Where do Podcasts fit in a company’s marketing communications strategy?

I’m a big fan of podcasts. I subscribe to 15 podcasts and listen to one or two a day during my commute. But as an MBA student I wonder about the business model behind podcasts and if they will prove to be valuable marketing communications tools, considering that they still reach only a small amount of users.

Some companies have been adding podcasts to their marketing strategy. News and entertainment companies have been using it as an additional source of revenue. BusinessWeek, for example, creates a weekly podcast by interviewing the journalists that wrote its cover story, and names the sponsor at the beginning. Other media companies use it as a promotion for its full, paid episodes.

Non-media companies have been using it as an entertaining and educational way to create customer loyalty. Lowes and Home Depot have step-by-step guides for do-it-yourself projects and using tools and gadgets around the house. Besides the obvious pitch for their products, podcasts are a way to become a trusted voice for consumers, especially if the podcast is targeted enough to reach a niche of followers that will find value in podcasts vs other media forms.

But podcasts are not necessarily cheap to make, especially for companies that are not in the business of making media content in the first place. Most companies that make them are careful about editing and have high quality videos. Most podcasts are also free, which means that consumers don’t pay for them. Companies have been trying to find creative ways to make a business model out of them, from joining a podcast network that provides individual podcasts sponsors to combining free and paid episodes and throwing in HD or other perks for paid subscribers. But the advertising model is not very profitable, according to a report published earlier this year by research firm E-Marketer.com. Podcasts come in 22^nd place in the list of most-viewed forms of online and offline media, and adspend is also very low. This could change in time, if podcast meet optimistic growth expectations and manage to move from a niche following into a more mainstream product.

Professional insights

To get some feedback from marketers who are actually using podcasts as part of their strategy, I began a discussion on LinkedIn. One marketer said she has found them especially useful for internal purposes like training and to explain complex ideas which would be difficult to understand in written form. Another professional said that it has been a good tool to create awareness about his business and get new customers. He says that podcasts have grown his business by 300% in the past two years (he says he measures growth through podcasts by tracking clicks on the links to his website and by asking new customers where they heard about the business).

In a coming blog, I’ll use podcasts as part of what I see as a successful internet marketing strategy for a company in one of the industries that I’d like to work in after my MBA: Consumer Goods.