radio, podcasting's closest cousin, it's a way to time-shift material or offer content that stations don't have room for on the air. Podcasts available from Infinity Broadcasting's 1010WINS, for example, have ranged from Stanley Bing commentary to extended behind-the-story audio from Hurricane Katrina reporting.

It's a way for radio stations to expand content, says David Goodman, Infinity's president-marketing. "Radio produces more original content than any other medium ... This gives us an outlet that goes beyond the airwaves."

Even print properties are exploiting the ability to download content onto an MP3 player-Business Week recently unveiled its podcasting platform with ad support from Sun Microsystems, via Starcom USA, Chicago. The podcasts, available at businessweek.com, highlight the magazine's top stories and feature exclusive material. Sun runs a 15-second audio ad promoting its new Galaxy server.

BREAKTHROUGHS

"I'm looking for media that have more breakthrough power," says Rhodes Klement, Sun senior director-brand and advertising. "Print is a medium that is tried and true-it's been around for a long time. I'm looking for [channels] that have a clear call to action."

Like the early days of the Internet, there's no established pricing model for podcasts. Instead, they tend to be part of a larger media buy. Where the ad dollars come from most often hinges on the source of the podcasting opportunity. If an opportunity stems from a radio operator, such as Radio Disney or ESPN, which both offer regular podcasts, "that's probably going to sit in a radio world," says Natalie Swed Stone, U.S. director-national radio for OMD, New York.

Occasionally, a marketer earmarks dollars for emerging media opportunities. Mr. Klement sets aside about 10% of his media budget for what he calls "R&D." (Sun spent $7.4 million in measured media in 2004, according to TNS Media Intelligence.) While some of the R&D initiatives can fail, Mr. Klement says, "if you want to be at the cutting edge, you have to be willing to try these things."

"It's a combination of the best of the Internet and the best of radio," says Ron Bloom, CEO of Pod Show, which offers advertising through its network of 7,000 podcasts. "People are enjoying it away from the computer, but they know exactly where to go for more information."

A DIRECT RELATIONSHIP

And that, says OMD's Ms. Swed Stone, will be the key to getting at podcasting's return on investment. "You have to look at it as a direct relationship as opposed to reaching thousands," she says. "The one thing we don't have right now when we advertise to thousands is the knowledge of exactly how many heard it and who responded."

In the radio world, ad-supported podcasts are still few and far between. Earlier this year, Infinity unveiled KYOU, a San Francisco FM station coined "open-source radio" and programmed solely by podcasts, supported by Vox vodka, among others. Clear Channel Radio's podcasts-popular morning show sketches or proprietary talk content-are sponsored by Virgin Mobile.

But signs are promising. A MediaSpan study found 11% of those who visited station Web sites downloaded podcasts at least monthly. Talk formats boasted the most active podcast listeners.

Radio Disney has found success with its "Disney Insider" podcasts featuring music news and artist interviews. "Podcasts give us a real opportunity to be more flexible and create more customized content for sponsors," says Sarah Stone, VP-marketing at Radio Disney.

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