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Podcast Advertising: The What, Why & How of Podcast Ads

Podcast Advertising: The What, Why & How of Podcast Ads

Podcasts are more popular than ever before. Every month, over 100 million Americans listen to podcasts. No wonder, then, that advertisers (big and small) want a piece of the podcast advertising action. If harnessed properly, podcasting can give advertisers access to a wide-ranging yet hyper-targeted audience, with a hugely positive ROI. Even though it’s a relatively new marketing strategy, podcast advertising is an extremely lucrative option for businesses. 

That said, if you’re new to the world of podcasting, it can seem impenetrable. In this guide, we guide you through the what, why, and how of podcast ads so you can get started with confidence.

Start with this video and read on for everything you need to know about podcast advertising.

What is podcast advertising?

Podcast advertising is podcasting as a medium to promote a particular product, service, or business. This involves podcast ads which are the promotional breaks in podcast content where the host reads an advertisement for a brand. In some cases, the ad is a pre-recorded message inserted into the audio. 

Podcast advertising can occur through podcast sponsorship, where businesses pay for their product, service, or business to be promoted during a podcast in the form of an advertisement. A podcast ad usually contains information about the product or service, along with any personal experiences the host has had with the product. The ad may also contain promo codes or discounts that the listener can use to get a deal when they try the product or service.

Businesses can also create their own branded podcast show where the whole premise is to promote their business. Although the overall aim of this kind of show is to sell a product or service, branded podcasts also offer listeners value-rich content that helps to build brand reputation and credibility and raise brand awareness.

How effective is podcast advertising?

Nobody can deny that podcast advertising works. If you doubt the effectiveness of this type of audio advertising, just take a look at the numbers! 

According to the Edison Research Super Listeners 2021 report, podcast ads are the most recalled ad types. This was corroborated by 86% of respondents. Podcast advertising has statistically shown to generate more than 4 times better brand recall in consumers than display ads. In a Nielsen survey, 70% of respondents reported that a podcast ad increased their awareness of a new product or service. This means that an overwhelming number of podcast listeners remember hearing an advertisement included in a podcast. 

 

 

Infographic about podcast ads from Nielsen
(Image source: Nielsen)

Podcast advertising is not only memorable, though. It’s also effective in creating tangible engagement. In the same Edison report, Super Listeners found that 76% of listeners act on podcast ads. 

In addition, distinct from ads on YouTube, 33% of respondents said that they ‘never or rarely’ skip podcast ads. This is excellent news for advertisers because this means maximum exposure and air time to a hyper-engaged audience.

Why do podcast ads work?

The power of podcast ads comes down to the nature of the medium. Audio content is highly effective at conveying information and messages. In addition to the compelling statistics above, there are three other reasons podcast advertising is so effective: 

Firstly, podcasts have a broad reach. With more people than ever listening to podcasts, businesses can easily access a wide range of audience demographics. There is such a diverse range of shows that marketers are spoilt for choice in terms of the audience and niche they choose to target. 

Secondly, podcaster creators tend to build up a loyal following. This translates to trust. When you combine a highly-engaged audience with a credible host that they believe and respect, this is a winning formula for marketers and advertisers. Businesses can leverage podcast hosts’ influence to their advantage. 

Thirdly, podcasts boast a hyper-targeted, captive audience that has chosen to engage with their content. This makes for a winning marketing formula because businesses can address their ideal customer they know has some interest in their niche.

Who can benefit from podcast advertising?

Podcast ads can have a mutual advantage, for both the brands ordering them and the podcast hosts reading them. We’ll take a look at both sides below.

Podcast ads for brands

Companies can choose to sponsor podcasts in a category that aligns with their brand and direct their ads towards specific demographics. This specificity means that the companies’ ROI is likely to be much higher with podcast advertising than with a more generalized TV or radio ad campaign that reaches general audiences. 

And because podcast listeners tend to stay more engaged, podcast ads can generate higher brand awareness than almost all forms of advertising, only surpassed by TV, digital video, and paid social.

Podcast ads for podcasters

Podcast creators see benefits from landing sponsorships as well. Paid ads can turn a podcasting hobby into a job, paying a podcaster to do what they love, potentially full-time. 

Some of the most successful podcasts can earn tens of thousands in advertising revenue per month! 

Of course, these wild success stories are in the minority; a more reasonable expectation for a mid-sized, sponsored podcast with 5,000-10,000 downloads per episode is somewhere in the range of $1,000 to $6,000 in ad revenue per month. But the more downloads your podcast gets, the more well-paid you’ll be!

How does podcast advertising work?

There are three podcast advertising categories: standard, affiliate, and branded podcasts. Let’s take a quick look at how each of these three works: 

Standard advertising agreement 

In this advertising deal, the business or sponsor pays the podcast host, production team, or company for ad space in their audio. The ad itself can be pre-recorded or host-read, and it can be fixed or dynamic (more on these terms later). Both parties will also agree on the ad’s placement within the audio content, which may affect the advertising rate. 

Affiliate marketing

In an affiliate marketing structure, the podcaster decides to join the affiliate scheme and market the business or service in question. They only get paid when and if their promotion results in sales or conversions. 

Branded podcast 

Some businesses prefer to invest fully in the podcasting world by creating their very own branded show. As we mentioned earlier, the overall goal of this type of podcast is to create engagement, raise brand awareness and ultimately, drive sales. Beyond this, however, this is also a great way to connect with your customers and community and offer them accurate value-rich content that relates to your brand.

Types of podcast ad insertions

As we mentioned earlier, ad placement can affect the advertising rate. Generally speaking, there are three positions that an ad can be played in: 

  • Pre-roll ads,
  • Mid-roll ads
  • Post-roll ads.

We’ll take a closer look at each one below.

Pre-Roll

Pre-roll ads are inserted into the beginning of the show, usually either before or after the intro. They typically run 15-30 seconds long. 

Mid-Roll

Mid-roll ads, as you might expect from their name, take place in the middle of a podcast episode. These ads are the longest, running between 30 and 90 seconds on average. They’re also the least skippable ads, since they fall directly in the middle of the podcast content.

Thus, mid-roll ads tend to be worth the most money to a sponsor.

Post-Roll

Post-roll ads are played at the end of an episode, usually right before or right after the outro. Like pre-roll ads, they typically run between 15 and 30 seconds.

Types of cost models for podcast advertising 

Different podcast advertising rates depend on the cost model that you choose. Let's take a look at the most standard:

CPM 

CPM stands for ‘cost per mile.’ This is how ads that are placed pre, mid, or post-roll are usually priced. CPM podcast's meaning refers to the price paid for every one thousand impressions or plays of the episode. The typical 30-second ad CPM is $18 and $25 for 60 seconds on an industry standard. 

This pricing structure is usually more appropriate for larger podcasts that regularly reach thousands of impressions each episode. 

Note that the way ‘impressions’ are quantified can vary, so clarify this when brokering an advertising deal. 

CPA 

CPA stands for ‘cost per acquisition.’ This is how an affiliate marketing model would be priced, for example. Under this cost model, the emphasis is on the number of conversions. Each time a listener converts due to the podcast ad, the business or sponsor pays out a pre-determined fee. 

Note that with this cost model, you will need a way to track conversions. You could use a unique coupon code or vanity URL, for example. 

Flat rate 

Some podcast advertising deals agree on a flat fee for promoting on the podcast. This approach is not that common, however. The contracting parties will negotiate the price and be affected by several factors, such as audience size.

Types of podcast advertising formats

Podcast advertising generally takes one of two forms: host-voiced and fully-produced.

Fully-produced/ Hybrid podcast ads

Fully-produced podcast ads are more like the traditional ads you’d hear on the radio– they’re usually recorded by the brand itself, rather than the podcast host. The professionally produced advertisement is then inserted into the podcast audio during post-production.

This type of podcast ad gives the brand complete control over the production quality, narrative, audio, tone, and more. Once they’re happy, they share the ad with the podcast, who then include it in their content in the way you’ve agreed. 

These ads are a more obvious interruption of the podcast’s flow because the voices and audio quality might differ. 

Host-voiced podcast ads

Host-voiced or read podcast ads are where the podcast host takes a brief interlude from their episode to promote your product or service in their own words. As the sponsor, you may give them some critical points or details to mention, or even a script - but the essential and valuable point is that this endorsement is in the host’s own words. This is a great way to harness the reputation that the podcast host might wield and use it to your advantage. 

They’re the most common in podcasts, which is understandable. These kinds of ads are far less interruptive than others because it’s still the host speaking and podcast consumers prefer host-read ads because they see them as more authentic than a generic ad read by a stranger’s voice. 

Branded podcasts

As opposed to self-contained ads within another person’s show, branded podcasts are where the whole show is related to a business, its sector, industry, and expertise. 

Note, this doesn’t mean that the entire podcast is one long sales pitch. Businesses often try and offer value-rich content to their target audience to build brand reputation and credibility. 

Discover examples of the best-branded podcasts and what you could learn from them in our guide! 

Different ways podcast ads can be inserted 

Data-driven or dynamic ad insertion

Dynamic ad insertion (DAI) uses the power of podcast hosting platforms’ ad servers to match listeners to different ads. This is a far more tailored and highly targeted advertising strategy that leads to far better conversions than others. 

The other advantage of DAI is that you can ensure that the ads are up to date without affecting the original audio of the podcast itself. 

However, do bear in mind that these types of ads need to be pre-recorded, so will sound more like an interruption than a host-read ad would. 

Baked-in ads 

These ads are recorded into the core audio file of the podcast episodes, so they’re an integral part of that recording. This means that every single listener will hear the same ads. 

How to purchase podcast ad space (for companies and brands)

If you’re a brand looking to expand into the podcast advertising space, there are a few ways to connect with podcasters. Let’s look at the three most common ways below:

1. Through an ad agency or ad network

If you’re a larger brand or have a big ad campaign in mind, it might be better to work with a podcast ad network. These networks may cost an added fee, but they do the legwork of searching out and locating the right podcast(s) for your needs. 

They can also utilize dynamic ad insertion, which lets brands have direct control over their ads. You can create an ad to fit your needs and update or tweak it as needed.

Some of the most popular podcast ad networks include:

The potential downfall of this approach is that you have less control over which podcasts you can access. 

2. Approach potential podcast shows yourself 

One way to buy ad space is to contact the podcasts you want to advertise on directly. This method can be more labor-intensive on your part, since you’ll be running the entire campaign yourself. However, choosing an individual podcaster can give you more control over the process. You can work directly with the podcaster to negotiate pricing and manage the content of your ad spots.

Since individual podcasters likely won’t be using dynamic ad insertion or targeted ad placement, going this route means your only option is likely to be host-read ads. Of course, since host-read ads go over better with listeners, this situation isn’t necessarily a bad one.

Once you’ve done the research and identified a show you’d like to partner with, reach out to the host asking for their media kit and more information. You can then offer a sponsorship deal directly to the podcast host or producer.

3. Create an affiliate or commission scheme 

If your business is interested in podcast advertising but is risk-averse, starting an affiliate or commission-type model might work best for you. In this type of advertising deal, there’s no need for upfront investment. Instead, you’ll payout on a CPA (cost per action) model, whereby the podcast earns according to how many of their listeners’ follow through from the ad. 

4. Start a campaign with marketplace platforms Like Podcorn

Much like ad networks, Podcorn connects podcasters to brands. However, Podcorn is a marketplace, not a traditional ad network, which comes with a couple of distinct differences. 

Podcorn has no upfront fees, for one thing. The platform also only deals in native advertising and host-read ads—in other words, dynamic ad insertion and fully-produced ads are not an option.

How to advertise on a podcast

While it’s important you know how to go about buying podcast ad space, you should also know what’s involved in actually advertising on a podcast. The steps below  follow what the general podcast advertising process should look like:

  1. Research: This includes figuring out your target audience, budget, and the type of podcast you’re aiming for.
  2. Decide on a podcast ad format: Choose whether you want a more organic host-read ad or one your company fully produces. Also decide between a dynamic ad approach, affiliate marketing as well as where you want your ad insertion.
  3. Choose and reach out to podcast shows to advertise on: You can either do this through a podcast ad network, or find podcasts that suit your brand, yourself. We suggest you keep in mind that podcast audiences can be niche and it’s worth making an effort to make sure your adverts are being heard by the right audience. 
  4. Create your podcast ad: Write out a script to send your podcaster or produce everything yourself and send over a final podcast ad recording
  5. Assess and adjust your podcast advertising strategy: After your podcast ads have gone live and you’ve set enough time to see results, observe the analytics and see where you need to improve or adjust your advertising.

How to sell ad space (for podcasters)

For podcasters looking to land a podcast sponsorship deal, the name of the game is audience size. If you have a large enough subscriber count, you’ll be more attractive to brands—which makes sense, since they won’t be willing to invest money in your show unless enough people will hear their ads to make the brand’s investment worthwhile.

Once you’ve built up a decent following, the best way to sell ad space is either to work directly with brands, sign up with a podcast network or to join an affiliate scheme. We’ll cover each method below.

1. Approach brands directly 

If you’ve got your eyes on a specific business or brand with which you’d like to work, why not reach out to them directly. This approach is not always that effective, and you may receive some rejections before hitting the jackpot. The advantage, however, is that you maintain control over who you work with and what you advertise.  

To find the right brands to pitch, do a little digging. You can:

  • Check other podcasts in your niche: What brands are already advertising on these shows?
  • Consider your audience: What kinds of products or services are they likely interested in?

Make a list of likely brands that may seem like a good fit based on these criteria. Pitch these brands using a sponsorship proposal highlighting the value your show could bring to the company. 

If you need a good example to get you started with your email proposal, check out our free pitch template in our post: How to Get Podcast Sponsorships.

2. Sign up to a podcast ad network 

If you’re looking to sell ad space, but don’t know where to start, try signing up to a podcast ad network. They’ll help to match you with businesses looking to buy some ad space. 

Podcast networks, such as Midroll, AdvertiseCast, and PodcastOne, are the middlemen that help brands find podcasters to advertise with. 

By joining a network, you’ll be exposed to more companies and it will be easier to be approached with sponsorship opportunities. Of course, this advantage comes with a cost; most networks charge fees upwards of 30% of your earnings.

Note: this approach is best for bigger, more-established podcasts with a big following. 

3. Join an affiliate scheme

There are plenty of affiliate schemes out there that you can sign up for right away. These are a quick and effective way to use ad space on your podcast, with relatively low pressure on whether your promotions are effective or not. 

Check out Amazon Associates or Audible’s affiliate program for examples. 

3 Things to know before you get podcast sponsors for your podcast

Before searching out sponsors, it’s probably a good idea to have a solid understanding of your show and its data. Be sure you know the answers to the following three questions:

What are your audience's demographics?

First, what kind of people listen to your show? Try to find similarities in your audience makeup, whether that’s age, gender, occupation, hobby, or something else! You can usually learn a lot about your show’s demographics by checking your podcast host’s user analytics.

What’s your advertising podcast rate?

Next, determine which rate you’ll charge brands to advertise on your show. Factors like your follower count and how well-established you are will probably determine your podcast ad rates and how much you can realistically ask companies to pay. 

How many ads (and what type) will you offer?

You’ll also need to decide how many ads you’re willing to include in each episode. Ads can be pre-roll, mid-roll, and post-roll—and some podcasters run two or three ads back-to-back in each of these time slots. 

But beware of cramming in too many ads per show; listeners may be turned off if your podcast feels too salesy, so weigh engagement rates against potential podcast ad revenue. We recommend that you don’t let advertising content go above 5% of your show’s runtime.

Tips for running a successful podcast advertising campaign

If you’re sold on the idea of advertising on podcasts, but you’re not sure how to ensure a successful campaign, follow these three tips: 

1. Understand podcast advertising 

If you’re going to launch a successful podcast advertising campaign, you first need to understand the medium, the space, and what works. This includes knowledge of the different types of ads, why ad placement is essential, the difference between baked-in and dynamically inserted ads, and the different cost models. 

Once you’re able to wrap your head around the different options, you’ll be able to make decisions appropriate to your campaign. 

2. Choose the right podcast(s)

If you invest time choosing the right podcast to advertise with, you’ve done half the work. Taking time to research podcasts that align with your brand and that already have your ideal customers’ attention will help maximize the success of your podcast ad campaign. 

3. Set an investment amount

Like most things, at the end of the day, podcast advertising comes down to money. You’ll need to have a good idea of your advertising budget and which type of cost model will suit you and your business best. 

According to AdvertiseCast, standard podcast advertising rates range from $18-$25 CPM, depending on the length of the ad and the popularity of the podcast.

So for example, if a podcast that charges $20 CPM normally has 10,000 listeners per episode, the cost of sponsoring one ad would be $200.

So knowing the average rates of sponsoring an ad, what’s your budget range? Run that number through a CPM calculator like the one at AdvertiseCast to determine and evaluate your campaign’s ROI.

4. Build a clear message targeted to your demographic

The most successful ads clearly demonstrate the value your product or service provides to your customers. 

To do that, you should first have a deep understanding of your target audience. Make sure you’ve built an audience persona that you can reference when deciding which podcast niche to target. 

Once you have your audience demographics in mind, craft a compelling message focused on showing how your product or service solves a specific problem (or fills a particular need) that they have.

5. Let hosts demo your product before publishing the ad

If you’re using host-read ads, it’s crucial to let them get first-hand experience of your product or service. 

One of the most powerful things about podcast ads is that the host gives a personal recommendation to their listener, who has built up trust in the podcast host. So if the host has personal experience with your product, they’ll be able to tell an authentic story about it—which will lead to better results.

6. Test ad performance over time—Rate of Conversion 

Tracking the effectiveness of a podcast ad is critical, since it helps you determine what’s working and what isn’t. 

Perhaps the simplest method of tracking individual ad performance is to send listeners to a unique landing page reserved only for podcast leads, then track the traffic to that page. 

Or, if you want more granular metrics, you could give each podcast their own promo code or discount code. By using a podcast-specific code, you’ll be able to see which podcast ad resulted in a conversion. 

Another option is to use a question like “How did you hear about us?” at some point in the purchase process or registration form. Whichever you choose, these methods will help you determine which podcast ads are generating sales—and which aren’t.

Podcast ads examples

Need some inspiration? Take a look at these examples of some of the best podcast ads: 

Host-read ads for Peloton on I Don’t Know About That, True Crime Obsessed, Office Ladies, Court Junkie, and Chatty Broads with Bekah and Jess

Pre-roll host-read ad for Amazon Music and Uncommon Ground on This American Life. 

Dynamic ads on JaackMaate’s Happy Hour

Podcast Advertising FAQs

How do podcasts make money?

There are lots of different ways for podcasters to monetize their work. Advertising isn’t the only income avenue. You could offer paid podcast subscriptions, sell merchandise, and more. Check out our guide for a complete overview of your options! 

What are the biggest podcast networks?

There are a lot of podcast networks out there, but some of the biggest are Gimlet Media, Wondery, Radiotopia, Podcastone, and National Public Radio

Who advertises on podcasts?

While podcast advertising has the potential to benefit a diverse array of companies, some industries are currently the leaders in podcast ad investment. 

According to MediaRadar, Media & Entertainment, Financial, and Tech companies make up more than half of the total podcast advertising spend. Next on the list are Retail, Professional Service, and Apparel companies

How to start podcast advertising?

If you’re a brand looking to get into audio ads, follow one of our tips above - either approach a podcast directly, go through a podcast network or start an affiliate scheme. 

If you’re a creator looking to monetize, try reaching out to a brand directly, signing up for a podcast network, or joining an affiliate scheme! 

How much do podcast ads cost?

Wondering how much it is to advertise on podcasts? Unfortunately, there’s no one-size-fits-all formula. However, you may be able to find some industry-standard rates for reference. The rate you pay will depend on your cost model, as well as what you manage to negotiate. If you go through a podcast network, you may have to pay a small proportion to them. 

How do you measure podcast advertising success?

Luckily, with podcast advertising, you have quantifiable metrics and insights by which you can measure the success of your campaign. By tracking the conversions and sales that arise from your ad, you can directly correlate success (or lack thereof) to your podcast ad. 

It’s easy to track direct sales from a specific ad by including a unique coupon code or URL. Indirect sales remain difficult to attribute.

How long are podcast ads?

Depending on whether they’re pre-roll, mid-roll, or post-roll, podcast ads generally run between 15 and 60 seconds each.

What’s the right cadence / frequency for podcast advertising?

According to Ilyas Frenkel, the former manager of Growth at Squarespace, the best frequency for testing advertising success with a podcast is about once a week per show

You’ll be able to tell which shows saw the greatest results in a timeframe of 8-12 weeks, and then narrow your focus to the best-performing podcasts after that.

What are the demographics of podcast listeners in the U.S.?

The average podcast listener in the United States is a middle-class white man with a college degree. According to Podcast Insights, statistics show that for Americans:

  • 51% of podcast listeners are male  
  • 45% of monthly podcast listeners have a household income over $75K
  • 27% of U.S. podcast listeners have a 4-year college degree 
  • 63% of podcast listeners are white 

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