Q&A with Jeremy Deal | 1Q 2021


April 19, 2021

Jeremy Deal of JDP Capital Management shares an internal interview with Matthew Drengler from Podsights, as part of the frequent quarterly interviews they conduct in areas of interest in and around their portfolio.


0:00 – 6:00: Introduction to the Massive Podcast Opportunity – 78% of US adults are familiar with podcasts, while over 1/3 listen to podcasts weekly. Despite this level of engagement, podcast advertising comprises only $1bn or 0.3% of US advertising spending.

6:00 – 7:55: Money in Motion – Where is the podcast market today and why is the opportunity in podcasting so large?

7:55 – 10:30: Solving the Attribution Bottleneck – Attribution is complicated, but technologies such as pixel-based attribution are helping to decipher the podcast value chain.

10:30 – 12:55: Digitizing Frictions to Buy Will Accelerate Podcast Ads – Ad sales are currently executed by people with spreadsheets, but sales are converting to programmatic which should dramatically increase volume as it did in display/digital media advertising.

12:55 – 16:18: How Do Creators Utilize Platforms Such as Megaphone to Sell Ads? – Platforms such as Megaphone help digitize advertising inventory. Digitalization of inventory facilitates the automatic sale of large chunks of inventory that publishers cannot fill on their own. It also creates audience-based targeting that can be solid direct to marketers.

16:18 – 20:15: How Does Targeting Work in Podcasting? – Podcasting uses unique identifiers such as IP addresses to know general approximations such as household income and male/female. Companies that can aggregate, scale and sell large audiences have huge advantages.

20:15: – 25:17: How Fast Can Money Flow into Podcast Advertising and What is the Tipping Point? –The likely tipping point is building out programmatic advertising exchanges. Enabling a digital inventory exchange by a “click of a button” will accelerate conversion of dollars just as it did in display/digital media.

25:17: – 26:50: What Exactly is “Programmatic Exchange” – A real-time ad bidding platform that aggregates inventory from multiple publishers to meet the demand of ad buyers.

26:50: – 27:48: When Will the Podcast Programmatic Exchange Be Built? – Likely in three or fewer years. Publishers still have some diverging views on if their inventory is fit for programmatic, but this could change as programmatic exchanges are built out.

27:48: – 32:47: Who are the Biggest Podcast Players and What Advantages Do They Have in Programmatic? – Spotify, iHeartMedia, SiriusXM and NPR are the top current podcast platforms. The platforms that can acquire content and technology have large advantages in scale. In addition to scale, platforms that can manage around new privacy regimes will be critical. As large tech players such as Apple and Google re-draw how advertisers use their platforms, having a direct customer relationship becomes key. The “Walled Gardens” win because their unique audience identifiers increase in relative value to those platforms that must rely on Google or Apple to identify audiences.

32:47: – 39:07: What Happens After the Programmatic Infrastructure is Built? – Many of the same targeting methods that are well established for digital media will work in podcasting. Some new forms of targeting may also emerge such as “contextual-based” targeting. The net effect of these changes will bring down pricing of podcast ads, however, volumes will increase by orders of magnitude. Podcasting will differ slightly from digital media in that “embedded ads” or “host read” ads will also likely scale. The overall mix of programmatic and these embedded ads is still in flux.

39:07: – 43:54: How Big Can Podcasting Advertising Market Get? – Podcast media will likely win market share from linear radio, but also other media channels as measurability improves. Long-term, the industry can potentially grow to 10x its current size over the next 5-10 years.