iHeartMedia lives a double life. While the largest terrestrial radio station owner in the U.S., it continues to embrace podcasting. Traditional media companies in this boat historically get tripped up in cannibalization concerns and fumbling execution. But history also advises to eat your own lunch or someone else will.

With that historically-validated — but still uncommon — traditional media playbook, iHeart has found all the right synergies with podcasting and its terrestrial operations. The key according to CEO and broadcasting legend Bob Pittman is to see podcasting as auxiliary distribution, rather than cannibalistic (see video below)

This bet has paid off in the last seven months when drive time — one of radio’s last vestiges of simulcast scale — has deteriorated. Those with podcast properties in their media mix have been able to offset those usage declines with the rise in streaming (including video and other formats) to shelter-in-place masses.

The numbers support this narrative, with podcast listenership up to 100 million U.S. adults according to Edison Research. eMarketer meanwhile projects U.S. podcast ad spending to grow 45 percent to $1.13 billion next year. If that’s on target, it positions podcasts with 21 percent of the digital radio ad market.

Doubling Down

Pittman and co. doubled down on these principles this week by acquiring Voxnest. As a podcast-native programmatic ad tech play, Voxnest will help squeeze more monetization out of iHeart’s growing podcast listenership. It will also bring more analytics to the table — a longstanding drawback of podcast advertising.

More specifically, Voxnest offers programmatic ad buying and dynamic ad insertion. Its ad targeting and analytics can enable audience targeting (who’s listening) and content/contextual targeting (what’s playing). Audience triggers include demographics, geography, device, and behavior/interests.

From an ad targeting perspective, this should add quality to the quantity that iHeart already offers. Its iHeartPodcast Network in total achieves more than 251 million listens/streams per month, according to Podtrac data cited by the company. This comes from a total bank of 750 podcasts that span genres.

This is key because podcast monetization is all about scale and consolidation. Given that the podcast world is so fragmented (another longstanding drawback) it’s hard for brand advertisers to achieve reach and unified campaign management. iHeart’s podcast network growth — and ad tools — address these issues.

IHeart’s network also notably sidesteps — and provides alternatives for — Apple’s podcasting hegemony. The latter is the biggest reason for the lack of targeting and analytics noted above. This is because Apple’s aggressive privacy approach locks down data collection which in turn precludes advanced podcast analytics.

Head Room

The Voxnest deal should meanwhile deepen iHeart’s podcasting bench, including — as noted — squeezing more monetization out of its growing listenership. By optimizing ad placements, it can increase advertiser performance, pursuant to attracting and retaining ad dollars. Programmatic options should do the same.

There’s also headroom. U.S. podcast programmatic ad spending is projected to double from $31.3 million this year to $68 million next year and $106.5 million by 2022, according to eMarketer. But the kicker is that programmatic accounted for only one percent of podcast ad revenue last year, according to the IAB.

Notably, iHeart was already involved in several tech-infused initiatives to optimize its podcasting monetization. One example is what we discussed with iHeart’s Eric Hadley at Localogy Place — geo-targeted SEO efforts to capture the search behavior that typically follows popular podcast episodes.

As for the Voxnest deal itself, iHeart already owned a minority interest, and now swallows it whole. This will give iHeart more control for deeper back-end integrations, which are required to achieve much of the above. Terms of the deal weren’t disclosed, but we’ll keep watching to see how it plays out.

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