Podcast Advertising 101: 4 Tips to Get You Started

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Podcast Advertising 101: 4 Tips to Get You Started

Brad Smith
Brad Smith


June 5, 2018

The number of Americans who listen to podcasts has more than doubled over the last ten years, according to Statista, with no signs of slowing down.

podcast advertising 101

And where there’s an audience, there’s advertising. Businesses are expected to spend over $500 million on podcast ads by the year 2020.

It’s no secret that podcasts are becoming one of the most popular channels for consumers to get information. Unfortunately, it’s not always easy for advertisers to know where to focus their budget in order to capture (and keep) the attention of the right buyers.

Steve Pratt, a partner at Pacific Content, puts it this way:

“Consumers are so empowered now that they can bypass almost any kind of marketing they want. People will ignore or skip anything they don’t like. So brands have to start making things they love.”

Thankfully, there are surefire ways to engage with podcast listeners and get a worthwhile return on your advertising investment.

Let’s walk through four things to consider as you plan your podcast advertising strategy.

But first, here are a few podcast advertising basics to help set the stage.

Podcast advertising 101: Terminology

To master any new marketing concept, you have to understand the basic framework first.

If you’re just getting started with podcast advertising, here are a few of the most common terms you’ll need to know to get started.

  • Pre-roll: an ad that gets mentioned at the beginning of a podcast.
  • Mid-roll: an ad that plays in the middle of a podcast.
  • Outro: the last few words of a podcast where the advertiser can slip in a final call to action.
  • Offer code: a coupon code that the host gives to the audience to track conversions directly to the ad campaign.
  • Native ads: advertising that matches its delivery platform, as if it is an extension of it.
  • Podcatcher: the platform or software used to play a podcast.
  • Direct response: marketing or advertising that can be measured and tracked—for podcasts this is usually in the form of a URL or offer code.
  • CPM rate: an ad expense measurement of the “cost per mille” (or per thousand) listens of a podcast.
  • CPA rate: a measurement of the “cost per acquisition,” or cost to acquire one new customer as a result of an advertisement.

Another way to familiarize yourself with podcast advertising is by simply listening to successful podcasts. Here are 18 of the top marketing podcasts, and Podbay.fm publishes a searchable ranking of the top-rated podcasts to give you some ideas for how to plug your message into popular podcasts.

best podcasts for advertising

Average Podcast Advertising Rates

According to AdvertiseCast, the industry average rates for podcast advertising are:

  • $15 for a 10-second ad CPM
  • $18 for a 30-second ad CPM
  • $25 for a 60-second ad CPM

Since CPM is cost per mille or cost per 1,000 listeners, your advertising costs will go up depending on how many listeners the podcast has. AdvertiseCast offers a handy cost calculator that will help you estimate your total costs. As you can see, if you run a 60-second spot on a podcast with 100,000 listeners, you can expect to pay about $1500.

podcast advertising rates

If you’re on a budget, smaller podcasts and shorter ad spots are obviously the way to go. (Also, check out these strategies for reaching your desired podcast audiences through other means, like low-cost Facebook ads.)

Now that you can talk the talk and have heard some effective ads in action, let’s talk strategy.

1. Find your fit

Here’s some good news: 75% of podcast listeners not only pay attention to podcast ads, but they also follow specific calls to action after hearing them.

The key is in the connection to the audience. For example, GirlBoss runs several popular podcasts that cater almost exclusively to women’s interests, and have a primarily female audience. It stands to reason, that despite its huge audience, an advertisement directed to male consumers (like a razor club) may not be the best fit for a GirlBoss podcast.

how to run a podcast ad

Don’t try to force your ads where they don’t belong based solely on the size of the audience. On the other hand, investigate audience fit before you spend a dime, but be careful not to make assumptions about buying behaviors that err too far on the side of subtlety.

Blue Apron is an excellent example of this. They recently ran advertisements on Adam Carolla’s podcast. It seems like an odd fit at first glance, but because Carolla is familiar with the Blue Apron brand and has cooked with their recipes before, the ads were authentic and not forced.

NPR is very transparent with their audience demographics, publishing statistics front-and-center on their podcast page.  They even share sponsorship insights.

podcast sponsorship

They understand that audience fit is crucial for podcast advertising success.

Companies like Midroll specialize in audience analytics. They say this about finding the right audience:

“It’s wise not to adhere too strictly to category. Don’t assume that comedy audiences aren’t also entrepreneurs, or that listeners to a sports podcast aren’t interested in a comedy special. You may be surprised at how broad and eclectic audience tastes and needs are.”

podcast advertising strategies

It’s a matter of connection with the audience.  Without it, the message is weakened, and credibility is lost.

Sling Media has seen two to three times more engagement from podcasts than they did from radio advertising. They did this by making the endorsement real and authentic. How?

Henry Hwong, interim Chief Marketing Officer, said, “We also want the host to be able to use the product. “For every host that we engaged, we sent a Slingbox over for them to use.”

It’s a simple insurance plan to make sure the host is familiar enough with the product to deliver a credible endorsement.

Here’s a practical (if slightly bizarre) example of the impact an engaged audience has on podcast advertising and revenue.

Nielsen found that among certain podcast genres, juice sales were boosted 8.8% for avid podcast listeners compared to juice-loving people who didn’t listen to podcasts. It may not seem like a big impact to the juice market until you realize that it equates to about $2 billion in annual juice revenue.

intro to podcast ads

The practice of engaging podcast listeners to influence consumer behavior has skyrocketed in popularity over the last several years, but podcasting has been around for nearly two decades

Companies like Apple have made it much easier in recent years to identify audience behaviors and track user metrics. With iOS 11, they released a redesigned Podcast app and added support for both podcast trailers and shows with multiple seasons.

In 2017, Apple introduced a podcast analytics service to offer podcasters and advertisers a deeper look into user behaviors, included when listeners drop from a show.

Thanks to new tools and better analytics, advertisers have had time to refine podcast advertising tactics. Now that you know how to find the right listeners, it’s time to zero in on the best way to get their attention.

2. Refine your approach

Podcast advertisements primarily fall into two categories:

  • Baked in: These ads are part of the actual podcast and are often read live by the podcast host. They will live on for eternity inside the podcast content. Everyone who downloads the podcast hears the same ad.
  • Dynamically inserted: These ads are inserted after the podcast ends, via an ad server. Not all users will hear the same dynamically inserted ad when they download a podcast. 
kinds of podcast advertising

(Image source)

How do you know which type you should use?

While there is a fairly even split between the two types, dynamically inserted ad spend grew by 51% over the course of a year, according to a 2017 podcasting revenue study.

dynamic podcast ad stats

And of the baked in ads, live, host-read ads continue to be the preferred delivery type.

types of podcast ads

There isn’t a one-size-fits-all approach, but several organizations have measured CPA (cost per acquisition) rates between the two ad types, and have found that baked in ads tend to be about 3.5 times more efficient than dynamically inserted ads, despite the increase in dynamic ad spending.

In November of 2017, HowStuffWorks completely revamped their podcast advertising strategy, turning from dynamic ad spending to baked-in ads. Why? Their audiences provided feedback that they felt “shouted at” with the dynamic ads. 

Kurt Kaufer, CMO at Ad Results Media, describes their ad preference research this way:

We took a sample of our largest clients in Q3 (who buy both baked-in and dynamically inserted ads) and measured CPA levels between the two ad placement tactics. On average, across all ad delivery types, baked-in ads were approximately 3.5 times more efficient than dynamically inserted ads from a CPA perspective.”

But is there a time and a place to use dynamically inserted ads? Absolutely.

For example, if you need to A/B test your ad messaging, use a dynamically inserted ad so that you can compare two variants of your ad against each other.

Another reason to use dynamically inserted ads is if your content is time-sensitive or contains an offer that will expire. You may not want it to live on inside a podcast for perpetuity if it isn’t evergreen.

Companies like Cabana specialize in helping advertisers pinpoint the right delivery mechanism for each of their ad campaigns.

Equally important to creating the right ads for the right audience, is a clear picture of what you’re willing to pay for your message to be heard.

3. Define your investment

Podcast advertising is powerful and pervasive—but it isn’t free.

Most podcasters use either a CPA or CPM formula to set their advertising rates, although some may quote a flat fee. CPM is the most common.

Before you even approach a podcaster to ask for an ad spot, you need a clear picture of your quantifiable objectives. In other words, what do you plan to accomplish with your ad campaign?

You’ll also need a realistic budget. Calculate how much it will take to reach your objectives and secure internal approval up front to spend it.

Here’s an example of a simple cost breakdown to put it into perspective:

If a podcaster’s set CPM is $25, that means you would pay $25 for every thousand (unique) downloads of the podcast in which you place your ad. In other words, if a podcast has 10,000 listens per episode, you would divide by 1,000 and multiply that number by your CPM, which is $25 in this case. Your cost-per-episode for this podcast would be $250.

podcast ad cost breakdown

If you’re unsure where to focus your ad budget or need some help creating a realistic cost breakdown for your campaign, then work with a company like AdvertiseCast to identify the right podcasts and how they charge advertisers. They can even handle the billing so you can stay focused on the messaging.

The best part is that their services will cost you very little since they charge a commission for their services, but it is typically covered by the podcaster.

Once you’ve committed budget dollars to podcast advertising, you’ll need to measure your success to iterate on your strategy and scale future spending.

4. Track Your ROI

To get the data you need to prove the return on your advertising investment, you should build some tracking mechanisms into your ads. There are several ways to do this.

One easy way is to include a vanity URL, which is a short, easy-to-remember web address to direct listeners to a landing page.

Slate Group Studios conducted a recent brand study for their investment podcast Wealth Wits. Through the use of a vanity URL, they determined that podcast ads were more than twice as successful than banner ads in driving brand awareness.

You can also mention a promo code in your ad that listeners can use when they purchase. It’s a simple way to attribute advertising spend directly to distinct ad campaigns.

In fact, 95% of advertisers use some type of “direct response” promo code in their advertisements, like this one from ShipStation.

podcast ad promo code

Offer codes draw a direct line between podcast advertising spend and conversions.

Another easy way to attribute podcast advertisements to conversions is through the use of surveys.

Ask buyers or subscribers how they heard about your brand when they sign up or make a purchase. It may fill in some blanks for leads that aren’t attributed to vanity URLs, promo codes or other advertising tactics, but resulted from a podcast ad. Growth Marketing Pro estimates a 30% response rate, on average for survey responses.

The old adage “what isn’t measured, cannot be improved” rings true for podcast advertisers. Incorporate at least one measurement tool in every ad campaign to arm yourself with the right data to attribute conversions and continually improve your advertising success.

Listen up!

In case you haven’t heard enough compelling podcast stats yet: 42 million Americans (or 15% of the US population) listen to a podcast every week.  That’s five times the number of people who go to the movies!

Advertisers recognize a rapt audience when they see one: 85% of people who click “play” on a podcast listen to nearly all of it.

Without the right research, however, it’s difficult to pinpoint the right podcast to deliver your message.

Advertisers that explore which podcasters have the right audience demographics for their brand are the ones whose messages lead to conversions. Understand where you fit, what kind of ads will resonate with your audience and how to invest the right resources to see results.

Brad Smith

Brad Smith

Brad Smith is a marketing writer and partner at Codeless Interactive, LLC.

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