How did Squarespace know podcasts would get so big?

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In 2009, Anthony Casalena listened to a lot of podcasts, especially one called “This Week in Tech,” a roundtable where tech journalists got together to talk about things like Farmville, Foursquare, and the iFart app.

Although the website building business he started in his dorm room six years ago had yet to turn a profit, he decided to take a big gamble. He spent around $20,000 on an ad on the show to speak to Squarespace listeners.

“It was so expensive compared to anything I had done,” he said on Zoom from his vacation home in Montauk, NY, in September. This fall, he was working on a larger-scale ad campaign, including the Sunday Super Bowl ad featuring Zendaya.

The way Squarespace went from podcast spots to Super Bowl ads shows its 2009 bet was right. Podcasts might sell.

To find out if that bet on its first podcast ad on This Week in Tech worked, Squarespace built one of the first post-purchase surveys, the ones companies are now showering customers with. When he saw the results, Mr. Casalena was shocked. A third of the company’s new subscribers had heard of its product through the This Week in Tech announcement.

“So we became pioneers in trying to find all the up-and-coming animators that we could before they were very popular,” Casalena said. Everyone at Squarespace started looking for podcasts to advertise.

When a podcast host posted their promo copy — and especially if they highlighted that using the Squarespace promo code supported their show — the return on ad spend was huge. And, according to a former Squarespace employee, when that host was Joe Rogan, the feedback was almost unbelievable.

Other people later discovered the same thing about Mr. Rogan, who started podcasting the same year Squarespace started advertising. In 2020, Spotify offered him $100 million for his show.

She has also, in recent days, apologized for him. After several artists removed their music from Spotify because they believed Mr Rogan was promoting misinformation about Covid-19, and his past use of racial slurs drew new attention, Spotify’s chief executive sent to his staff an email saying “there are no words I can say adequately to express how sorry I am. (Mr. Rogan also apologized for what he called language” shameful”.)

The controversy erupted several months after Mr. Casalena and I spoke and, through a spokesperson, he declined to comment on Mr. Rogan.

The success of the podcast commercials made Mr. Casalena such a fan of advertising that in 2015 he decided to buy a 30-second Super Bowl ad that he says cost him $10 million. . “It’s a good deal,” he said. “What other advertisement do we do that gets picked up in the media by a hundred different sources and released for free?” It is very difficult to dispute this point here.

Mr. Casalena’s commitment to podcast advertising was so singular even in 2015 that when President Barack Obama – years after being a podcaster himself – appeared on Marc Maron’s show, Squarespace was the only company approached about advertisements.

Ilyas Frenkel, Squarespace’s head of growth marketing at the time, got that call from Midroll Media, the company that sold Mr. Maron’s ads. Mr. Frenkel asked the salesperson Mr. Maron was interviewing to set the advertising rate at $100,000. “He couldn’t tell me, but he said, ‘You have to do it.’ We said ‘OK’,” Frenkel said.

That year, FiveThirtyEight tracked the biggest podcast advertisers and found that Squarespace ran two and a half times as many ads as its closest competitor, Stamps.com.

The company advertised on more than 400 podcasts per month. According to a former Midroll employee, the company held an internal meeting because executives were concerned that one account, Squarespace, would account for a third of revenue.

The Squarespace team buying ads on Facebook and Google would be grilled in meetings because their return on what they spent on ads couldn’t compete with the team placing ads on podcasts and YouTube videos.

The podcast’s advertising budget grew so much that the team of four youngsters couldn’t spend it all. According to the former employee, at one point Squarespace considered removing ads that didn’t even mention Squarespace and simply promoted Podcast Awareness Month, something they were going to make up. Squarespace employees were the only group of people in the world who ever thought there weren’t enough podcasts.

Squarespace ad buyers were agnostic about audience size. If they spent $500 on a podcast with a small audience and scored 20 subscribers, it was worth it because people who pay an annual fee to host their website aren’t likely to leave and redesign their site. somewhere else.

Squarespace doesn’t care about being the podcast advertising company, but Mr. Casalena is reveling in the attention, making mentions on “Saturday Night Live,” the Netflix show “Only Murders in the Building,” and J’s song. Cole “My Life”. (“I think he really needed something that rhymes with ‘airspace,'” Mr. Casalena said.)

Dax Shepard said he had heard Squarespace ads on his favorite podcasts so much that he believed their ads helped legitimize his show when he started reading them. “It’s one of the few ads I know by heart,” Mr Shepard explained in an email. “It’s a party thing.”

Mr. Casalena said that since he founded the company, he has spent more than $1 billion promoting his brand across all platforms. Revenue from those ads, plus all that attention, helped the company go public in May, earning Mr Casalena himself $2.4 billion worth of shares in the $6.6 billion company. .

Long before anyone had the idea of ​​Web3 (the name for a decentralized internet running on cryptographic tokens), Mr. Casalena understood that people were looking to monetize every interaction in their lives.

He saw that Squarespace small business owners were selling services with goods. Online classes. See you tattoo. Tutoring. Reading tarot cards. The internet rule “information wants to be free” was starting to break down.

“People were able to get audiences in a way that they couldn’t get before through social media. But they don’t want to be beholden to social media,” Casalena said.

He is now betting on a world in which the social media accounts of people reviewing wine or dispensing makeup tips will become their main activities. “We see this bigger opportunity now at the time of sale,” Mr. Casalena said.

In 2019, Squarespace made its first acquisition, buying Acuity Scheduling, which helps businesses book appointments online. In March 2021, it bought Tock, which helps restaurants and wineries manage reservations and takeout orders, for more than $400 million.

After a 2021 Super Bowl ad in which Dolly Parton touted the parallel turmoil of angry people who felt taken advantage of by the gig economy (“5 to 9,” she sang), Squarespace refined its service economy message with a campaign featuring John McEnroe.

The former tennis great had stumbled upon a new line of work – doing voice-overs – and in the ad (and seven-minute mockumentary accompanying the campaign), Mr McEnroe is using Squarespace to promote his voice-over career.

To help everyone go from person to brand, Squarespace has created its new Video Studio app, which provides a library of images as well as voices that you can access just by typing. A company that started out advertising on podcasts basically changed its business to helping people create podcasts.

The decentralized economy, Squarespace predicts, will be choppy all the time. “The part of the economy that will be less commoditized is our individual experiences,” said Nick Kokonas, the Chicago derivatives trader-turned-restaurateur who founded Tock.

If 10 different merchants on Amazon sell the same product, he can buy the cheapest. “But the food is not like that. And personal training is not like that. These people whose market was once hyperlocal, it gives them global reach,” he said.

Mr. Kokonas believes that most businesses selling goods will add a service component, a trend called multi-modal spending that the pandemic has accelerated.

In this year’s Super Bowl ad, Zendaya plays a seashell saleswoman who uses Squarespace to offer seashell meditation sessions and seashell travel, becoming a “seashell celebrity.” Which isn’t an entirely unlikely job description in 2022. No doubt she’ll also have a podcast.

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