John Newman is the kind of person who wants to involve companies like Spotify in podcasting. He has a niche interest – collecting sports cards – and is passionate and knowledgeable about the subject. When he went looking for a way to start his own show, Sports Card Nation, in 2018 Anchor stood out. The podcast creation app, now owned by Spotify, makes it easy to record an episode, and it offers a new feature for new podcasters: sponsorship options for everyone.
What Newman did not expect, however, was that the main advertiser using Anchor’s sponsorship feature would be Anchor itself. Newman says over the course of two and a half years on the platform, he has only had three sponsors through Anchor: Anchor, Pocket Casts and a company called The Black Tux. One of the companies, Pocket Casts, did not even pay its sponsorship, a source close to the company confirmed – instead, Anchor covered its costs to promote the feature. Newman says that both the Pocket Casts and Black Tux sponsorships lasted less than a month and that he did not earn more than $ 50 in total. Anchor, on the other hand, paid him about $ 2,500 to advertise his own service.
“It’s just a blip compared to Anchor,” he says.
Nine podcasters tell The edge same story: it seems that sponsorships from Anchor are not very sponsored, and they have received few, if any, opportunities outside of Anchor or Spotify itself. Three people say they have earned thousands from Anchor and Spotify alone. Three also say they have now left or are looking for Anchor’s platform because they are not receiving new sponsors.
The software from Anchor is designed to get someone to start a podcast by recording only on their mobile phone. It promises to help podcasters capitalize on these shows through a feature called Anchor Sponsorships, which launched in the US in November 2018, just months before Spotify acquired the company for $ 140 million. The functionality is similar to something like YouTube ads – advertisers are automatically linked to podcasts that match their target demographics, and hosts can then read ads for the sponsors and earn money.
This is a radical idea, especially for smaller creators. Usually, advertisers only work with programs that reach tens of thousands of listeners. With the Anchor approach, sponsors can spread their advertising impressions across many impressions, rather than focusing on one or two in a specific network. The host can also always pass on a sponsorship opportunity if they are not interested.
“We are determined to level the playing field for podcast monetization by enabling new creators to get paid and new brands to enter the market,” Anchor said when announcing the feature.
But it now seems that the grand vision is not breaking out, and that it may in fact cost Anchor money to keep working. Sponsorships are becoming more of a marketing avenue for Spotify to attract new creators to join their platform and keep them there.
Most podcasters The edge spoke to the application for Anchor’s sponsorships last year and received Anchor himself as their first sponsor. They received $ 15 for every 1,000 people they reached. These podcasters say that their Anchor sponsorships ended in the second half of 2020 and that they did not offer a possible renewal date or a new sponsor to replace them. Three hosts say they only earned about $ 50. Newman said his sponsorship ended briefly about three months ago, but he sent an email to the company and Anchor turned it on again at a different CPM, or cost per 1,000 listeners. It is unclear why.
Newman says he has had no sponsor other than Anchor for the past two years, though his program has grown to now reach between 1,500 and 3,000 people per episode. He estimates Anchor paid him about $ 2,500 over his nearly two-and-a-half years on the platform. He currently still has his Anchor sponsorship at a $ 17 CPM, along with other ads he received on his own outside of Anchor.
Blake Chastain, a podcast that creates two programs, including one called Gospels on ‘to bring about the confused subculture of evangelism’, says both of his performances lost their anchor sponsorships last year. His spirituality podcast reliably reaches 2,000 or more people per episode, he says, while the others are coming. He says he and five other podcaster friends have not been with a sponsor for months since the Anchor sponsorship ended, and they now want to move to Megaphone, a hosting company recently acquired by Spotify.
Megaphone costs money to use as a host provider, but in return it offers an advertiser market, which allows companies to install their ads in shows that fit their demographic target, just like Anchor’s offering. However, hosts do not read the ads. The main barrier to access is that Megaphone only offers services to programs or networks with more than 20,000 listeners per episode, which is why Chastain needs to coordinate with other podcasters.
“I feel that Spotify is well positioned to offer things to indie podcasters, just as much as to develop their own internal stuff by buying stores like Gimlet, but it just hasn’t materialized yet,” he says. ‘So that’s why you’re smaller, you’re just doing things on your own, but just keeping your options open. That’s why we’re investigating it [move to Megaphone]. ”
Two other podcasters mention that they receive sponsorships, in addition to Anchor’s own, including one for a sleep podcast called Deep sleep sounds and one for Spotify itself. The podcast that received the Spotify sponsorship, Dalton Trigg, says he and his co-host made $ 1700 from Anchor and $ 900 from Spotify while on the platform for about a year and a half. They have since left Anchor and joined the Blue Wire podcast network with their basketball program, Mavs step back, and use Simplecast for hosting.
“We made the switch because after almost two years with a fairly constant advertising money, at the end of last year we went two to three months in a row where we had no sponsors at all,” he sent a message. The edge. ‘And the NBA season is the busiest time of year for the pod, so it was frustrating for us – that it was suddenly cut off. Anchor Support continued to proclaim patience, saying that they kept trying to connect our new sponsors, but it was at this point that we had to make the move so we could continue to grow. ”
The fact that Anchor seems to bankroll its own sponsorship function does not hold anything ahead of Spotify, especially not as the critical role that Anchor plays in the company’s growth strategy. Anchor offers its software and hosting service for free, bringing new podcasters into the field. It also increases Spotify’s own display catalog. The company said The edge that Anchor launched 1 million new shows in 2020 alone and handles 70 percent of Spotify’s podcast catalog. Spotify also signed Anchor creators for exclusive deals, and a spokesman said last month that 100,000 creators have earned revenue through Anchor’s sponsorship product to date.
However, the situation portrayed by all these podcasters suggests that while Anchor attracts creators, it may not make much money by selling ads. In reality, it just seems to be spending. The success that some of these podcasters have had in attracting external advertisers also shows that once they reach a certain audience threshold, they are sometimes willing to leave Spotify behind.
We contacted Spotify for information on what other advertisers are currently using sponsorships, as well as how much money the company has spent on these ads, but he declined to comment on the record.
Spotify did connect us to the podcast How long awayhowever, launched in March 2020 and distributed by Anchor with the most advertisements coming from Anchor Sponsorships. The hosts, Jason Stewart and Chris Black, say most of their ads market Spotify, Anchor and Anchor-made shows. Spotify and Anchor paid them ‘tens of thousands’ of dollars in advertising revenue in less than a year. (They also host a separate, Spotify-exclusive show that highlights Anchor’s latest feature – the ability to include music in shows – called How long is the radio.)
“It’s like an interesting ecosystem,” says Stewart. “It’s like a garden watering itself, as long as you have the good Spotify bags.”
They had three other sponsors about the existence of the program coming from Anchor sponsorships, including Manscaped, Solaray and Roman. All three, according to them, jogged for three months.
“It’s good to just have that Spotify and the Anchor as your baseline, even if you’re earning a day out of it at the beginning, or whatever, it’s just nice to see it,” says Stewart. “It’s like gambling or something. You look in your wallet and you can see how much more money you earn every day, and then it helps you track your growth and your goals, and having Spotify and Anchor there all the time was a great foundation to to build on top. ”
Citi analysts sent a comment to clients last week advising them to sell their Spotify shares, especially since the podcasting efforts have not yet resulted in a significant increase in premium subscribers or downloading applications. Anchor has been a success story for the company so far. Even these podcasters all say they are not using the app and find it podcasting accessible. Receiving money from Anchor also did no harm and was like a cherry on top.
But has Spotify entered the podcasting space to subsidize creators by making new shows, or to make more money? The sponsorship situation of Anchor is apparently testing the choice.