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There’s been a lot of discussion lately in the world of new media about the future of podcasting - people wondering what the current state of podcasting is and where it’s going.

eMarketer forecasts that the audience for podcast consumption will double in the next two years, but even that relatively rosy forecast is disappointing to some.

We recently talked to Chris Spencer, CEO of podcasting hosting mega-network Wizzard Media, to get his perspective on podcasting and its future.

In the last year, Wizzard has acquired podcast hosting services Switchpod, Libsyn, and Blast Podcast. Wizzard made headlines in January when it announced that it had delivered over one billion podcast downloads in 2007. Earlier this week, Wizzard announced that it was now trading on the American Stock Exchange (”AMEX”) under the ticker symbol “WZE.”

In our interview, Chris shared his thoughts on what a billion podcast downloads per year means, what he expects that number to be in 2008, and his predictions on what will happen with podcast advertising.

Elisabeth McLaury Lewin: Tell me about this whole billion downloads number. What does that mean for you in particular, and for downloadable media industry in general?

Chris Spencer: It’s a big number, isn’t it?

For us in particular, it means our servers are running well. Let’s face it: some people wonder whether this accomplishment gets credited to Wizzard, or to our content creators. We feel strongly that it’s 95% our content creators - they create the quality content, and they go out and market their show, and grow their audience. We get 5% credit for being proficient and productive enough to offer a stable inexpensive hosting solution, and that takes a lot of work.

But it comes down to the podcast producers. It’s a big accomplishment for the podcasters we host. It’s a big enough milestone for them and for us, and we publicized it so much.

In reality, what we’re trying to do is raise awareness for podcasting, specifically with the advertisers and the sponsors. It’s a number that’s going to attract a lot of the bigger brands that didn’t realize how big the potential here is. If there’s going to be big audience for podcasts, then that’s going to draw advertisers. That’s why we publicize it, not just for us, but for the whole industry.

Let’s look at the whole podcast industry: Right now, the industry is too small to worry if it’s us, or PodShow, or Podomatic. Right now it’s all about getting the advertisers and sponsors to know more about and be more interested in podcasting. Period.

I could talk about this for hours: it comes down to trying to demonstrate that this is a viable alternative to reach target audiences. More importantly, it is a product that people are consuming, and they’re loving it.

Online video behemoth YouTube announced today an initiative in which original content creators will now have an opportunity “to reap rewards from their work” and receive the same promotional benefits afforded to YouTube’s other professional content partners.

YouTube is inviting US and Canadian users to join their expanded YouTube Partner Program. Earlier this year, the YouTube Partner Program began rewarding the site’s most popular and prolific original content creators by allowing them to earn money from their videos. Previously, users eligible for the revenue-sharing program were those considered to have a “significant” audience on YouTube (as measured by video views, subscribers, etc.) Now, anyone living in the US or Canada can apply to become a partner at youtube.com/partners. Partners decide which of their videos they would like to generate revenue on YouTube, and in turn, receive a portion of the revenue generated from ads that run next to those videos.

YouTube also hopes that its expanded Partner Program will entice and benefit marketers, expanding both the quality and quantity of video content available to marketers.

Says YouTube: “This new program will improve the YouTube experience by inspiring users to develop more innovative, original content and encouraging marketers to develop interactive ads that are relevant and appealing to the YouTube community.”

The New York Times has an interesting article today about how the CW network plans to offer advertisers two more ways to try holding the attention of viewers during commercial breaks.

One idea is to run quickie commercials of only five seconds each. The other is to schedule a series with no commercial breaks at all, and instead incorporate sponsors’ products into each episode.

The proposals are the most recent to be advanced by the major networks, broadcast and cable, as they grapple with the problem of keeping viewers from changing channels during commercials — or, if the viewing is being done on digital video recorders, from fast-forwarding through the spots.

The need for the networks to “engage with viewers to stay with the commercials,” as Dawn Ostroff, president for entertainment at CW, described it, is intensifying for a couple of reasons. One is that Nielsen Media Research is about to change the way it reports the ratings data long used by advertisers to decide where to run commercials. On May 31, Nielsen is to start measuring the viewership of the commercials as well as the programs.

The other reason to tinker with traditional commercial breaks is the penchant of DVR owners to skip through spots when they play back recorded programs. That problem is getting worse as more households acquire DVRs.

The interest in “quickie” commercials and sponsored product placement is smart, and something that commercial video podcasters should evaluate, too. People are choosing Internet video because it lets them avoid commercials and make better use of their time. Instead of fighting this and tacking long ads onto Web videos, advertisers and publishers need to experiment with short, smart ads that are contextual and relevant to the viewer. This isn’t as obvious or as easy as it sounds, though, so the time to start experimenting is now.

According to new research from advertising service provider DoubleClick, viewers click the “Play” button on video ads more than they click on image ads. They also found that video ads are typically played two-thirds of the way through and video ad click rates are far higher than those of image format ads.

“Online video ads are quickly becoming the medium of choice to drive both brand awareness and sales,” said Rick Bruner, research director at DoubleClick. “The results show that there are clear ROI advantages to placing video ads.”

Key Findings

• Users click the “Play” button more than they click on image ads.
• On average, video ads play two thirds of the way throughVideo click rates are far higher than image format ads.
• Users are about 4 times as likely to click-through on video ads. Online video ads get click-through rates ranging from 0.4 percent to 0.74 percent. GIF and JPG image ad click-throughs range between 0.1 and 0.2 percent.

Online Video Offers Advertisers More Than Televison

“What’s particularly exciting about these types of campaign performance benchmarks is that they provide marketers with an important leap forward in measuring audience engagement and results that simply does not exist in traditional TV advertising,” said DoubleClick’s Marianne Caponnetto. “The best standard data you get on audience measurement of TV commercials is limited to reach and frequency or specialized brand studies. However, online video metrics available today, like interaction rate, play rate, video completion rate and so on, give advertisers much greater insight into how consumers are actually engaging with the ads and their brands.”

Companies are spending more and more online, a trend that is backed by figures from the Interactive Advertising Bureau. Internet advertising revenues for 2006 are estimated at $16.8 billion, a 34 percent increase over the previous year, when revenue was a record $12.5 billion.

“The increase underscores marketers’ understanding that Interactive advertising can engage consumers, build brands and sell products and services,” said IAB CEO and President, Randall Rothenberg.

“Results for 2006 confirm a very healthy environment for online advertising,” said David Silverman, partner, PricewaterhouseCoopers. “All signs point to a steady increase in the level of spend by traditional advertisers that are using online advertising as an important part of their media mix.”

The trend bodes well for podcasting and video podcasting. As more money and attention flow into Internet media, podcasters are getting a bigger and bigger slice of a growing market.

Internet media advertising is also shifting from companies testing the waters to companies using Internet media as one component of their media mix. This shift has brought with it an increased emphasis on accountabiity.

“The maturation of the Internet as an effective advertising medium is directly tied to its ability to deliver qualified audiences to marketers,” said Peter Petrusky, director, PricewaterhouseCoopers. “Moreover, online advertisers continue to test how to use the Internet with other media to leverage a combination of consumer touch points across different media.”

MediaWeek reports that podcasting is poised for a major growth spurt in ad dollars.

That’s according to a report to be released by eMarketer this week, which predicts that spending on podcasting advertising will quintuple over the next five years, from $80 million in 2006 to $400 million market in 2011.

eMarketer analyst James Belcher is betting that a familiar Web power player will spark much of that growth: Google. Belcher expects that by 2008, the company will develop a version of AdSense that can be easily adapted to podcasts, making adding advertising to podcasts as easy as incorporating AdSense ads into blogs.

“That should help grow the market,” he said.

Despite a relatively small base of users, podcasting represents an attractive medium, given its targeting, its low cost and its passionate user base, according to the report. “These people constitute an excellent media target,” Belcher said. “It’s a self-selecting medium. These people are into it, and they’re really into it.”