iHeartMedia launches branded podcast studio as buyers say distribution and scale are key

Three podcast ad buyers told Digiday they are creating more branded podcasts for clients this year. Because custom podcasts require a hefty media budget, working with a podcast organization that has a large network, scale and distribution is imperative, they said. 

The “size and scale of iHeart” is critical to the success of these podcasts, said Jonathan Adams, executive director and managing partner at Wavemaker, which has created a few branded podcasts with the organization. iHeart was the top podcast publisher in the U.S. in April with nearly 32.5 million uniques, according to podcast ranking company Podtrac.

“If they put their might behind it, it will not get lost. That is the biggest problem with custom podcasts: you can create something, and no one will ever know it was created unless you promote it right,” Adams said.

Custom podcasts from Ruby will be distributed across the iHeartRadio app and major audio platforms. Branded deals include ad placements across iHeart’s podcast network to cross-promote and drive listeners to the show, buyers said. Creative assets – either audio clips from the podcast or video taken during the recordings – can be distributed on YouTube or social media as well.

“We distribute [and promote] these shows in the same way that we do all of our other shows as well. A big part of our strategy is the broad distribution,” said Will Pearson, president of iHeartPodcasts. 

When asked if iHeart makes any guarantees to advertisers around distribution, Kelly said in an email: “Targets are entirely dependent on the type of show we are making, our target audience, number of episodes, frequency, genre… and other factors.”

Ad inventory to promote branded shows “depends on the advertisers’ media buy,” Kelly added. “Impression levels vary based on spend… [but] iHeart does promote each show as much as possible through many assets including feed drops, newsletters, added value impressions across digital, streaming and podcasts inventory and of course the biggest platform broadcast radio.”

Jacob Schwartz, associate media director of national audio investment at Mediahub, said branded podcasts are for clients that “don’t want to take on production responsibilities themselves.” He said he’s seeing more brands pay for custom podcasts.

“For brands that are fairly established, it’s a logical next step of – let’s not just put ads in the podcast space, let’s create our own podcast,” Schwartz said. The launch of Ruby adds “options in the marketplace,” with studios like Vox Media’s Vox Creative and The New York Times’ T Brand Studio. 

However, Schwartz said he hasn’t worked with any clients on branded podcast deals (though Mediahub has produced a branded podcast with iHeart called “Humans Growing Stuff”). “We haven’t had a ton of clients be willing to pull [the] trigger.”

Readying Ruby

iHeartMedia has produced 30 branded podcast shows (20 in just the past year) for brands like T-Mobile, IBM, Intuit QuickBooks and Mattress Firm. The renewal rate of clients returning to pay for a second podcast season is 88%, Kelly said.

iHeartMedia declined to share how much its charging brands for custom podcasts, and declined to share what percentage of its ad revenue comes from branded content deals. iHeartMedia’s podcast revenue was $77 million in Q1 2023, up 12% year-over-year.

The cost of a branded podcast deal can range from hundreds of thousands to millions of dollars, depending on how high-profile the host and the production company is, said Mark Pappas, svp of innovation at CMI. He is working with a pharma client on a custom, eight-episode podcast series, the first one for the agency. He declined to name the production company they’re working with.

Ruby has over a dozen full-time employees, ranging from marketing and creative leads to various producers. While branded podcasts will be Ruby’s focus, the team has also created extended mid-roll ads for organizations like the National Highway Traffic Safety Association.

Distribution is key

Because the cost of a custom podcast requires a large media budget, distribution is key to a branded deal, ad buyers said.

Wavemaker worked with iHeartMedia on a podcast with Trojan called “The Pleasure is Ours,” which ran for three seasons and was ranked in the top 3% of podcasts globally, said Adam Puchalsky, global head of content at Wavemaker. The agency has created custom podcasts for CPG and healthcare clients.

“The ability to create something that allows a brand to get that much closer to an audience is everything. That’s why we’re doing it, and why we continue to do it,” Puchalsky said. He added that branded podcasts “can deliver on top and lower funnel metrics.”

iHeart also offers brands that create podcasts with Ruby a custom third-party measurement study from companies like Nielsen or Kantar’s Millward Brown, Kelly said.

“The ability to create something that allows a brand to get that much closer to an audience – is everything. That’s why we’re doing it, and why we continue to do it,” Puchalsky said. He added that branded podcasts “can deliver on top and lower funnel metrics.”

Cost issues

Wavemaker’s Adams said some brands (such as entertainment companies) have existing contracts with talent, which helps “reduce” some of the costs of a branded content deal by being able to avoid incremental talent fees.

But if a brand doesn’t have “millions of spend” to put into a custom podcast series, “they’re probably better off spending like $100,000 running ads across podcasts or host-read ad placements,” Pappas said.