On Wednesday I had a discussion with my partners from Adlateral and German Über-Podcaster Alex Wunschel about the difficulties of monetizing German podcasts.

We quickly agreed that the size of the market (maybe just about a quarter of the US in reach) cannot be the reason. Advertising financed media works all around the globe no matter how big or small the market is, no matter if the market is defined by language, distribution, geography or any other parameter.

We saw the reason somewhere else: It is not the lack of reach itself, but advertisers not seeing the value of the reached audience, not seeing the potential of reaching a particular audience.

On the one hand this has to do with who a podaster is talking to, which has to do with who listens. Here in Germany a lot of this business goes through media buyers. Media buyers are - well, need to be - spreadsheet driven. Of course they not only look for reach, but also for the right audience. But in the end of the day, all they want to do is buy lots of advertising space for the least money.
On the other end we have a handful of marketing agencies that sell this advertising space. Either because they work for one of the bigger publishing houses that do downloadable media now, or they aggregate podcasts. Again spreadsheet driven, again selling inventory for as expensive as possible.

All negotiation is about CPM.

The negotiation should be about something else: How do you - the advertiser - get your message across and how can I - the podcaster - help you.

Most podcasts over here are not ready for simple ad placement. But they have a very committed audience. This commitment needs to utilized. And yes, creativity needs to be involved, and yes this doesn’t make things easier.

Of course this is nothing new. This model has been around for a while, sometimes called sponsorship.

Nevertheless, realizing this helped us to focus. Focus on who to approach. Focus on what to offer. Maybe this makes monetizing podacsts a little easier now.