CBS Radio and Walt Disney's ESPN are joining a handful of companies that will promote podcasts to advertisers at the Interactive Advertising Bureau's first podcast upfronts next month, executives told Reuters.
As consumers increasingly use mobile devices for content, media companies are turning to podcasts for potential revenue with advertisers often paying a premium for them.
Podcasts are a small, but growing part of the digital media marketplace with a wealthy, tech-savvy group of listeners, said Larry Rosin, president of Edison Research, a Somerville, New Jersey-based market research firm that serves media companies.
"They are more likely to have the tools and toys that make downloading podcasts easier," Rosin said.
While media companies and investors are concerned about viewers turning away from traditional television, 17 percent of teens and adults listened to at least one podcast per month, up from 15 percent last year, according to Edison Research.
Television broadcasters developed upfronts or a group of meetings to promote new shows and lock in commitments from advertisers, and over the past few years IAB developed the "Newfronts," which are upfronts for the digital video industry.
Now IAB is testing out if there is a market for podcast upfronts, said IAB Vice President Carl Kalapesi.
CBS Corp's local digital media unit this year launched original content podcasts including pro wrestling talk show "WOOOOO! Nation" in a new division, play.it. Its audience rose 30 percent since January and revenue is up double digits, said division president Ezra Kucharz.
ESPN is seeing digital and traditional radio growth, said Traug Keller, ESPN senior vice president of production business divisions. This comes at a time when ESPN is seeing a decline in television subscribers, a move which has unnerved many media investors..
More broadly, while traditional broadcast radio revenue overall is declining, digital radio ad spending is expected to be $2.75 billion this year, up almost 28 percent from 2014, eMarketer forecasts.
Podcasts make up small double-digit millions of that figure, estimates eMarketer analyst Paul Verna. "It's a blip on the radar... but its becoming a bigger blip," he said.
On average, the cost that an advertiser pays for a thousand impressions, known as the CPM, of a podcast is $15 to $30, according to Midroll Media, which connects podcast shows with advertisers. Meanwhile, the average CPM for radio is in the mid-single digits, according to analysts.
ESPN and CBS join NPR, WNYC, Panoply, Podtrac, AdLarge and Midroll as presenters for the IAB upfronts which will take place on Sept. 10 in New York.
(Reporting By Jessica Toonkel, editing by Peter Henderson and Bernard Orr)
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