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The promise of programmatic ad selling remains mostly unrealized in podcasting today. The Interactive Advertising Bureau says just 2.2% of podcast ads were sold through programmatic channels last year, roughly the same as a year earlier. The numbers may still be small in 2021, but during the Fall IAB Podcast Upfront on Thursday, advertising executives said they expect the numbers to climb as technology improves and audience targeting continues to take hold.

Claire Fanning, VP of Ad Innovation at SXM Media, said she sees a “massive opportunity and a lot of interest” for programmatic in the buying community.

Hayley Diamond, EVP of U.S. Digital Investment at Publicis, is among those that would like to do more transactions via programmatic platforms. But she said similar to the challenge of having a lot of podcasts to wade through, there are also many different buying exchanges to work with. “Fragmentation can make things quite difficult,” said Diamond. She said there also remains a need for technology that can help buyers use key word targeting at an episode-level, which is a tool that can also be used to navigate brand safety concerns. Measurement gray areas bring added complications. “When that catches up, we’ll see quite a bit of programmatic catch-up,” predicted Diamond.

The Trade Desk is among the programmatic platforms that offer podcast inventory to its users. Ash Gangwar, GM of Inventory Partnerships, agrees podcasting is “promising” but he said work still needs to be done. “What we haven’t figured out is how does this space fit in context with all the other types of media,” he said. “What we need is for these advertisers to understand how podcasts fit into that mix. That’s how it will get its fair share.”

Gangwar thinks podcasting is still being overlooked when it comes to creative. Unlike connected TV which has been able to simply repurpose broadcast TV ads to the web, podcasting’s reliance on host-reads presents a challenge. “In order for this space to look more like CTV, we need to move from host- to announcer-read creative. That will be the big step forward,” he said.

SXM Media recently launched its own programmatic solution, allowing advertisers to buy inventory from Pandora, Stitcher, SiriusXM, and podcasts from outside publishers such as NBC, in one place. 

Other podcast publishers are doing the same. Technology developed by Voxnest is powering iHeartMedia’s new programmatic platform for podcasts. It allows advertisers to target podcasts by content using podcast show categories as a guide, as well as tap into geolocation technology. 

Advertisers and agencies are also still sorting what they want from podcasting’s programmatic advertising. Regina Sommese, Group VP of Paid Media at Discovery, said creating parity between targeting and measurement between podcasting and other media is something media buying teams are working to achieve. “It’s definitely a space that everyone wants to be part of their media mix,” she said.

Discovery has started to buy some of its ads programmatically via SXM Media. Sommese said they are looking at it as a way to hit different media formats as a way to reach consumers at various touchpoints throughout their day. By using a programmatic option, she said it gave Discovery flexibility, control and speed of execution. “We know it’s a format that is very quickly becoming another media vehicle in the larger media mix, so that executing it programmatically just helps to incorporate that format into what we view as the ideal way to execute media,” said Sommese.

Yet Fanning said it remains a challenge as most brands are still hesitant to move away from host-reads that are seen as influential and authentic with consumers. So she said SXM Media is looking for ways to maintain those attributes but sell them at scale across the more than five thousand shows in its network, and that requires sophisticated technology that is not yet available. 

Gangwar said as innovations automate the process, it will open podcasting to different types of strategies, such as audience targeting. “This is where a lot of the money right now in programmatic is, and that’s where we are innovating,” he said. “Ultimately what that does is bring in new budgets and more advertising to podcasts, and the listeners benefit from that.”

Diamond agrees podcasting is a good fit for audience-targeting. She said Publicis is also looking for ways to pair that with audiences that are loyal listeners to a show. “It’s how do you take the best of what’s been working in podcasting, the love of the hosts, the passion of the audiences, and the cool custom sponsorships, and marry those with the programmatic solutions,” she said.