Beginner's Guide To Podcast Advertising

Learn about the ins and outs of podcast advertising

Updated over a week ago

Ad buyers and marketers from brands of all sizes are increasingly tapping into podcast advertising. According to Insider Intelligence, podcast ad spend is expected to grow to $3.53 billion by 2026. Since many brands and marketers are looking to add podcasting to their digital playbook, we’ve written a helpful guide to help those new to the space understand the fundamentals.

How Podcast Advertising Works

Podcasting offers versatile ad placements and formats. There are two main ad types in podcast advertising - host-read ads and pre-recorded ads.

  • Host read ads (sometimes “sponsor reads”) are incredibly effective because they tap into the influence of the podcast host, acting like personal endorsements. Advertisers will usually provide a script or talking points, and podcast hosts will record the ad in their voice and tailor the content to their audience.

  • Pre-recorded ads are 30-second ads produced by the advertiser, but not featuring the podcast host. These are usually dynamically inserted into either pre, post, or mid-roll ad slots within a podcast episode.

Both types of formats can appear in designated ad spots (also known as slots) within an episode.

  • Pre-roll : Ads are played before the start of the podcast episode

  • Mid-roll: Ads are played in the middle of the podcast episode

  • Post-roll: Ads are played after the end of an episode

When it comes to ad placement, there are two methods used to fill the ad slots in an episode - ads can either be baked in or automatically inserted using a technology called Dynamic Ad Insertion.

Baked in ads are added to the audio file itself, making them permanent - that means that all listeners will hear the same ad when they listen to the episode. These can appear anywhere in an episode.

Dynamic Ad Insertion, on the other hand, live stitches ads into the designed slots (pre, mid, or post-roll) that are tailored to the person listening. This allows advertisers to get more value as their ads are heard by their target audience at the right time. It also allows podcasters to keep the advertising on their shows fresh, helping them to monetize their back catalogs.

One of the reasons why podcast advertising is so effective is that podcast listeners can be reached across many different platforms. Once your ad is added to an episode, it can be heard on apps like Spotify, Apple Podcasts, Google Podcasts, Amazon Music - and many others.

Purchasing Podcast Advertising

Podcast advertising is often sold on a CPM (cost per mille) basis. Both host-read and regular ads can be priced this way. If you want to purchase a host-read ad, this is typically known as purchasing a sponsorship. Here are the main ways to purchase podcast advertising:

  • Through an ad sales team: Popular podcasts are often represented by a network or sales team and usually require budgets to be a minimum of $10,000-$15,000 in order to work with an advertiser, although this can vary. Shows with tens of millions of downloads can have minimum budgets that start well above $100,000.

  • Directly through the podcaster: Smaller and mid-sized podcasters are very open to working directly with advertisers. With millions of podcasts available, it can be tough to find shows that are the perfect fit. Platforms such as Podchaser offer excellent tools to help brands identify the right podcasts to work with.

  • Acast’s self-serve platform: This is by far the easiest and fastest way to purchase podcast advertising. You can set up a campaign that runs across multiple shows with the option to target your audience by gender, age, location, Nielsen Audience Segments, and other demographic categories. Unlike working with sales reps or the podcaster, the self-serve platform does not involve any back and forth or negotiating CPMs with multiple shows - it's a fully automated solution and available at any budget level. Click here to sign up.

Advertisers are often tempted to purchase show-by-show basis, looking at a small pool of top-ranked shows with a large number of listens and downloads.

In the US, for example, this results in about 44% of advertising dollars going to the top 500 shows- but those shows only reach 12% of the total podcast audience. That means advertisers are missing out on reaching 88% of podcast listeners. That’s why Acast recommends purchasing advertising based on the audience you want to reach, rather than on a show by show basis. Mid-sized and smaller shows with niche audiences can offer advertisers the reach they need, but at much more affordable prices compared to the top shows.

Regardless of the type of podcast ad format you want to purchase, whether it's a sponsorship, a regular ad, or a branded episode - focus on the audience first.

Metrics & Benchmarks for Podcast Ads

If you’re new to podcast advertising, you may be tempted to use the same performance metrics for it as search and social media - CTR, CPC, or CPA. But podcasting is a cookieless, audio-based medium that requires a different approach to measurement. The podcast audience is listening, not scrolling or clicking.

So in the absence of measuring customer clicks - what metrics should you look at?

At the most basic level, start with reach. For podcast ads, reach is defined as the number of unique people who listened to your ad at least once, including streams and downloads. This metric is especially important for brand awareness campaigns, where the goal is to reach as broad an audience as possible. Always look for IAB-valid reach, like the one provided by Acast, to make sure your numbers are accurate.

In this case reach is similar to what you’ll see with search and social - it’s the summation of how many people were exposed to your ads. Now comes the fun part - how to measure direct response?

This is where podcastings’ unique attribution requirements come into play. How you measure attribution depends on the content of your ad and the structure of your funnel. Popular ways to measure podcast advertising ROI include :

  • Promo codes: Offering a unique code that can be redeemed at checkout

  • Vanity URLs: Telling listeners to visit a unique URL or landing page (that you are only using for podcast ads). Just make sure the URL is short and easy to both pronounce and remember.

  • Surveys: Adding podcasts to your “How did you hear about us” survey

If you’re looking to measure CPA or return on ad spend, you can also use 3rd party tracking services that leverage pixels to tell you how many people that heard your ad on a podcast ultimately visited your website, purchased an item or signed up for an account. Acast supports 3rd party attribution vendors such as ArtsAI, Podsights, Podscribe, and Claritas

Remember that since the audience is hearing your podcast ad, a clear & memorable call to action is absolutely necessary if you want to bring them into your digital marketing funnel.

Looking for guidance on how to create an audio ad using one or more of the attribution methods above? Check out our guide to creating the perfect audio ad here. Generally, along with strong content and a clear call to action, you’ll also want to make sure your ad sounds great. The higher quality your ad - the better the conversion rate.

What conversion rates should you expect?

Podcast listeners are less distracted and more engaged, making them a more receptive audience for advertising. According to the Super Listeners report, podcast ads are the most recalled type of ad – with 86% of respondents saying they remember seeing or hearing a podcast ad. For Social Media it was 80% and for websites 79%*. So how does this translate metrics-wise?

According to the podcast attribution platform Podsights, the average conversion rate for podcast ads to website visit events is about 1.32% across industries*. If you wanted an equivalent conversion rate for social media, you could compare this to the average click-through-rate for Facebook and Instagram ads, which is currently 0.90%

Using some quick back of napkin math, you can estimate the required ad spend and CPC based on these benchmarks. Let’s say you run a podcast ad with 200,000 impressions at a $15 CPM. This works out to be a $3,000 ad spend. If you set your frequency cap to three, this means that about 66,700 unique listeners will hear your ad a maximum of three times. We can use the 1.52% conversion to estimate around 1,014 visitors, which equates to a CPC of $2.95. Keep in mind that this is a very broad estimate and actual performance depends on a mix of factors like creative quality, ad spend, and total unique impressions.

Like any new media channel, you’ll want to test and learn how podcast ads can work for your brand and customers. The good news is that podcast advertising offers something for everyone - whether you’re running a brand awareness or direct response campaign, and whether your budget is $100,000 or $1,000.

To tap into the power of podcast advertising for your business, sign up for Acast’s self-serve buying platform today.

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