SCOOP: A look at the Canadian podcast sponsorship economy.

What's the "Canadian way" to advertise on podcasts?

Show me the money!

April 29, 2024.

Locking in sponsors on your podcast is one of the ultimate goals for most podcasters out there. If it’s not the idea of making your podcast your full time gig, most podcasters are looking to at least be compensated for the time spent making their show.

When you look at the podcasting landscape in the U.S., despite the amount of recent layoffs, it still seems like there’s more than enough sponsorship money to go around. But where Americans are hitting fast balls, it seems like Canada is often still standing at the tee-ball pitch, smashing an overhand throw over the fence. We’ve got “the stuff”, but the state of sponsorship funding coming at us doesn’t feel quite as pro-league.

Douglas Soltys, Editor in Chief of Canadian tech news publication BetaKit, and host of its corresponding podcast, The BetaKit Podcast, has been podcasting since 2008. He says that despite the podcast industry significantly changing over the last couple decades, when it comes to advertising there are many challenges that haven’t budged.

“Podcasting is an open and distributed medium because it's based on a protocol that is RSS. Discoverability is difficult, which means audience development is difficult. There's a lot of people just like floating out there that would love to have advertisers, but they can't meet up. It's not even that they're small, it's just impossible to manage those relationships at scale in an effective way. It means that unless you are famous or have a prebuilt audience, you've got to be really, really smart and hustle in specific ways.”

Douglas Soltys, The BetaKit Podcast

As a Canadian indie podcaster, I’ve spent an exhausting amount of time pitching to brands for sponsorships on my shows, with some luck and many disappointments. Seeing the funding flowing through the American podcasting ecosystem, it’s hard not to believe that maybe it’s simply the fact that I’m Canadian that is making things harder – and it’s not even that much easier to lock in home-grown, Canadian advertisers either.

But there is demand to advertise on Canadian podcasts. Heather Gordon, Managing Director at Acast Canada, told me that according to their most recent quarterly report, they posted 55% net sales in growth in North America alone, and continue to see podcast advertising surging in North America.

So is the Canadian podcast sponsorship economy really that different from what we’re seeing in America?

Canadian brands are still in Podcasting 101.

Right now, Canadian brands are not dominating representation on Canadian RSS feeds. 

Dory Smith, head of Sponsorship and Advertising at Canadaland, told me that while she does work with a number of Canadian brands, she’d “love to see more”. This sentiment was echoed by Danny Brown, host of In-and-Around Podcasting and Head of Podcaster Support & Experience at Captivate.fm, who told me that despite being a Canadian-based podcast, he’s only actually locked in a few Canadian sponsorships. “I would say 90 percent at least are American, that's where all the brands seem to be and all the advertising money seems to be.”

Douglas explained that part of the reason why is that Canadian brands are less educated about what it takes to sponsor a podcast, and that makes them more hesitant to do so. “Particularly in Canada, there's just not a lot of advertisers that are comfortable or ‘get’ podcasts. Sponsors are not necessarily super savvy when it comes to podcasting. Walking them through that experience…it's just a longer lead time, to be frank.”

Not being educated on the nature of podcast advertising means a lot of Canadian brands are still thinking of it as an experimental marketing tactic. “In my experience, [Canadian brands] are trying to see how it works,” Dory explained to me. “Then they'll see ‘is this working? Is the podcast space a good place to be?’ And then they'll branch out from there and work with a few different podcasts.”

The small team sizes on a Canadian advertisers' end is also a reflection of how green Canadian brands are to the podcasting space – even when the brand is a large organization. Douglas says that this is evidenced in the widespread presence of host-read ads representing Canadian brands. “I was listening to Decoder, and they won't actually allow their podcast hosts to read the ads because of their particular journalism standards. That's why all of those ads feel mirrored to radio ads – it's the radio ad industry. It's smaller here, [Canadian brands] might not have the resources for it. [Small teams] are way more likely to trust the podcaster's sense of the audience, and what's going to work..”

Dory explained to me that from her experience, Canadian advertising budgets can range anywhere from $5,000 CAD to $500,000 CAD, but it ultimately comes down to downloads and audience reach. “If [Canadian advertisers] are launching a new campaign, a new province, a new offering, they just want to get it out there that they're new, and they're exciting, and they want to just reach as many people as possible. That's where you're seeing the very large spends coming from Canadians.” 

But those large spends aren’t common, as many Canadian indie podcasters don’t know what kinds of deals to ask for, and how to ask for them. That means educating Canadian brands about what a sponsorship deal looks like can get messy.

Andrew Gurza, host of Disability After Dark, told me that the few Canadian sponsorship deals he’s had have been quite small, only covering the cost of his RSS hosting fees. “The first year was like $200-$300 for the year. I had the National Parks of Canada [ask] me to do an ad for a few months [for] $300’”. I told Andrew about what Dory explained to me about average Canadian ad-spends on Canadaland shows, and Andrew was shocked. “I think because I have this warped sense of my own worth, I never charge what I'm worth. I live on social assistance, so I feel like I can't ask for a lot because I'm not allowed to, but now that I'm hearing what you said, I'm like, oh, fuck, I gotta re-jig that.”

Canadian brands like to build relationships with podcasts.

The need for podcasters to walk Canadian brands through a sponsorship experience means that those brands are often more hands-on. It’s a time consuming relationship for podcasters to maintain, and that means working with sponsors isn’t necessarily that accessible for independant, self-produced podcasts.

But once a podcast gets there, it can often lead to long lasting relationships between the brand and that podcast – something Canadian brands are more inclined to be a part of.

“There's more camaraderie [with Canadian sponsorships],” Dory told me. “There's more back and forth, having conversations, creating campaigns, being part of the campaign process. There's more of the fun part of advertising.” Heater was able to corroborate this notion, saying that at Acast, a significant number of Canadian brands are “interested in building deeper connections through hosts. Ad agencies and clients like to support Canadian Media and Canadian voices.”

Andrew’s podcast, a disability and sexuality podcast, has built an ongoing relationship with a local sex shop, Come As You Are, and he says that despite the low budget, he’s happy to keep working with them because of their shared values in supporting the disability community. “I haven't heard from them once about my [host-read] ads in the whole seven years that I've worked with them. I think they're like, ‘we want to support this’.”

For Danny, oftentimes Canadian brands have opted for season-long sponsorships.  “I felt that they've been more open to experimentation and suggestions from myself as to what works. Canadian partners or potential partners [are] interested in overall season sponsorships as opposed to campaign length sponsorships.”

To me, this signals a conservative approach by Canadian brands to podcast advertising – the idea that if they spend their money on a podcast, it’s got to be worth it. “If you're doing a really small spend, with podcasts repetition is key,” Dory explained. “Even if you have your most trusted host telling you about a product that they use, it takes a few listens, takes a few months. If the brands aren't putting in that spend, their test isn't big enough to figure it out if it works.” Canadian brands opting for long-term partnership and seasonal deals tell me they do have an understanding of podcast sponsorship strategy, but might still be holding their cards close to their chest.

American brands want to advertise to Canadians.

Like Dory and Danny, Douglas has worked with both Canadian and American brand deals on The BetaKit Podcast, and he told me that the difference in sponsorship deals is “complete night and day.” Heather agrees, and told me that “to compare the US to Canada is to compare apples to oranges - they are just entirely different.” 

The difference between American podcast deals and Canadian podcast deals isn’t just in how hands on they are or aren’t, but also in the metrics that they are focused on.

“Canadians test a lot on conversions, whereas Americans test on Pixel Tracking; Americans are testing more top of funnel,” Dory told me. “Top of funnel is ‘have they heard of this brand?’ and a lot of ways that people will track that is through finding out, have they clicked on it?”

The prevalence of pixel tracking also means that many American brands are using third party services to track their success metrics. “PodScribe, Arts AI, Spotify Ad Analytics – that third party will generate a pixel,’ Dory told me. “We attach it to the ad file and they can track how many impressions it gets. Certain pixel trackers can track if somebody went to the website after hearing the ad and what steps they took after.”

This is where relationships between American brands and Canadian podcasts can be noticeably lacking. Dory went on to explain that while Canadian brands often love to build more meaningful and collaborative relationships with podcasters and their content, American brands are focused on the numbers. “American brands for the most part – not all of them – [ask] ‘what is the CPM? What am I getting? Am I hitting my impressions?’ And that's fine, that's fair. They want a good ROI.”

Dory says that the reason for this may be due to American audience density. “In America, they're dealing in the millions – that's the audience scale they're looking for per show. We're Canada. We have a tenth the size of the population, maybe less.” She says that even though Canadaland is one of the largest networks in Canada, their numbers still don’t stack up against the American audience numbers. 500,000 impressions, a million impressions, it’s a big ask for Canadian podcasts.

Despite the difference in audience sizes, American and even global brands are definitely focused on advertising to Canadian audiences. Heather told me: “In Canada, although we have a smaller population than our friends to the south in the US, we do have an extremely passionate listener base that major brands are eager to invest in.” Dory also explained that American brands are “looking to speak to Canadian audiences'' - and this checks out if you’ve listened to any Canadaland podcasts. You’ve likely have heard host-read ads on their shows from Canadian brands like Douglas mattresses and the Rotman School of Business, but you’ll also have heard ad-reads for many American brands, too. “We have a really, really good relationship with Direct Response (DR) advertising; like AG1, Squarespace, Indochino, BetterHelp. New [brands] have been dipping their toe in and seeing; what is the Canadian market like?’”

If Canadian brands aren’t ready to dish out podcast sponsorships, American brands are certainly ready and willing.

But despite the smaller budgets, Canadian podcasters prefer the Canadian-way: collaborative host-read ads with brands they trust.

All of the Canadian podcasts I talked to explained that creating long-term relationships with a brand is their preferred way to get paid. Maybe it’s the Canadian “politeness,” but Danny explained that it makes these kinds of deals feel more secure in a way. “I make recommendations about tools and platforms all the time, and I do that because I use them and I like them. That's how I got one sponsor [to] sponsor a whole season.”

“I do find the Canadian relationship easier to work with,” Danny admitted. Andrew agreed, telling me that he likes to “have a really personal relationship with the people that I do ads with.”

Douglas explained that the joy in working with American brands is lacking, and that partnerships feel more transactional than anything. “They just see it as another channel and they don't give a fuck about your podcast. And I think a lot of podcasters out there, I think in a sincere way – I won't question the motivation – want relationships with sponsors. Ongoing continued relationships.” He also referenced the long standing sponsorships heard on Canadaland podcasts, saying that he has “an association with those brands through the podcasts that I engage with.” 

Canadian podcasts are ultimately looking for authenticity and value alignment in the sponsorship deals that they’re a part of, and ideally, those sponsors are also Canadian. “I'm always looking for Canadian [brands] first and foremost,” Dory explained. “Anything that is socially conscious, socially minded. A company that we would support, or a not-for-profit that we would support. I'll reach out to a lot of companies and be like, ‘Hey, we use your product and our host really likes that. Can we work with you?’ We don't work with any gambling and that is a huge chunk of the market: sports betting. We don't take sports betting money, but that's where a lot of [money] is.”

Canadian podcasters should be hopping on those relationships ASAP.

Douglas told me that creating relationships with brands is something Canadian podcasters should be doing “the minute they know who their audience is,” in order to build an “advertiser profile”. 

Douglas intentionally didn’t launch the first episode of The BetaKit Podcast without a sponsor locked in. “I would strongly recommend teeing up some sort of launch advertiser and then selling them on the opportunity – paying for the privilege of being the first person to try it. We wanted to create an expectation from the beginning that the podcast was monetizable.” He says that if a podcast is coming to a brand with an established audience in mind, at the end of the day it doesn’t matter how successful the ad is because “they have the prestige of saying ‘we were first’ and you have at least one historical of charging that you can take to every single one of the sponsor's competitors.”

Douglas went on to explain; “you’ve got to take ownership, put together really easy packages, make it super easy for them to sign up at launch and say ‘yes’ to multiple episodes. Sell them on the brand relationship. Don't make it about how many people ‘use the short code’ while listening to your podcast to make a purchase, or you're going to be in a really tough spot. If you can develop those relationships, there's much more of a longstanding expectation of value over time versus the immediate return. I think that's something that the industry really needs to figure out.”

In the meantime, Canadian podcasters like Danny have been testing hyper-local sponsorships, just like Andrew’s partnership with Come As You Are. “I think there's an opportunity for Canadian podcasters especially to reach out to very Canadian companies and work with them directly. There was one comic book store in Toronto that I did for a nerd podcast that I used to do. They were really happy with me suggesting, let's not do the traditional sort of pre-roll, mid-roll or whatever. I'll specifically target audiences in Toronto and say, ‘if you go to this comic book store, and you mention the show name they will give you a free sample of your comic book or graphic novel series or something’. It was very much geared towards getting foot traffic into the door.”

In Canadian podcasting, sponsorship deals are about quality over quantity.

There’s a balance at play for Canadian podcasters with a focus on Canadian audiences. While they’re more likely to build long-term and meaningful partnerships with Canadian brands, they likely won’t be raking in tens of thousands of Canadian dollars overnight.

Right now, most of the top podcasts in Canada are American. Given the small Canadian audience size compared to the scale of the American podcasting landscape, Douglas says Canadian podcasters should keep an eye on homegrown advertisers focusing their dollars on American podcasts, since Canadians are listening to those podcasts anyway. “Why would they ever consider [sponsoring] smaller Canadian podcasts?” he said, “it’s a self-defeating cycle.”

Douglas also pointed to YouTube as a place where Canadian podcasters will likely be looking to find funding. “If we're being really frank about this and you're looking to launch a podcast in 2024, you're doing it on YouTube because if you win with the algorithm there, you get ad revenue straight from the platform, and as a discovery tool through shorts and other things. You can grow your audience [and] get the pool of advertisers that go to YouTubers. You don't have to worry about being in this ‘Canadian’ – I don't even want to call it an ‘arms race’.”

For the time being, Andrew hopes Canadian brands will see the light when it comes to supporting homegrown content and take a chance elevating the ecosystem with more significant buy-in. “If you're a Canadian brand, find a Canadian podcaster, because we work really hard to make our shows and having ads helps us feed ourselves.”

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Kattie
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