Podcasters are letting software pick their ads — it’s already going awry

Technology

The podcast industry is working up to something big; you can see it in the acquisitions. All the industry’s major players have, over the past two years, acquired companies focused on one feature: inserting ads into podcasts.

Of course, podcasting has always primarily depended on ad revenue, so this incoming era has more to do with getting podcast ads to act like the online advertising we see everywhere else. Wherever there’s a website, there can be a targeted ad, and now wherever there’s a podcast, there’s the potential of inserting a targeted ad, too. Whichever company can make that transition happen the fastest, across the most shows, and with the best data, could not only recoup all those millions of dollars in acquisition costs but make more on top of them.

The industry is sprinting toward this programmatic advertising future. However, there are some obstacles along the way, and podcasters are already running into them. The Verge has identified multiple examples of programmatic advertising going wrong, according to sources who asked to remain anonymous over concerns of fraying industry relationships. Ads are showing up in places they shouldn’t, signaling not so much a death knell for the effort, but more of a warning that if the trend continues, early trust between podcast networks and tech companies could fall apart.

Last year, an ad for the TV show The Sex Lives of College Girls popped up on an American Public Media (APM) podcast it shouldn’t have been approved for: a children’s show, a source familiar with the situation tells The Verge. Separately, a science podcaster says ads for BP and ExxonMobil were inserted into their program, despite them explicitly blocking ads for oil and gas companies. In both cases, the ads were served through the Spotify Ad Network, or SPAN, which launched last spring. They were either miscategorized or presented without any sort of content rating. A Megaphone support agent, the platform that powers SPAN, told the science podcaster that BP’s ad was filed under the “other” category while Exxon’s was under “elections,” for example. In the case of The Sex Lives of College Girls, the ad failed to include an age-appropriate content warning. Meanwhile, another source says issues with broad categories are pervasive beyond Spotify. They’ve seen a cannabis brand categorized as an “herbal supplement” and an ad for cellulite-targeting injections under “beauty.”

Unfortunately, these categories are standard across the industry. They’re how ad companies and podcast networks, guided by the Interactive Advertising Bureau (IAB), label their content so everyone knows what they’re buying and receiving. Clearly, they don’t always work.

Prior to this programmatic movement, most podcasters and their sales teams peddled host-read ads baked into a show, meaning they were read, included, and never taken out of an episode. That changed with dynamic ad insertion, which still could work as a host-read ad, but instead of living in a show forever, the ads switched out, hence the “dynamic” wording. Then came programmatic, which relies on dynamic ad insertion with an automated twist. The big idea is advertisers can buy a number of impressions targeting a certain audience, and the ad serving technology will automatically carry out the order across shows and networks, finding the best audience for that marketing at the best price.

The IAB’s categories allow podcasters, who are now hands-off with their ads, to include or exclude business types, theoretically giving them peace of mind that an ad for a specific product won’t run. However, the categories are falling short and leading podcasters and networks to think twice about participating.

After the Sex Lives of College Girls incident, APM opted out of Spotify’s programmatic network for both its kids and adult programming, a source familiar says. The science podcaster hasn’t turned their back on automatically inserted ads yet but could if the issue happens again.

“In order for me to take this deal, I need to be able to know that I can ACTUALLY exclude the stuff I don’t want to advertise on my show,” they say over DM.

“We definitely see folks miscategorized,” says RedCircle CEO Mike Kadin, whose platform relies on SiriusXM’s AdsWizz ad inventory to fill programmatic requests. “I have no view of whether that’s intentional, or just mistakes, or whatever, but it definitely happens, and there’s too [many ads], even at our size, for us to manually review every ad.”

Some ad serving networks, like Amazon’s Art19, do manually review new advertisers’ content, according to a source familiar with the platform, which requires humans to listen to a lot of audio. It’s unclear how Spotify handles incoming ads, however. We reached out for comment, as well as details on who categorizes the ads, but haven’t heard back.

Taken together, these incidents might not sound all that damning — some ads showed up in places they shouldn’t have — but in an industry famous for its close ties between advertisers, hosts, and listeners, it’s a problem. (Imagine a cannabis ad showing up in a podcast for recovering addicts, for example, or one for cellulite injections in a program about eating disorders — not good.) At the same time, the industry’s future, or at least big platforms’ space in it, hinges on this technology. If it fails, those big podcasts deals, and the hype, likely fade away.

There are few solutions to address these issues. Even if podcasters wanted to wholly block a specific advertiser, for example, it can be difficult because the technology looks at the ad’s registered domain name, which might not be the brand itself, Kadin says. Plus, ads can be swapped in and out quickly, making it difficult to trace back where and when something occurred. The system isn’t always straightforward, and ultimately, opting into programmatic will likely come down to what’s best for a specific show’s listeners.

“If your audience is very sensitive, this might not be the best solution for you,” Kadin says. “And if your audience is just used to the idea that the podcaster doesn’t choose the advertiser, then that’s also fine.”

That’s likely not the way most audiences think of podcast ads, at least not yet, which presents a problem for platforms trying to make programmatic happen. The podcast audience is lucrative because listeners often pay attention to and act on the ads they hear. If they stop doing so, the industry could become less appealing. Someone has to give: either the podcasters who believe their audience can get used to hearing ads the hosts themselves aren’t vouching for, or the listeners who, if display ads are any indication, might start ignoring the ads altogether.