Innovation in Advertising: Gimlet
Over the last few months, I sat down with some of the biggest players in the industry and asked who, in their opinions, is doing the most innovative work in podcasting. Almost everyone I interviewed invariably referred to one company: Gimlet Media.
Considering the considerable media attention Gimlet has garnered (and the fact that its origin story is eloquently articulated in season one of its show StartUp), I will use this case study to briefly explore why Gimlet is so admired and the ways in which it has (and hasn’t) disrupted the public radio mentality.
First and foremost, Gimlet has experimented with native advertising in a way that no other media outlet has. Although the company initially partnered with Midroll Media to plug into the network’s ad sales infrastructure, the company quickly accumulated the numbers necessary to work with advertisers directly. Moreover, Gimlet knew it was creating something of higher value than your typical host-read. As Matt Lieber explained: “[The ads are] high-touch. We produce them, and they’re customized, and that requires a direct relationship with the advertiser.”99
Although each promotional spot is demarcated with special ad music to differentiate it from the rest of the episode, Gimlet ads are crafted by the hosts themselves, who use them as opportunities to craft mini-stories about the sponsor. The approach has allowed Gimlet to distinguish itself from other podcasts and charge higher CPMs (about 60 to 100 dollars for midroll ads, compared to more typical rates of 20 to 45 dollars).100
The ad strategy, then, has been to focus on quality and produce smart brand advertising for big-budget companies, rather than to chase scale. This is in direct response to the digital advertising landscape where we currently find ourselves. In Lieber’s words:
The economics of the web today are brutalizing because it’s a numbers game. You have to make an enormous amount of content to make up for the fact that the numbers are quite low […] that’s not a world I want us to enter. I think there are a couple of things that are different about podcasting. One is, in today’s world, the amount of premium content that’s extremely high quality is kind of scarce. That helps us. I also think the ad unit in podcasting is fundamentally a better ad unit than display ads. It’s baked into the show, it’s read by the host, and when you do a good job, listeners want to hear them. I could open up the Twitter feed and read the people who say, “I love your ads.” They’re entertaining and interesting. Media companies are looking to mobile and saying, yes it’s a good opportunity, but we don’t know how to make money there. We’re making money there. I may be biased, but I think we have the best mobile ad unit in existence.101
Although Gimlet has found success with its advertising model (it should raise about two million dollars in revenue from its first year), the company seeks to introduce alternate revenue streams as a way of safeguarding against potential downturns in the market. Its most important alternative revenue stream so far is a new membership model (offering merchandise, early access to events, and bonus content) that will hopefully convert listeners into customers. In the future, Lieber foresees a third stream that could center around live events or commerce.102
Another way Gimlet has set itself apart from many podcasts is by courting venture capital, both from individual investors and a campaign on the crowdfunding site Alphaworks. (To understand this fully, listen to StartUp Season 1).103
Also notable is Gimlet Media’s efforts to support talent and attract high-quality producers. Unlike Radiotopia, in which producers maintain ownership of their shows, a Gimlet show typically belongs to Gimlet. However, in exchange for ownership, Gimlet attempts to “super serve the creator” with top-notch editorial support, financing, marketing (including cross-promotion across shows), a built-in audience, and competitive salaries. Moreover, at least in the podcasting world, the Gimlet “g” has come to stand for quality.104
“The people at Gimlet are really proud to be part of Gimlet,” BuzzFeed’s Jenna Weiss-Berman told me. “It’s a culture, and when a Gimlet show comes out you know it’s going to be good. You know it’s going to have a level of production that very few other networks have.”105
Part of the limitations of the Gimlet model, of course, is that production is slow. In order to maintain its standard of quality, the network has only launched three shows so far. Unlike Panoply, which partners with various media publishers to help produce podcasts (often conversational shows that align with existing content, and thus require less preparation and editing), Gimlet producers craft each show in-house, reporting and editing both the content and the ads. Moreover, the shows have not significantly departed from public radio in terms of content (whether this is even desirable, of course, is up for debate).
Podcasting offers ways of experimenting with advertising and an opportunity to stand out from the online-mobile advertising sphere. CPMs remain malleable, especially when the advertising content is bespoke (in this case, advertising can become an important revenue stream). When a podcast’s numbers reach critical mass, the show can develop direct relationships with advertisers. If networks are to maintain talent, they must super-serve their creators. Gimlet is betting that scale will follow quality.