Podcasts were guys talking about tech, then along came Serial | Guardian Small Business Network

In 2013, podcasts were not an attractive prospect for advertisers. Audio content was largely amateur, niche and unprofitable. But the industry was on the cusp of change, and two Swedish entrepreneurs saw its potential.

Måns Ulvestam and Karl Rosander, founders of Acast, spotted that more and more people were listening to podcasts. “We contacted those who ran [them] and realised that their download rates were huge, and growing,” says Ulvestam.

But the technology wasn’t sophisticated enough to allow many podcasters to earn money from their work. They were relying on basic download numbers (available on iTunes) or on streaming figures from their server. Neither of these included in-depth metrics, which many advertisers demand. This is where Acast stepped in.

Acast positioned itself as a podcast platform – a place where creators could post their work and podcast fans could listen – that offered a fresh take on the way advertising could fund the medium. “[Back then as a podcaster] you could make money if you had a huge audience with hundreds of thousands of downloads per week. Then a brand might get in touch and pay the host to read an ad on the podcast,” explains Ulvestam.

However, these types of ads can’t be targeted at a specific demographic; a podcast’s listeners can span a wide range of ages, countries and interests. That makes it harder for a podcast to attract advertisers. “McDonald’s, for example, isn’t going to advertise somewhere with no metrics. They want to be able to track and target their message,” says Ulvestam. Acast sells itself on detail. If a brand wants to reach women aged 30-35, in London, in August, Acast will serve the ads to all listeners who fit that demographic across their different podcasts.

Acast spent about nine months building the technology to make its podcast ad breaks possible before launching in Sweden in April 2014. Just six months later, the founders’ bet on podcasting paid off. Serial launched, notching up 40m downloads for its first season and making podcasts mainstream. While Serial wasn’t a Acast podcast, its success was good for business. Ulvestam says: “It completely changed people’s perceptions of podcasting. Historically, podcasts were two tech guys talking about their passion.”

In the past five years, podcasts have sprung up on a wide variety of topics from fashion to sports. But Serial really kicked things off, says Ulvestam. “It was such a great story that people who had never listened to a podcast before downloaded it, and discovered that they actually liked the medium,” he says. “So they found other podcasts that they liked and became regular listeners.”

Once their gamble had proved justified, Ulvestam and Rosander were able to grow their enterprise. In 2015, Acast launched a UK office, followed by offices in the US, Australia and Norway. And, at last count, they’d notched up 56m listens on the podcast they host. The most popular podcasts on Acast are: My Dad Wrote a Porno, The Football Ramble, The Adam Buxton Podcast and Anfield Index.

More recently, Acast has launched a premium, ad-free service through which podcast makers can sell exclusive or bonus content to listeners without any advertising.

While business is strong, some might wonder if Acast is part of a podcasting bubble. To help sustain success it seeks ways to grow the medium. “We’re interested in podcasts that are completely different from anything we’ve heard before,” Ulvestam says. One way in which they’ve sought out new audiences is through a partnership with Gleam Futures, a talent agency that represents YouTubers, such as Zoella, Tanya Burr and the Saconne-Jolys.

Talking to Gleam, Acast found that some of the YouTubers they represent had already voiced an interest in trying a new platform. YouTubers now hosting their podcasts on Acast include Marcus Butler, a YouTuber with 4.6m subscribers (who hosts the podcast Lower Your Expectations), and YouTubers Anna Newton and Lily Pebbles (hosts of At Home With) who have almost 1m YouTube subscribers collectively.

Acast has also innovated in smaller ways, such as building an algorithm that recommends content based on a user’s previous listens.

Acast insists it has no direct competitors. However, Audioboom offers customers a similar service (it allows advertising to be inserted before, after or mid-roll while someone is listening to a podcast). Plus, with Apple having recently announced an analytics tool for its podcasts, Acast could be facing further competition.

Acast says that it has been measuring streaming metrics and analytics on podcasts since it began, and therefore has a backlog of information, such as listener drop off rates and geolocation, which sets it apart.

The profile of podcast listeners (fairly young, fairly affluent, urban) make them a key target for advertisers. They are also, in the advent of new, more personalised ways of consuming media – for example, favouring Netflix or Amazon Prime over terrestrial television – becoming more difficult to reach. This makes Acast’s proposition more attractive.

Ulvestam doesn’t think the podcast audience is going anywhere soon: “If we can continue to create revenue for content creators, they will continue to make more and better podcasts,” he says. “We see a future where you can start listening to a podcast on your walk to work, get into your car and have it immediately start playing from where you left off and get home and have your Amazon Echo continue. It’ll learn with you and continuously play content that it knows will interest you, in different formats. That’s how we’ll make podcasts as easy to listen to as radio, and that’s why we’ll continue to grow.”

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