Though the iPod is already as culturally ubiquitous as the Walkman once was, "podcasting" is now making the iconic MP3 player and its non-Apple cousins more than mere music devices - and advertisers are taking note.

Podcasting is so new that the term itself - combining iPod with broadcasting - was only coined in 2004. But it's been growing exponentially (Google turns up over 62.5 million hits) and waded into the mainstream last summer after Apple incorporated the technology into their latest iteration of iTunes.

In only two days its users subscribed to one million podcasts and suddenly "podvertising" became much more than just a possibility. Researchers are predicting that podcast consumers will number between 12.5 and 60 million by decade's end.

Essentially, podcasting is the publishing of audio content online for the purpose of downloading to a home computer or any portable listening device. Both independent and professional podcasts are generally produced in a familiar radio format, but podcasts have the benefit of time-shifting and portability so people can listen whenever they want, not whenever a program is airing.

But what really separates podcasting is its subscription model where new content is downloaded automatically to consumers.

"It's as impactful as radio, but the demographic is a little bit different because they've opted in," explains Bill Flitter of online marketing specialists Pheedo. "You can get pretty focused on the type of content you want and, of course, advertisers can really target specific content they want to be associated with."

Pheedo set up a sponsorship deal between Warner Brothers and the Eric Rice Show, a pioneering indie podcast that attracts about 5,000-10,000 downloads weekly. Warner provided exclusive songs, jam sessions and interviews with hard rockers The Used, which was incorporated into the program as "integrated ad content." Though clearly presented as paid content, it did not disrupt the flow of the program like traditional radio spots.

"Is it for everybody right now? No, it's not. Obviously if you look at the demographics of who is listening to podcasts right now it's the early adopters, people who are spending money more, people with broadband and these MP3 players," says Flitter. "Products that target that demographic are going to perform much better."

That's precisely why Lexus decided to board the podwagon with a six-month sponsorship of the entire podcast line-up of Santa Monica's KCRW, a flagship national public radio station with a desirable listener base. After prominent placement in iTunes, KCRW's weekly podcast downloads have approached 300,000.

"We saw this as a perfect opportunity to utilize an existing medium's enhanced technology to further leverage the Lexus brand," says Ann Bybee, Lexus corporate manager for advertising, brand and product strategy. "Lexus benefits in its ability to target potential consumers in a non-traditional way."

While demurring to disclose the costs - reportedly "tens of thousands of dollars" according to the LA Times - Bybee adds, "I will say that we think this partnership is a good value in allowing us to reach our consumers in a meaningful way and in allowing us to explore a new technology which we think has future potential."

But sponsoring existing podcasts are not the only avenues for advertisers.

Virgin Atlantic claims to be the first UK company to create their own podcast-specific content, complete with branded "podcatcher" software to download the feeds.

They started with a series of audio guides to New York (cool restaurants and shopping, must-see sights, off-the-beaten-track hotspots) and continued with podcasts on Johannesburg, Cuba and Shanghai with further plans for all Virgin destinations.

"The idea of sending automatic episodic content to consumers seemed like a really nice way for Virgin to open a dialogue," explains Neil Yoxall of Rainey Kelly Campbell Roalfe/Y&R, London. "The good thing about it is that it's pure content. If we'd made it very advertiser-y then it wouldn't have followed the spirit of podcasting. You want to give people the content they want and then let them come to us."

Other marketers are exploring how podcasting can expand beyond audio. Kraft uses the iPod's "notes" function to podcast text recipes to its customers while the October release of Apple's Video iPod heralds a whole new direction for podcasts.

"I think the future of podcasting...resides within the new video capabilities the 30 and 60 gigabyte iPods offer," predicts Dani Golden, spokesperson for Lexus' ad agency Team One. "You will see brands branch out and launch campaigns similar to the deal Disney Entertainment currently has with Apple [offering paid podcasts of Lost and Desperate Housewives]."

There are still hurdles to overcome for podvertisers, though.

Users can fast forward so advertisers need to develop a new marketing mindset and though it's easy to track downloads, it's hard to say if the podcasts have been listened to. As well, copyright concerns abound and though iPod-owners alone number over 22 million, it's still not comparable to TV or radio.

"Podcasting is gonna be a bit of a slow-burn. I think it'll take a while to really catch on and it will be a hell of a long time before it starts to replace full-on traditional media," Yoxall says. "[But] it's definitely here for a while and is more likely to evolve than disappear. It doesn't feel like a fad."

Like any new media, podcasting will become more sophisticated and widespread over time and offer increased opportunities for advertisers in a digital era where old rules no longer apply. As Bill Flitter points out, "It's not a world of mass media anymore. It's a world of mass niches."

RKCR/Y&R> www.rkcryr.com
Team One> www.teamoneadv.com
Pheedo> www.pheedo.com