The Business of Podcast Advertising

Business Brain Episode 577 for Wednesday, August 28th. Crackers over the Keyboard Day 2024 Greetings, folks, and welcome to Business Brain, the show where we take a couple of ideas, maybe even a few ideas, sometimes just one idea. We crunch it, we dissect it, we analyze it, we use it to tune our business brains each and every time we get together so that we can beat the system and keep on living those charmed lives. Here in Durham, New Hampshire, I'm Dave Hamilton.

And here in Northern California, I'm Shannon Jean. I've kind of got the floating head thing going today. My shirt almost matches my background. So if you're watching the live stream.

Yeah, it doesn't really matter. Most people aren't.

Yes, that's true. So it's okay.

Yeah, it is. Well, it's okay.

We'll get that out in editing, I guess.

Right? Yeah. And I wanted to say, you know, as I was introducing the show and I mentioned Crackers over the Keyboard Day, I saw a question mark on your face. And I'm sure there are other people with question marks.

I don't know.

I do this every episode, as you've probably noticed, unless this is your first episode, in which case, welcome. Also, I do this in the intro of every episode, and I link to the explanation or history of that day in the show. Notes at BusinessBrain show. So if you want to learn more, you can. Crackers over the Keyboard Day is really just a day to embrace doing something that is generally seen as, like, dangerous or whatever. Today you can do it. You don't have to worry. Just do your thing. And you know what? You can shake your keyboard out afterwards and everything's going to be fine. It's all going to be fine. Got you.

I like it. I like that idea.

Yeah.

You're just getting back. Yeah, we. We recorded last week's shows early because you were out of town at Podcast Movement. And I'd love to learn more and tell us what that. That show's about. And I think you also have some other stuff to show.

I have some news, potentially. So definitely I'm gonna. If we do talk about the news, it's gonna be the earliest I've ever talked about something that we've done internally in. In public. But I'm probably gonna talk about it. Cause I'm super excited. So Podcast Movement happens twice a year. The summer show is ostensibly more for podcast creators than there's sort of a spring or winter show that's ostensibly more for the industry right now. People are kind of in a. In a. In. There's some confusion over all of that. So a lot of people that are just industry folks go to both shows anyway.

Okay. When you say industry folks, like the advertising side of it.

Advertising side, the ad agency, the.

I see promotions stuff.

Yeah, the, the. The sort of people in the picks and shovels business that, that cater to the advertising side, like the ad tech folks. Those. Those people are there, but also the creators are there, the podcast, the people who are podcasting, the people who are building like the picks and shovel business for podcasters, like hosting and. And, you know, tools and that sort of thing. So that's cool. So, yeah, and I actually spoke at this one. I gave a session teaching my workflow, how I created this workflow and really honed it over the last 20 years to where we're able to publish the show very quickly after we finish recording, with the goal of being able to release consistently because we know that. How valuable that is.

Right? It's. Yeah, because it. It that bias to action and get things done. There's no steps. You don't have to send it out to someone to edit it. You don't have to spend extra money to have it done. Creating this easy workflow. It. You know, there are definitely multiple steps to it, and Dave does some and I do some. But you know, truly, within a half hour after we. We create this content, it's in the pipe and ready to publish.

It could be released immediately or effectively immediately. We. We choose to batch it just because of the way our mutual schedules work and, and the way we found the show works best, but we certainly could just release right away. And that was the goal because I knew it's cool. I knew when I came up with this, when I started podcasting, somehow I knew that release consistency was important, probably from our publishing of articles on the web with Matt.

I remember you. I remember you telling me that 10 years ago.

Yeah.

You're like, we have to do it. You have to pick a day and we have to do it every single week. Like you said religiously. And you know, you hold each other accountable. That's why I'd love having a co host, because same. There's no chance you're not going to do it. You know, it's like, oh, I have to record early or we have to ship around, shift around. But we are publishing episodes this week.

And every week, and that's the expectation. And. And we. It's the expectation on ourselves because we know it's the expectation on you. The the hardest thing to do is to attract one of you listeners, and the easiest thing for us to do is to lose one of you. And so we want to make sure that we do our best to not lose you as a listener. We understand that we're going to lose some of you. Like, it's how it goes, but we don't want it to be our fault. Like, yes, you know, something easily solved. So. So anyway, so I gave that presentation there. I also met with a bunch of podcasters, some of whom we might bring into the backbeat media family because we represent podcasts. And then, of course, I also met with sponsors and advertising agencies who represent sponsors, some of whom were new. And that's. It's great to develop a new relationship there because that could be another avenue for sponsorship, which means another revenue source, but also just what I call relationship maintenance, where there's people in the industry that it's good to see and make sure we're doing what they're. You know, there's a lot of people that I met with last week that I've worked with for years. I would have. If you asked me before I went, do you need to meet specifically with this person or this person or this person, you could have picked like 10 of them, and I would have said, no, I don't need to meet with any of them. But it's just good to just, you know, oh, yeah.

See, we've done episodes. We've done whole episodes on trade shows and the power of them.

And, well, I would say eight of those 10. The conversation opened a door that would not have otherwise been opened. Either, hey, we need something different from you, or, hey, we have an opportunity that we haven't talked about. Don't know why here, let's talk about it. Like, those kinds of things. So, yeah, yeah, I think that, yeah, that's huge.

I think especially with this kind of work, you know, so many people that work from home. These shows are. I may have a renaissance of becoming hubs, if you will, of people being able to get together and let those ideas and opportunities percolate. Be interesting.

Well, and that was interesting. I a the sort of the second topic that I alluded to at the beginning. It's something new that we're doing. I've been thinking about for a long time. The podcast industry has a privacy problem, specifically when it comes to ads.

Okay.

Just like on the web. In fact, it's exactly like what happened on the web. And I'm shocked that we're repeating this bit of history. So Soon. But we are the. What the podcast industry wants to do and is doing at some level is they want to be able to track the, the people who listen to the podcast.

Sure.

And when there's, when there's an advertiser in that show. And then they also track the people that visit the advertiser's site or app or whatever it is that's being promoted. And then they want to relate those two together so that they know if the ad was successful at driving traffic without having to rely on a coupon code or a businessbrain show. Whatever. URL. Yep, exactly. And we had this conversation on the web 20 plus years ago where we had the same problem with banner ads. People were obsessed with clicks and it's like, yeah, but if somebody sees your ad they might still buy your product. Right. And Ziff Davis came to me1day 22 years ago on the web.

Are they still around?

I don't know.

Ziff Davis.

I don't think so. But I know what the most valuable asset on their balance sheet was the day that they sold off their assets if they're not still around. And it was the data they collected because they came to me and they said hey, we know you have this problem. People are obsessed with clicks. Do you know that not everybody that buys click through from your website. You want credit for that? We have a solution. They explain the same thing. We're going to put a pixel on the sponsors website that captures user agent, the type, browser type and version essentially and IP address. And we want to put the same thing on your website. This again pre podcasting 20 years ago. Want to put the same thing on your website. Captures user agent and IP address. And then we'll put those in a database and we'll relate them to each other. And when we see that user a wound up visiting your website and maybe four others and then bought from this sponsor, we know to give all five of you credit for that. Partial credit anyway for that purchase.

Okay. Yeah.

And it was like oh my God, this is amazing. Seemed like a good idea at the time. Where I should have asked questions. Shannon was when they followed that up and said for every. We want you to put this pixel on your website for all of your users. But and for every thousand users that visit. So cost per thousand cpm. M being meal, the French word for thousand. Cost per thousand cpm. We are going to pay you one dollar. And it was like whoa, like we were selling ads for $14. So it was like well that now like a dollar that makes a big difference. And we get to do it for the whole website. That's amazing. I don't know why I didn't ask why, because if I had, I would have known exactly why. Because they were. They were data farming is what they were doing. Yeah, Right. And then we wound up 15 years later with GDPR and CCPA and all of the privacy things, because where you.

Have to, you know, don't sell my data, don't sell everything.

Turns out that we humans, not you and me and certainly not our listeners, but humanity in general becomes irresponsible when we have access to this kind of data. It's just how it be, right? If not the person collecting it, certain the per. Certainly the person to whom they eventually wind up selling it.

Yeah.

And literally the same quarter that GDPR and CCPA were coming into like their own on the web was when the podcast industry people, you know, startups in the podcast industry, said, hey, we have an idea. And they called me. And it was the same conversation, except this time I'd had two decades of history and I was like, you know that this is a bad idea, right? Like bad, bad, bad.

You see where this leads to?

We've already seen it.

Y.

It's right here. And so we've said no on this show, on the other two shows that I do. And we're not alone. Lots of podcasters have said no because I, at Mac Observer, I calculated it, I sold the data of over 4 million people.

Yeah.

And it wasn't.

They sell. Yeah, yeah. And they sell it even though it's a kind of anonymized at some point. They triangulated.

Yeah, that's the problem is they can triangulate.

They sell it somewhere else and they go, oh, we can take that data, match it with this data. And they get a lot of private.

You know, suddenly they know, like if you go to a sponsor's website and buy a product, they have your name, your email address, your address, maybe your birthday, and they tie that to your ip. And now every. It's like, oh, that person listens to Business Brain. Or that person listens to. I don't know if there's a podcast called Bipolar Daily or whatever, but let's say there is. I don't want to be the one that. That like, outs your health issues. That's not.

Absolutely.

And yet.

That's right.

I got 4 million people on the planet to whom I've already done that. I'm going to go ahead and cap it there. So we haven't done this however, the temptation grows because more and more sponsors are pushing to use these pixels because it's like, wow, I can. And there's a couple of reasons sponsors might want to use the pixel. One, and certainly. Let's just jump to the extreme one, is that they actually want all the creepy data. Okay, well, I'm not going to help you because I don't agree with you getting all the creepy data. However, other sponsors are just like, hey, we just want to use it.

Yes.

To confirm delivery.

That's right. Yeah.

And that's totally fine.

We talked about the ad and the, you know, the conversion.

Right.

To see if the ad is any valuable or is that too much that.

That it's hard to do conversions and track it directly to the ad without putting the person in the middle.

Right, I see, I see.

But you can still track like the total number of conversions and you can interpolate and that sort of thing. And so I started thinking about this, and I've been thinking about this for a while, and I talked to people at Podcast Movement this week because of course it comes up and they're like, do you think you'll ever accept pixels? And I'm like, not until they're private pixels. And as soon as I said those words, private pixel, to someone, I was like, that's a nice term. I like that term. Could we create such a thing? Is there such a thing? And Shannon, on Wednesday night in my hotel room at Podcast Movement, I sat down with a blank piece of screen and I coded up the backbeat media private pixel. And it works. And how does it work so well? I want to explain how it's implemented first, because I think this is the most important part, the. The we will. I wanted to create this in a way that I could give it to podcasters to use for free. I don't want to make money from this.

Okay.

I certainly don't want to collect people's data from this. Yeah, right. But I want. I want people to be able to use it with as little friction as possible, and I want it to be implementable by the podcaster.

I don't want non technical type of.

Well, it might be a little technical ish, but I don't want them to have to rely on the sponsor to say, hey, we support the backbeat media private pixel. I want to put the power in the hands of the podcaster, where the podcaster says to the sponsor, we use the backbeat media private pixel. If you're okay with that and what that means and what it doesn't. Mean then great, I can put your pixel in as well. And really there's no pixels in podcasting because it's not on the web but it's redirects on your feed. So what happens now if an advertiser wants to track your listeners is they give you a, like a. You are a part of a URL that goes at the beginning of your downloadable file. So in our feed we put the link to the audio file that you're hearing right now.

Okay.

Okay. They tell you, oh, put a little redirect at the front of that so that it goes through the sponsors server or some data collector server first.

Yes.

And then it immediately redirects to whatever your download link is. Right. But got it. That redirect allows them to capture that data. And so I started thinking, well, what if I jump in front of that and instead of redirecting, because as soon as I redirect, like if, let's say and you could put multiple redirects on a show. Like if you have a tracker and I have a tracker and then there's the data file, I could have it go to your tracker and have your tracker redirect to my tracker and then my tracker redirect to the data file and we both get the data in theory. And so it was like, well, I can't put a redirect in front because if I put a redirect in front I'm still passing the person along to you. I need to be a proxy and I've built it and it works and but I know people are going to say, well we want IP address so that we know it's unique because otherwise all we see is the IP address of Dave's proxy server where you don't know. You don't know.

Yeah.

And I was like, okay, let me solve that problem. So what I do in our little engine is I, I see the IP address. We don't log it anywhere, but I see it in the session. Right. And so I take the IP address and I do a hash on it which is essentially a one way encryption on this. So it creates a unique ID and it can't be reverse engineered. I know some hashes can be reverse engineered, folks. This one can't because it uses a salt. And if you know the nerd stuff then that makes sense to you. So it's a one way thing and I pass that along. I also pass the user agent along. So if you're using Apple Podcasts, they know you're using Apple Podcasts. If you're using YouTube podcasts. They know you're using YouTube or Android or whatever that gets passed along. And then what I also get is, I know because I can see the script, can see your IP address that's running. And so the script can go and grab geodata, like, got it. You know, country in the US State, city, but region, you know, regional data, so that people can say, all right, well, I'm targeting someone in the Boston metro area or the San Francisco metro area.

That's cool.

And I pass all of that along in headers to them. So they get all the things that they say they would need from the IP address. A unique id, but location. They don't get the ip and they get the user agent, so they're able to see, okay, this is an Apple user, this is an overcast user, this is downcast, et cetera, et cetera.

Yeah.

And I have it working. I'm telling you folks this because A, I'm super excited and proud of what I built, and B, we're using it for this show to test. So I guess if you don't hear this, it means my engine broke and kept you from downloading it, but I don't think my engine's gonna break. Yep. I've been testing it on other things for about a week here. Well, almost a week. Yeah.

So that's awesome. I love it. So hopefully it would become a standard that the podcasters could use and to protect the privacy of the listeners and allow the advertiser to have as much. Have enough information to. To where they could confirm the ads are being shown or talked about that we are, you know, this much traffic is coming in from these sources and.

And here's who it is. Like, you know, in an anonymized way.

Yes.

Here's where these people are from, which is really all you're going to get from IP address anyway. And now. And what I love is we'll set this up. We already have it set up, as you can see. Don't start. You can look at our feed and see that I have, like, pp, cf, bbm, FM at the beginning because that's the URL I'm using for the engine. Don't use that for your own engine yet, because you'll see it'll fail. I've whitelisted certain podcasts from being allowed because I need to make sure the whole industry doesn't just grab my engine and crater it.

Yes.

So. So that's cool. But. But there is a way, and we'll put up once we like, there's a couple of steps here and we're definitely cart before the horse. One step is showing this to some of the powers that be in the podcast industry. And hopefully, and I am not good at this, Shannon, but I have some people helping me with this, hopefully getting buy in from the folks that might not otherwise like something like this. If I can get buy in from a couple of the tracking agencies, like, yes, here's what this does, here's what it doesn't do. You know, eyes wide open. That's all I'm looking for. I'm not looking to. I don't want to mislead anyone. I want people to understand.

Yeah. And what I like about it is this we talk about all the time. It's just the bias to action just to get it done, just to get it out there, start testing it. You're not talking about it for six months. In theory and this and that and the other.

It exists.

Like, hey, and I've got a podcast, so let's use it here and let's. If we can break anything and that's it. Mess around so that you know that. That's awesome. I love it.

Yeah. And then, and then I will put out instructions and we will open source the code that I've written to so that podcasters could use and spin up for free their own server where they could do this. And I'm intentionally being vague about where and how you would do that because it's. I. I know how you would do it. Right now, the one I'm running, I am running for free. So assuming this works, a podcast of a modest or even a fairly large, medium to large size could get away with doing it for free. If you got to pay, it's going to be $5 a month and then it's yours. It's all your things.

Cool.

Yep. But I'm intentionally being vague about some of the specifics because I need to polish it up.

That's great.

All that.

Sure.

Yeah.

I love it. I love it. Uh, do we have time to talk about another topic?

No, but good news, that means we have to come back on Friday, Shannon, and do another episode. So, you know, that's awesome.

Well, that's great. Well, thanks for hanging out. This is an interesting show in the sense, the technical part of it. And the. Again, I love the. Just jump it in. I'm going to write it, I'm going to create the code, I'm just going to put it in place and. And we're going to be using it within a week.

That's it.

That's the way to go.

We're using it right away. No, I didn't get much sleep on Wednesday night. But whatever, it's fine. It doesn't matter.

Price to pay.

I was excited to pay that price. Absolutely. That's awesome feedback at Businessbrain show. If you have any questions, problems to report. Otherwise, keep living that charmed life and we'll see you.

See you Friday.

On Friday.