Podcorn founders Agnes Kozera and David Kierzkowski
The co-founders of FameBit, which connects brands and YouTube influencers for marketing campaigns and sold to Google in 2016, think they’ve found a new sector in dire need of a functioning business model – the fractured, fast-growing and fairly chaotic podcast industry, especially its brutally inefficient advertising side.
The co-founders, Agnes Kozera and David Kierzkowski, have raised $2.2. million in seed funding to launch Podcorn, a marketplace designed to, yes, connect brands and podcasters for marketing campaigns. There are some crucial differences, however, between YouTube influencers and the podcasting business, Kozera said.
“We saw a really big opportunity in podcasting,” Kozera said. “There are now 700,000 podcasts out there, but 85 percent don't monetize. It’s really fragmented. There’s no central place where podcasts sit.”
Unlike YouTube – which has dominated the video influencer space and provided the lion’s share of revenue and ad opportunities for more than a decade – no major player has successfully concentrated an economic engine around podcasting.
Apple’s iTunes provides only a directory, pointing people to prominent programming in various categories. The tech giant, which birthed podcasting and provided its name, has never attempted to monetize its position.
In terms of a failure to monetize, the same could generally be said of other major podcast services, such as Google’s Android Store and Amazon. Even Spotify, which this year made several acquisitions in the sector (including of Anchor.fm, the site that hosts, syndicates and sells ads to my podcast, Bloom in Tech, across 10 platforms), has yet to announce major initiatives.
Smaller networks and services such as Wondery, Overcast, Breaker and Pocket Casts have their own ad solutions, premium services and subscriptions, but are limited in scale or reach.
All of which makes podcasting a difficult sector for many advertisers to effectively use, especially those trying to escape the tyranny of the pre-roll/mid-roll ad.
“Brands don’t have a way to collaborate directly,” Kozera said. “We want to bring native into podcasting, so it’s less disruptive. It’s providing liquidity to all these players.”
Native advertising is marketing that feels more like a regular component of a podcast or other piece of content. It could be an interview segment with a company executive as part of an episode, Kozera said, or include the company’s representative in an interview panel with other experts.
“We think it’s lot more inclusive,” Kozera said. “It can be whatever podcasters are already doing. The actual idea is that it’s part of the podcast. It’s not to be inserted linearly. It’s meant to be organic.”
Podcorn, which is on track to officially launch this fall, is designed as a self-service platform that lets podcasters and brands efficiently find each other, put together deals and make sure everything gets done and paid.
A brand signs up, creates a campaign and sets a budget. Then the Podcorn system uses machine learning to match the campaign with appropriate podcasts. Once a deal is agreed to, the system opens a virtual “work room” for the project, and holds funds in escrow during the campaign. After the project is done and approved, the money is released to the podcaster.
As part of its marketplace, Podcorn will suggest a variety of potential native-programming formats and integrations, but also leave room for podcasters and brands to create their own custom solutions.
“It’s better for the brands,” Kozera said. “Just having a 30-second pre-roll ad is not going to build a relationship” with listeners.
The overall structure feels a lot like FameBit, but Kozera said there are big differences in terms of the medium’s demands, audience expectations, creative formats, even the timing of campaign calendars.
Anchor and Megaphone do dynamic insertions to ensure ads run during a brand’s campaign window. Studios such as Gimlet and Wondery have their own brand ads. But Kozera said the Podcorn approach is designed to be more seamlessly integrated, which also benefits podcasters with more compelling content, and at a modest CPM compared to high-end video.
“It’s so intimate, and you have so much more real estate in a podcast,” Kozera said. “There’s a lot of room to do something super authentic and really unique.”
Podcorn is based in West Hollywood, Calif., but will soon relocate down the street to Beverly Hills. The seed round was led by Global Founders Capital, with participation from Bessemer, 500 Startups, and Alumni Ventures Group, among others.
