Fn 6: The Wild World of Podcast Ads

"Everybody thinks it was Serial to spark podcasting again. I really think it was the other way around." — Francesco Baschieri

Squarespace. Mailchimp. Casper. Blue Apron. If you're a regular podcast listener, then there's no doubt you've heard ads from these companies, among many others. Podcasting's reach has grown exponentially over the past few years, and companies like these are spending millions of dollars to reach listeners whenever, wherever and however they tune in. But is this truly effective? What type of ads work best? And if you're not a podcast from a big media organization, how can you can get a piece of the pie?

This week on Function, we examine the world of podcast advertising. Anil sits down with Francesco Baschieri, president of Voxnest, and talks about some of the trends and technology behind podcast ads. We also hear from New York City podcasting duo Jade + XD and pull back the curtain on advertising and monetization from an independent media perspective.

How does podcast advertising stay ahead of tech like adblockers? What happens when an ad is automatically placed in your podcast by the network that goes against both the host and the audience? You'll find out the answers to all this and more on this week's episode!

But first, a word from our sponsors....

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Big thanks to Microsoft Azure for supporting the first season of Function.

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Transcript

Anil Dash: This podcast is brought to you by me. Me! Me saying why the hell does every podcast have the same three ads on it? To learn more, keep listening to this episode of Function, and you don't even have to use promo code "function" to find out how it works.

Welcome to Function, I'm Anil Dash. This week we're talking about advertising on podcasts, but this is on everybody's mind. Even just a couple weeks ago on SNL they had a skit where they were talking about podcasts and they went straight for how advertising works.

Speaker 1: Live from the MeUndies Theater in Portland, it's The Poddys.

[...]

Speaker 2: Here are the nominees for Most Jarring Transition into a Sponsor.

Speaker 3: The preppy liberal podcast "Bros Save Politics".

Bro #1: Fascism has arrived in America, okay?

Bro #2: Yes, crazy!

Bro #1: And the country is over!

Bro #2: It's done! Now let's talk about Shari's Berries. Mail your mom some fruit?

No, for real though...what we're going to do this episode is get into how podcasts pay the bills, why we keep hearing about those same mattress ads or whatever it is on every episode we listen to, and how do those ads end up on these podcasts in the first place? And to do that we're going to talk to Francesco Baschieri who is the President of Voxnest — no relation to Vox Media where we do our show — and Voxnest provides a lot of technology people use to create and listen to podcasts. They run networks like Blog Talk Radio and tools like Spreaker. And Francesco is going to take us deep into the world of how ads end up on our podcasts in the first place.

And then after that, we're going to talk to Jade and XD from Jade+XD, The Blackest Show About Nothing, and they're going to tell us what the vision is for podcasters themselves to be able to pay their bills, what does it take for them to get ads, what does it take for them to know who the advertisers are going to be, and when they get ads on their show is that the ads that they feel they want their listeners to hear.


"Most of the ads that you listen to on podcasts today are inserted dynamically using the same exact technology. It's just that the spot is recorded by the host himself so you don't really hear the difference." — Francesco Baschieri


AD: Francesco, welcome.

Francesco Baschieri: Thank you for having me.

AD: Now, so for folks who don't know, can you tell a little bit about what Voxnest is and how you came to be part of that company?

FB: Yes. Voxnest is a technology company. We develop software solutions for professional podcasters. Basically this means we develop the software that enables people to create, distribute, measure, and monetize a podcast or a spoken word audio show. The company started officially at the beginning of this year, and the first thing that it did, it acquired two existing companies in the podcasting space, one of which was called Spreaker. And that's a company that I founded and that's how I came to be part of this company.

AD: So you guys sort of bought up along with another pretty popular tool platform for podcasters and they're all part of Voxnest now. So they're saying, "Okay, we're going to build all the tools that podcasters need." And I think we can understand, okay, tools for recording, tools for distributing, that makes sense. And then you talk about monetization which is the industry term for being able to put ads on your podcast.

FB: That's correct.

AD: And what are the ways that people put ads on a podcast? Because it seems like it might be easy, right? I get a thing to read and it says, "You should buy this mattress" and we're done, right?

FB: That's correct and that's basically how 90% of the money in this business today works. I mea, there are people getting agreements via email and exchanging requests for proposal, negotiating a rate, doing the read within the show, and then collecting the check. It's great. The caveat is that this only works well in an economically valuable way for large shows, which is probably 1% - 2% of the shows out there.

AD: So you've got to be a big giant huge hit if you're going to make money that way. And everybody else, it would be pretty hard.

FB: Yeah, it's exactly what's happening today in podcasts. But it's not going to be like this forever, as we've seen the same exact thing in different media. So things are evolving and changing in podcasting as well.

AD: Francesco, let's talk a little bit about your background. How did you come to be in the podcasting space? What were you doing before?

FB: By training, I'm a software engineer and I came to be in the podcasting industry because roughly nine years ago, together with a few co-founders, I decided to start almost as a game a company that wanted to do something in radio. Not podcasting. It was 2010 and I was going around, pitching my company to investors, and every time I mentioned the word "podcast" they lost interest. They said, "Oh, this is so 2005; you should think of something else." So really, to be honest, we avoided using the word podcast until 2013 or 2014.

AD: And it came back in fashion?

FB: Everybody thinks it was Serial to spark podcasting again. I really think it was the other way around. Serial was a product of a technology change which was Apple releasing iOS 8 with the podcast app front and center; the nice purple button there. So that sparked people's curiosity. And by the way, there was already plenty of content out there, so when you click a button and you immediately get access to a huge archive of content, then you're hooked. And it's still happening today.

AD: So technology enabled the cultural leap forward.

FB: Yeah, I'm biased. Again, I'm an engineer so I tend to think technology first and content second.

AD: This is a show about the way tech influences culture so we'll buy that argument. So we see ads all over the Internet and we might know when we read a newspaper website that Google might have put those ads onto that page by using their systems. But in the world of podcasts, we have this relatively newer concept called dynamic ad insertion. Can you tell us a little bit about what that is?

FB: Dynamic ad insertion is basically a way to separate content from ads. So I have content living in one bucket and all the ads living in different buckets, as opposed to what happened before which was called baked-in ads. So ads were actually part of the content. Dynamic ad insertion allows you to make this happen at consumption time.

So let's pretend you're the content producer, you are the host of the show. You basically record your show and you know that there are like natural points where you want an ad to be inserted, but you just tape it or produce it or create it. In our platform, what you will see is a waveform spanning the entirety of your show, and the next decision that you have to take is where you place the ads and how many. You can place an ad at the beginning of the show, technically known as a pre-roll ad, one at the end of the show known as a post-roll ad, and everything in between is called a mid-roll without all the fantasy. So you only have to decide this and also give to the platform the constraints we were talking about. So I don't want any, I don't know, fast food chain advertiser or anything like that.

Behind the scenes, what happens is that people will consume your content. Your content will be consumed by a podcatcher trying to download an MP3 file through the feed of your podcast. When that happens, in real time, we're trying to figure out as much as we can about all these constraints, so where the request is coming from, geography, what content is the request hitting, what are the constraints by that producer, what are all the campaigns that can potentially be served into the content. So what we have is on one side a big MP3 file with your show, on the other side four or five small MP3 files with a 30 second ad, then we cut your file, we stitch the ads and the file into a single component, and we deliver it. But this is so fast that basically the whole process lasts for a fraction of a second and is repeated as many times as necessary in real time. Of course we keep pre-made content in a cache so that we don't do this too often, but at the end of the day, this is what we do all the time.

AD: Right. So now, if I look at media sites or news sites that I read out on the Internet, they've got ads that I know they didn't necessarily do themselves. Like if I go and I look at a pair of boots and I don't buy them, then every media site I look at for the rest of the day, that pair of boots follows me around and it says, "Don't you want to buy these now? You've got them in your shopping cart." So I know there's these systems behind the scenes where Google or Facebook or whoever are putting ads on all the sites I look at. But with podcasts, there isn't any of that, is there? Is there a way to track like who I am or to have that connection to what ads I see?

FB: Due to the nature of the podcast ecosystem today, so the fact that actually content is consumed through a plethora of applications called podcatchers out there, Apple Podcasts is probably the most famous...

AD: Right, so Apple Podcasts, Stitcher, Google Podcasts, those are all the different apps that people use.

FB: Yeah, exactly, that's correct. And the only component of the chain that has this information for doing this user tracking is actually the application installed on your phone. If somebody owns the application through which you are listening to a podcast, then the same thing can happen with podcasting, the same thing that happens today with video and with display advertising.

The thing is, today these apps are so many and owned by so many different components and there's no direct relationship between these apps and the content producers. So the ads need to be inserted some way into the show without knowing this information.

AD: So this is interesting. It is different than the pages we read on the web. This is something where...because there's so many different apps people listen to podcasts in and nobody owns the whole thing from the podcast creator all the way down to the listener, it's a much more sort of fragmented market and fragmented audience. And what's interesting, because it seems like one of the takeaways there, is then as a listener I'm less tracked. I don't actually have that same sense where like, Facebook knows everything I do on the Internet. But not with podcasts.

FB: Absolutely, that's 100% true.

AD: So that's nice, so I've got a little bit more privacy protection. But then if I'm putting on my hat of being somebody who runs a podcast, which I am, can I still make money? Is there a way to sell ads that's going to work for me even if I'm not one of that like 1 or 2% biggest hits? Like I'm not "this week's most favorite murder podcast", how do I still make money?

FB: Well, that's stuff that companies like Voxnest, for instance, are working on. The issue in making money out of shows is the fact that if you sponsor a product within your show most likely your audience is going to buy it. However, there is a threshold, a minimum number of listens per episode that you need to have in order to make this economically viablee. And today, this number is too high for most of the podcasts out there.

And the reason why there is this threshold, which is basically an on/off threshold, meaning that if you're above this threshold you're doing pretty good money, if you're below this threshold you're doing nothing as of today, is that the sales chain is long and it's made of humans and everybody needs to be compensated within this chain, right?

So even if you get high CPMs, and we'll talk about what CPMs are, but basically it's the money that you get for 1,000 listens of an advertising, even the CPMs in podcasting today are probably the highest in the advertising market? You cannot access this good stuff, these good buys, if you're not of a certain size. And the way to enable this for everybody is to leverage technology. So cut out most of these man-in-the-middle human stuff that's basically preventing you, the content producers, to get the money directly from the advertiser.

AD: So it sounds like in podcasts, the same-sized audience as you would see in a written website or something like that will actually have a higher ad rate, but you can only capitalize on that if you're one of the very, very biggest podcasts.

FB: That's absolutely correct. The advertising rate is probably 10 times higher than what you have in a display.

AD: Wow. So that's interesting. Because what happens is then you have the other 99% or 95% of podcasts that have no option to really make any substantial money. And one of the things you're looking at and people that do what you do are looking at is could we use technology to just insert ads into the podcast, almost drop them into what we're listening to.

FB: People tend to associate the technology that inserts the ad into the podcast with those cheesy ads that you normally listen to on a FM radio station. The technology is not the culprit here, it's just the creative stuff that's not there yet. I have to tell you, most of the ads that you listen to on podcasts today are inserted dynamically using the same exact technology. It's just that the spot is recorded by the host himself so you don't really hear the difference.

AD: So there's robots behind the scenes putting the ads in, but the ad that they're putting in sounds a lot better so don't mind.

FB: Exactly. And this happens with every major podcast out there, and the reason is very simple. Host-read advertising, host-read endorsements, are sold with a projection of the downloads or the listens of the episode within an one month period after publishing, right? Everything that comes after the threshold is not sold to the advertiser. So there's a huge opportunity with the archive, instead of leaving ads baked into the content there that would become stale at some point in the future, why don't you replace the ads after this 30 days period has ended and sell them to somebody else?

So potentially just try it. Download a podcast episode today, then wait for a month or something like that, re-download the same episode on a different phone maybe, and you'll see that a different ad will definitely pop in, but this ad will be actually voiced by the host.

AD: So for example, if you got a podcast, you have one of these ads inserted, it might be for a movie that's about to open, and a month from now the movie is open, it's already out of theaters. Because you've got this technology that can be updated and the host sounds like they're reading a different ad for something else the next time you listen to the exact same show.

FB: Absolutely. And back in the day there were even worst case scenarios like companies that were advertised that in the meantime had gone out of business and the ad was still there or coupon codes that didn't work anymore.

AD: That expired, right.

FB: Yeah, that expired. So this technology was born to solve a particular problem. Now, even if we have this technology and we potentially can do these kind of host-read promotions, the truth is that for smaller shows this is not feasible because there is always some kind of manual check involved. Advertisers and agencies want to hear an ad, listen to an ad before it's aired. So if you're creating something that can potentially go on 1,000 different small shows they will have to approve 1,000 different creatives, and if they don't approve them, there is some back and forth process or re-recording. So you can understand this is not feasible.

AD: Right. If you're an advertiser and you want to have your ad show up on a 1,000 different podcasts, you're just going to give them a canned, recorded advertisement. That makes sense. But what happens if one of those shows says, "I didn't really want this and the technology inserted it into my show, but this isn't the advertiser I wanted." Is there anything they can do? Is that a problem you can fix?

FB: Obviously there is protection on both sides of the marketplace. Content creators can choose what type of ads they don't want or basically disallow specific advertisers. On the other side, we also need to ensure advertisers that the content is brand safe, so they're connecting their brand actually with content which is not sketchy.

AD: So does that ever happen? Have you had shows where somebody says, "This is not what I want." And not even if it's sketchy, they're just like, "That's not a company that I like," and they want to turn that off.

FB: Obviously. I mean we have plenty of vegan shows and they would never accept McDonald's as an advertiser on their shows.

AD: Okay, so this is a normal thing you designed for and it happens every day and there's some measure of control.

FB: Yeah, the easiest part...I mean there's, let's say a drilled down list of categories. You can be very wide or very narrow in disallowing or disabling some categories. At the end of the day, the pickier you are the less money you're going to make because at some point we're going to run out of campaigns or potential advertisers. But there's plenty of fish out there.

AD: So if you're too narrow then it's going to start to cost you.

FB: I've seen people basically disabling 99% of the categories, hoping that they only get a very specific type, but the truth is there's just a limited number of companies that today are advertising on podcasts so you're probably not going to get any ads.

AD: Right. Well, on the other hand, if you want people to build websites or you want mattress companies or you want meal kits, you can probably find an advertiser on the podcast.

FB: Yeah, definitely. Yeah, that's a joke in the industry.

AD: So a question from the other side is, we're talking about at the high end, a podcast ad for the same size audience might cost 10 times what it costs to buy that same size audience on a print website, a written word website. Does podcast advertising perform 10 times as well? Is this a performance tied to that price?

FB: Yes, that's the reason why it's so high-priced. I would say so high-valued. The thing is, for a variety of reasons. Podcast listeners are engaged with the content. Actually the smaller the show, the more engaged the listeners are.

AD: So like a niche that they belong to and identify with.

FB: Exactly. So it's not a display banner on a webpage that you can basically skip with your eyes. You're forced, most of the time you're forced to listen to the content. It's 30 seconds and you're going to listen anyways. Our data tells us that people do not pull out their phone from their pocket just to skip 30 seconds ahead, because it would, at the end of the day...

AD: It's too much of a pain.

FB: Yeah, it will take them roughly the same amount of time to unlock the phone, open the app, and just skip the ad. So they just listen to it. However, since they're listening to spoken word and not music, their brain is turned on. It's not just something they're listening to in the background. So podcast advertising performs pretty well.

AD: Where do you think this goes next if you're an audience member listening to podcasts? Should you expect there's gonna be a lot more ads in your podcast? Or are they gonna be just more interesting to you? How does this evolve?

FB: Well if I'm an audience member, I definitely hope both. More ads mean more money in the business, which means more valuable content for me, and better targeted ads means these are less annoying.

AD: So what are some of the other things we should look for? Are people doing, so sometimes I see crowdfunding or Patreons or people doing subscriber-only podcasts. Is that a thing you think is gonna be a big part of the audience or is that more of a narrow audience?

FB: I don't have a crystal ball, but I think there's room for plenty of different ways to monetize content. The truth is that if you're producing a highly-produced show, something like a scripted show, well data says that it's probably more likely that you'll end up with a viable business model if you think subscription first, not ad-supported first, unless you're really the top one percent. Because it's so expensive to produce the scripted shows, and it's very, very hard as of today to hit it big enough to pay it back.

So subscription is definitely going to be a good model — think Netflix but for audio. Listener-supported, think public radio, is definitely going to be a component of the pie. But if you look at traditional media, the vast majority of media out there is ad supported. I don't see why it should be different in spoken word audio.

AD: Alright, well I think there's a natural point for us to draw to a close, and perhaps throw to a sponsor message. Thank you for joining us today.

FB: Thank you very much for having me.

AD: After the break, we're gonna come back with Jade and XD from The Blackest Show About Nothing, and they're gonna talk about what it's like to actually pay the bills on a real working podcast.


"So if you get tired of the Blue Apron ads, just think about the fact that you're listening to this thing for free for the next hour and fifteen minutes or whatever. It's like, 'you know what? I'm just going to sit through this 30 second ad because these people have a lot going on.'" — Jade, Jade+XD

"No one ever wants to talk about that too, but everybody who's getting a sponsorship gets free shit and it's amazing." XD, Jade+XD


AD: Welcome back to Function, I'm Anil Dash. In a moment, we're going to talk to Jade and XD. They're the co-hosts of the Blog Talk Radio show Jade+XD, The Blackest Show About Nothing, and you can find it in all the usual spots that you find podcasts. But they're going to give us a perspective behind the scenes about how two experienced podcasters get advertisers on their show, work with sponsors, and what it takes to have those ads show up whenever you're listening to their show.

AD: Thank you all for gathering with us.

J+XD: Thank you for having us.

AD: So there's so many things we can get into...first, for folks that might not know the show and might not know what you all do, can you give a little bit of background about how you got into being, you know, media stars?

J: Oh wow, so much pressure.

XD: It was really kind of natural. Jade and I had been friends for a while before that. And so we had another show and a guy approached me and he was just like, "hey let's do a podcast", and he wanted to do all guys. And I was like, "not in this climate." So I said, "we should have a woman on," and he was like, "I don't know." I said, "I know just the lady."

[transitions to a voiceover from a previous episode]

XD: How was your vacation?

J: It was a lovely. I just relaxed my titties off. I really did. Like braless the entire time.

XD: Same.

J: It was amazing.

XD: That was me, all four days.

J: And it was amazing.

XD: Wake up? Braless. Post up? Braless. Ride around, 'cause I went around, braless.

J: 🎵 You post up? Braless. Ride around? Braless. Top down? Braless. 🎵

[transitions back to the interview]

XD: It's literally just Jade and I every week talking about the musings of our lives. And we don't really do pop culture. It's literally just the stuff we like to talk about.

AD: So the world around you.

J: Absolutely.

AD: So you fast forward a couple of years, and now you all have got an audience, you've been doing this big enough to be able to do other shows and everything else like that. And I want to talk about something that almost never comes up on shows, which is how do you pay the bills doing this, right? We're gonna get personal. We're gonna get deep. And I think about paying the bills, and any of us who's ever listened to any podcast, really almost doesn't matter what it's about...iIt can be about pop culture, it cyan be about politics, whatever. At some point they're like, well now it's time for us to pay the bills, and here comes Squarespace, or here comes Casper mattresses...here comes Mailkimp, right?

So talk to me about, what was the first time you remember "oh we got a sponsor, we gotta do something."

XD: Wow...so when we first started, oh ,I was coming out of pocket for everything, and I remember when Jade and I went solo and it's just us, I remember I think in January of 2017 is when we got word that we were getting sponsors, and it was like "oh happy day."

J: Yes, because initially when we started in the back-back, we had like Target and Warby Parker.

XD: Affiliate things that everybody can do, because I came from the blogging world so that's what I knew. And podcasting, like I had a radio show before, but it wasn't like...you know I was just bored at home. But I didn't understand the business of it until way later.

AD: And thus far, you had just been paying for it all, so you're like anybody who wants to sponsor, that's good.

XD: Absolutely, and our first sponsor was Blue Apron.

AD: Classic podcast sponsor.

J: Yeah, know us.

XD: Right, and after that I was like "Jade, Jade, Jade...bitch we got a sponsor!"

J: Because we like to get the shit. You get the stuff that you get to promote.

AD: Oh, okay.

XD: No one ever wants to talk about that too, but everybody who's getting a sponsorship gets free shit and it's amazing.

J: It is.

AD: Alright, so okay, now that become a lot clearer, this is the behind the scenes that I don't think folks know. You're going home and you're eating some Blue Apron after Blue Apron sponsors your show.

J: Well the thing is, I'm huge on integrity. Kind of. Well, you know, ish...

AD: I don't mean to laugh...I'm just like, you know you just two minutes ago were just saying that we get all this free shit so I just wanted to know like, I respect the integrity but there's the free shit integrity.

J: But I can't talk about it if I don't know anything about it. So they have to send us examples. And I, you know if I don't, I can't bang with the product then I don't, then we won't do it. There's advertising that we turn down, because it just doesn't align with what we like or anything.

XD: There was one instance where we got asked to do like birth control. And I was like, um...first of all...

AD: You got a category problem.

XD: Jade has like, a kid and I am allergic to those so I'm way cool on that, so yeah we don't accept everything.

J: Yeah, or like dog food. I don't have no dog.

AD: Wow alright.

XD: I don't have a dog either.

AD: Man, shade to the dog food.

XD: No...I mean, if we had a dog, it's great. But we didn't. We don't have one.

AD: So it's gotta be real for you. It's gotta be something real. Like, this is credible, this is plausible for me.

XD: Yeah.

J: Absolutely.

AD: Not to get too deep into it, but I'm curious about the mechanics. Say you sell a sponsorship. I think we've all noticed that what people say about Blue Apron is pretty similar on all these different podcasts and what people say about Squarespace is pretty similar. So how does that happen? Where do those words come from?

XD: Do I wanna give out all the secrets? I guess so. They tell you what to say, coupled with your personal experience. Like Jade said, you can't advertise something if you don't try it out. And so they tell you to talk about your personal experience. But there is a structure of how the advertisers or the ad agencies want you to sell the product.

AD: So you've got like bullet points you should hit.

J: Yes, absolutely.

AD: But you're putting your voice on it.

J: Key points. There's also points that they don't want you to mention. You know, because a lot of times we'll fly off the cuff, you know what I'm saying? Make it our own. But as long as we hit those few things that they're like, "okay you need to say this, we need to put this out there to the listeners, and please don't mention like this."

AD: So it's like, "try our mattress but don't add in, like destroy capitalism."

J: Yeah, exactly!

XD: Because we've gotten in trouble once for going off the script and the agency was like, "we're not gonna pay you this week, however..."

AD: Yikes.

J: Oh god that was...

AD: So it goes straight to your pocket.

XD: Literally.

J: That one was stupid.

XD: It was, it was literally one word off.

J: It was. It was dumb.

XD: And it was like a preposition, it wasn't even like...

AD: It wasn't meaningful.

XD: No.

J: No. It was like I said "jeans" instead of "denim" or some shit like that.

AD: Oh. But that's like...to them that's important or something.

J: ...yes. Okay. What were you about to ask?

AD: I'm being kind. I'm being charitable.

J: Yes, me too.

AD: They just messed with the bag as soon as you got one word wrong.

J: They messed with the bag off of one stupid ass word. Get it together — I read everything else.

AD: Well that's great because I did want to get in on that, because I think its something that, you know...people on the train, people in the car, they're listening to something and they're hearing it, and it's almost like there's a template. And it actually doesn't matter: it can be meal kits, it can be "you should build a website," it can be "you should get a mattress". Those seem to be the big three. I don't know what else people are buying but people are doing a lot of sleeping, a lot of eating and a lot of websiting.

XD: Oh absolutely.

J: So I have two weekly podcasts, and one of them is on Combat Jack's former network Loud Speakers [Network]. And so a lot of our very good friends are also on Loud Speakers and they know XD and I are over here on Blog Talk Radio. So what's so funny is that if you listen to The Read, if you listen to The Friend Zone, if you listen to Gettin' Grown...we all have the same ads. And then you come over to Jade+XD and we'll also have a very similar ad. It's like, to show support for this show, make sure you mention this code. But apparently it's working.

AD: What you just alluded to is a couple sort of related parts. One is, there are podcast networks, which are a group of shows. And it's not like a TV network, this is like people are putting the shows together and you're affiliated. But basically somebody is selling ads across those shows. I mean that's one of the biggest things you have in common. And then there are different networks. And so you have that experience in seeing what that lens is across different networks, and it sounds like it's kind of the same stuff on both sides. It's really similar, like it's a similar analagous jump. Like you might see the same commercial on, back in the day CBS and ABC, when those were the two of the three networks or whatever, and you'd be like "okay, it's the same Ford ad. It's just every truck. It is what it is." So it sort of works like that.

XD: 🎵 Like a rock. 🎵 Yeah, the networks thing. It's interesting. I will say the difference with Jade's other show is the fact that, and I guess we'll talk about this later, is that most of Jade's stuff is live reads and stuff like that, where ours are both live and dynamic, where the people who give us the check every month insert ads of us in the beginning and throughout. Which sometimes we can't control.

There was an instance where...do you wanna talk about it?

AD: We'll get into it in one second. I want to talk about two words you just used which I think folks need to understand. It's not too much jargon. One is reads, which is not the vernacular usually heard. In podcasts, a read is...you get that language from an advertiser and this is the stuff you're supposed to say about the product or the service or whatever it is. And then there's inserts, which is, they're going back after your show's recorded, right? And they're dropping in ads. Is that right?

XD: Yeah, Like today, we get the episode from our producer, I upload it to a space and then I put like a marker the little space that they tell me to, and where to put a commercial break, and that's when they will insert the dynamic ads, and we don't know what those ads are.

AD: Okay, so let's get into that. What happens is you got a system that's gonna drop a little audio clip that's an ad into your podcast. It happens after you've done the show between the time when you're done recording the episode and it gets to our ears as listeners, this thing has been inserted, what can happen in that moment?

J: Some bullshit!

XD: Yeah.

J: Okay...so are you ready for it?

AD: Let's get to it.

XD: Because this was a big issue last year.

J: So the live inserted ads that we get, they just started maybe a year and a half, two years ago.

XD: Yeah.

J: So when they first came, we were like, "oh shit we have commercials, like this is crazy." And we got all kinds of stuff. We get AutoZone, we get AutoZone in Spanish. ¡AutoZone! And it's fun, you know what I'm saying? It's great. I like to go back and review the episode after we put it out, because I want to see how the listeners are hearing it. Our editor is absolutely amazing, so I like to hear how he does that.

AD: So the finished product is what you want to hear?

J: The complete finished product. I want to see how these ads are working, what's not working...I want to try to catch it before other listeners are catching it. We've got some really loyal listeners, and they'll hit the episode as soon as it comes out. So we started getting like a bunch of tweets and emails and so I go and listen to the episode and I hear a Fox News ad. Lost. My. Shit. So immediately...

AD: And that's a bit of a leap from your audience?

J: A bit? From "The Blackest Show About Nothing?"

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XD: We're very liberal and progressive. And radical.

J: I speak about everything from like being a cannabis advocate, you know, to raising my child in some ways that people may find problematic. You know what I'm saying? To all kind of music, whatever. But like we have a good time.

AD: But even with the most charitable interpretation, there's no way this is a fit.

J: Yeah, there's no way that they know that this is us. So immediately we jump on the phone and then we get on the email with the network and let them know very plainly: "I don't ever want to hear this shit again. I don't care what you all have to do, I don't know who this got past, but it doesn't align with our politics, it doesn't align with anything regarding our brand or our personal beliefs; take this shit down and don't ever put it up again. And that's that."

AD: Pretty clear.

XD: And they were very apologetic.

J: Yeah.

XD: Even moreso when I put our attorney on the email and that got taken care of posthaste.

AD: Did they blame that the software did this, or was it like...

XD: They said that...

J: There's always a blame.

XD: Right. There was a bad deal and they sent them a bad ad that in the audio channel and that they had to go and strip away all the other audios and see which one was the problem. I didn't really care about the answer. Just take it off our show. And they got rid of it.

AD: It's an interesting thing, because what you have is this dynamic where you sort of want the convenience of having these ads inserted, because then you're not having to do the whole, you're not having to read it, you're not having to do the whole thing, and there's also some separation between you and the advertising. Right, because it's like it's over there and it's like the other side of the house, I don't have to worry about that.

But the cost of that is this danger, when whereas when you were reading it, you know exactly what you said, that it was literally in your voice and that you could have that filter on it. The downside of that of course is then you've got to do it. So I'm curious then, where does the balance go,? Like if you could wave your magic wand, which way would you want that to go?

XD: I guess this is when it comes down to a money conversation, but you get more money when you do live reads. Yeah, you can control all that good stuff, which is great. But I'm all about getting to the money. So if we could do all live reads, that'd be great.

J: Yeah, I'm cool with the live reads.

XD: And that's cool because hey, we can control, we say it in our own voice, we control our brand and the listener experience. But we're making more money.

AD: So it solves a bunch of problems all at once.

XD: Absolutely.

J: Oh yeah. And we did this for a long time with no money. It's fun, and we started off as a hobby. It started off as something that you know, we wanted to try out. And then it grew into something, and that's why advertising is important to us, because that's what turns it from a hobby into a business.

AD: There's a lot of the costs of running a podcast that might be invisible, even thought people know you gotta buy a microphone or something like that, what are the things that people wouldn't expect, or don't see, or don't know, that all this money is going to, to make the thing run?

XD: There's this famous interview with Left Eye from TLC, and she's talking about like, "this is how you go broke."

AD: Yes.

Lisa "Left Eye" Lopes: This is how a group can sell 10 million records and be broke. And everyone, get ready to do your math. Okay. There're 100 points on a album. TLC had 7. Every point is equal to eight cents, alright? Seven times eight is 56...

XD: When I talk about paying for everything there is outside of equipment, where do you upload your show? Like how does it get to these spaces on iTunes, Google Podcasts, wherever...

AD: It's like the infrastructure that delivered the show?

XD: Right. So you have to pay for hosting. I didn't know that, and I was like, "well where does this go?" And so you have to find hosting, you have to make sure you find the best host because sometimes if you get a wrong host and they get you on bandwidth and then you start to grow, and then you have to upgrade. That was a problem that Jade and I had in the very beginning where we kept having to upgrade our hosting because it was a blessing that we got more listeners, but we have to pay for more bandwidth. Like early days of blogging and stuff like that.

AD: Right. And if you get all that right, it's invisible to your listeners.

XD: You're right.

J: You're right. And then on top of that, you've got equipment, and again, I told you all that technology's not my friend. But you still have to research and find out what works best. Then you get something and that might work for a while, but then you realize I want to crisp my sound up some more and like...we're not in the Vox studios, so we went and got some real swanky boards...

XD: We got a board and stuff.

J: All kinds of things.

AD: The board is how you mix the sounds for folks?

J: Right, yes. A mixing board.

XD: And for all intents and purposes, we record at Jade's house.

J: Yeah.

AD: Alright. You had to upgrade it into sounding like...

J: Yes.

XD: Yes. And we have to make it so that the way it sounds like we're in a studio and in reality we're in Jade's house and her daughter Noah just comes in and is just like, "Mom!"

J: Yeah, but it's a lot of trial and error, figuring out what kind of equipment will work. Sometimes you'll get something that will really improve your sound and then you realize there's something a little bit better out there.

XD: Mm-hmm.

AD: Constant upgrades and all that.

J: Yeah. And then you've got live shows. We talked about doing live shows, and plane tickets don't pay for themselves, neither do hotels, neither do venues...you know?

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AD: Yes.

XD: Yes

AD: There's a lot of infrastructure.

J: There's a lot of costs, there's a lot involved in running a whole entire production.

XD: And luckily, Jade is more of a better talker than I am when it comes to negotiating and stuff like that.

J: I play no games.

XD: I just pay the bills.

AD: That sounds like a good partnership.

XD: Yes.

J: Yes

AD: You make the deal, you pay the bills.

XD: That's literally how it goes. And we just upgraded our equipment again. And we have to do it again to get something better.

AD: It never ends.

J: It doesn't.

XD: It never ends. Things break down.

J: Because then you'll get a barrage of emails from listeners like, "Well why did this week sound so shitty?" And I'm like, "Well, bitch, you didn't have to buy anything."

XD: This is for free. And then we pay for our producer. We give him a monthly stipend. Our videographer we pay.

AD: You've got to take care of your people.

J: You've got to take care of everything.

XD: Right, so the reason why we all these extra things is because we have a lot of overhead to pay.

J: Yeah, then you've got to pay yourself.

XD: And then you have to pay yourself. Which after all is said and done, and you hope that you make a decent take-home.

AD: That it all adds up?

XD: That it all adds up. But it's just like...a lot of people are relying on us because we've said we're going to pay them. When we first started out, it started out as a $100 a month kind of thing altogether. Because then there's a website, too. And then towards the end, where before we got blessed in being on a new network and stuff where we don't have to pay for much. But it was like 200 bucks a month coming out of a pocket where we're not receiving any advertisers. And it was just like...

AD: It adds up.

J: Yeah.

XD: Yeah.

J: So if you get tired of the Blue Apron ads, just think about the fact that you're listening to this thing for free for the next hour and fifteen minutes or whatever. It's like, "you know what? I'm just going to sit through this 30 second ad because these people have a lot going on."

AD: Please visit our show notes and click on the links!

J: Please!

XD: Use that code!

AD: So, there's another thing that's related to this which is that, we've sort of been joking about. There's these three, four, five sponsors that seem to come up all the time. And it's wild because it can be a show about whatever. Here's your show about architecture, and it's sort of the same sponsors as the show about cooking or whatever. How do you think that happened? Why is it that we know about, like I said, SquareSpace and Casper and Blue Apron and those things, why are those the go-to, or Mailchimp, why are those the go-to ones? Why do you think it's that coalesced around a couple brands?

XD: I think it's part of just the people who actually listen to podcasts. Like you said earlier, there's a bunch of people who are just busy, so they get meal kits, and they sleep all the time, and they need a website for their dog grooming business or something. So I think that's where it comes from, and I also think a lot of companies are reluctant to advertise in a medium that's super new because they don't understand the risks.

AD: So these are like the early adopters that figured it out, and that's what they're saying make sure to mention our podcast so that you get the discount.

J: Exactly.

AD: Because they're going to track it.

J: That's why they're on podcasts. And they're on the train. They're where the people are. They're where the millennials are. They're where the people who are working and buying are.

AD: So they're ahead of the curve?

XD: Yeah.

J: Yeah.

XD: And Jade and I get sponsors from other people, so people would be like, hey, not even attached to our network or anything, they'll email us and just like, "How much for a commercial space?" Because they realize that they believe in the power of advertising in this new medium. And I wish other companies would figure that out, because there's more to life than just...

J: It works.

AD: So there's an interesting thing. I look at companies that spend a lot on advertising, and I look at, like Apple, right? So if you go to a fancy magazine, you get The New Yorker, whatever, the back cover's going to be that iPhone, that iPod, whatever.

J: iPod? What is this, 2004?

AD: Yeah, 2003, yeah.

XD: They still sell them!

AD: They do! How dare you! Back in the day, it was then, and now it's the iPhone. And then TV, their ads are all out. They've got big names and big faces, they license the music...all that stuff. So they spend probably more money than anybody on the production values of those things. As far as I know, and you all can correct me if I'm wrong, I have never heard somebody reading on a podcast, you should try the new iPad.

XD: Which is crazy.

AD: Isn't that wild?

XD: They're spending, what.... 30 seconds on TV is like half a mil. You can spend a fraction of that on a podcast. Like put a iPad ad on Joe Rogan's show. That's the top comedy podcast.

J: And he got Blue Apron, just like us.

XD: Yeah.

AD: Yeah. That's the thing, right? It's like the big names, whatever, you listen to like Pod Save America and these guys are like huge, and you're like it's Blue Apron up in here, too.

J: Or Serial! I'm like, "yes, twins!"

AD: Yeah, yeah. So you get these things that are sort of like the biggest names that exist, and they're running the same ads. Meanwhile...forget the Super Bowl; if you're Monday Night Football, you've got custom ads, and they're doing these specific ads, and everybody's like we want to be the truck that sponsors this, or whatever. I don't know why trucks are in my mind today. I'm not a big truck guy.

J: You're sure?

AD: I'm pretty sure. So what happens is, if you're something like Monday Night Football, you've got these ads and people are trying to be in front of your audience, and every brand knows they should be there. And if actually you saw an Apple ad next to a food ad, a McDonald's ad or something, you'd be like "sure, yeah, that all belongs there, doesn't matter if it's something that's a $2 cheeseburger or a $2,000 laptop." It's all that same audience. Podcasts seems like kind of a narrower view. Now I think the podcast audience, all the data show these are folks that are probably a little more educated, probably a little well off, they can afford to have the free time to do this stuff. That's fine. There's some things in common with the audience. But they could be, well certainly they're eating burgers. We don't hear a cheeseburger ad. I'm curious about, is it almost the ad saying who they think the audience is?

XD: Absolutely.

J: Yeah, for sure. I mean even with my other show, which is more woman-geared, we get a ton of advertisers coming in wanting to advertise different feminine products. Then we randomly got a beer company. Which I thought, "I think that's because of me."

AD: Ladies drink some beer.

J: I do like a beer. But we get a lot of feminine products and shoe companies and detox programs.

AD: And they haven't found any other places they feel like...

J: They do have other places, but I'm noticing that these smaller companies that are reaching out to us, and are reaching out to some of the other podcasts are focusing on a lot of the influencers who are geared toward their particular brands.

XD: And that, to Jade's point, along with the actual show and the numbers, it's also who the hosts are. So if they see Jade is big on Instagram, has a bunch of followers on Instagram, and I'm bigger on Twitter, they'll use those numbers and be like, "oh well if they have 35,000 followers on Twitter, then I'll invest in this because I know that my product will get seen more."

AD: Right, it carries over to the other networks.

XD: Absolutely.

J: Yeah.

XD: So it's not like...

J: By a particular audience.

XD: Right. And then it's not stapled to the show. They know it can go everywhere. And even some of our advertisers, they'll ask us to post on social.

AD: So actually there's a thing I want to get into a little bit, which is like the whole hustle. There's all these other things around that aren't just reading the ads, or putting ads into the show that are the ways that, not just podcasts, but all the social media monetizes. What does that look like? T-Shirts? Events? What is it all?

XD: Listen. I always joke with Jade, I'm like podcasting is a scam. It's literally the hustle. You have to literally find ways to make money if you want this to be successful. Jade and I, we released a book, which is really just the both of us joking around, doing a story week-by-week, not knowing what each other's writing. And we released a book and made a bunch of money off of it.

J: Good old trash novel.

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XD: Yeah. Exactly. We just released new merchandise. We have a Patreon. When we first started out, Jade usually gets to the money first before I do and I just pay people.

J: I have a family.

XD: Yeah, so Jade will find some things, like "oh, we could do this as another means or source of income." I remember our first live show, Jade found a liquor sponsor or whatever so that way we could upcharge tickets. It was crazy, but that's some of the ways we have to legit find any type of way to make some money.

AD: So it sounds to me like y'all are artists signed to a 360 deal, but you're the 360.

J: Yeah.

AD: You're doing all the work yourself, right?

J: Essentially. We started off very grassroots. We're still very grassroots. And it was completely us, independent by ourselves. Even with the network being involved.

XD: And they're not too involved.

J: They're not too involved. Not to a point of it being intrusive, but also not where they're negligent. They handle our advertising and then we handle everything else for ourselves.

AD: But they're not booking a venue for an event if you guys do a live show?

J: No, all of that is us. We do all of that ourselves. Every last drop of it. It's a lot of work.

AD: That's a lot.

XD: A lot of work.

J: It's a lot of work. But it's cool because you get to engage with your listeners and your audience, and you're able to bring that to other smaller markets where they might not have as much stuff going on. So they want to come out, they want to party with you, and they want to kick it with you. I'm a good time, you know what I'm saying?

AD: And it makes the community more real. Makes the connection more real.

J: Yeah, absolutely.

AD: So it's nice that it's the money that drives the authenticity of it.

J: Yeah. Absolutely.

XD: Absolutely. It makes a better podcast, too, because it makes you really give a shit about what you're doing too. Yeah, it's a job, and we joke like "uh, this is so much work," but we appreciate it more because it's ours and nobody's really telling us what to do and we can craft anything and everything that we want to do. In our own time, too, which is really, really good.

AD: It's almost if in another creative industries, because you as creators, what you do to make money seems to help tie you deeper into the work you want to be doing and deeper into your audience and paying more attention to them. As opposed to, I mean it might be a distraction sometimes, but it doesn't seem as much of a tension as it might be in other industries.

J: I really love what I'm doing. So ultimately, you know what I do during the day. I'm a chef. I have two catering companies. I have a family. So this kind of platform is really, really cool because it allows me, like I said, to be able to connect with those listeners. But we talk about food. We talk about food all the time. We're like two greedy-ass bitches. And people love it! They're like, "You guys talk food porn." And now what I can do is I can curate these dinner parties. And I can sell tickets to these dinner parties and people get to have the experience that I get to speak about to people all over the country and also in other countries as well.

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AD: And you bring your worlds together.

J: And I bring the little worlds together. And it works.

XD: Yes, same for me. I came from blogging world, and started out at YouTube, and then from the show I ended up doing a Ted Talk, and everything else has been growing so far. And I think that's the cool part of this show, it's just like I can do whatever I want.

AD: So the freedom is the thing.

XD: The freedom, yeah. And a lot of times people are like, they want to be entrepreneurs and stuff. But I mean...folks need to understand it is hard work. But it is rewarding work when it is your own.

AD: Alright, I think on that note, that is a good point for us to end on. Jade, XD, thank you so much for joining us on Function.

J+XD: Thank you for having us.

J: For being a little raggedy up in your studio.

AD: Blacking it up over at Vox!

AD: So I gotta admit. I started out a little bit skeptical about this whole take on podcasting ads, because once you've heard the same ads for SquareSpace and Casper and all the same advertisers, you start to roll your eyes. But the truth of it is, I've heard that this is actually a much more human medium. Even though there's technology inserting ads into our podcasts, it's nowhere near as invasive or tracking us as much as the ads that follow us around the rest of the web. And for creators, we heard that they have a little bit more control and independence. They can put a little bit more thought into the advertisements that show up on their show. And that might make their shows a little better, a little bit more personal and human. And that can only be good news for those of us that listen to podcasts. In all, I was surprised to find out that I really think ads in podcasts are a lot more thoughtful and interesting than ads in almost any other medium.

Function is produced by Bridget Armstrong. Our associate producer is Maurice Cherry. Nishat Kurwa is the executive producer of audio for the Vox Media Podcast Network. Our engineers are Srinivas Ramamurthy and Jarrett Floyd,. Our theme music was composed by Brandon McFarland. And big thanks to the entire team at Glitch.

You can follow me on Twitter at @anildash, and of course you can all check out Function at glitch.com/function. So please to remember to subscribe to the show wherever you listen, and we'll be back next week with a brand new episode.