Since its humble beginnings in the mid-00s, the podcast has grown from a niche audio format to one of the most popular forms of online content consumption. Today, there are almost a million active podcasts (and millions more individual episodes) available across a wide range of topics, with new shows popping up every day to cater to every niche imaginable.
While podcast broadcasting is undeniably well-suited to engaging niche audiences, the format itself is far from it. Listenership figures have exploded in recent years, with the industry experiencing a 29.5% increase in audience numbers since 2019. As of 2020, 12.5% of the UK population and 22% of the US population reported listening to at least one podcast per week, indicating a degree of loyalty and commitment from audiences that many other media formats can only dream about.
In light of these figures, it’s no surprise that an increasing number of brands are looking to advertise to this captive audience. For many years, podcasting was the reserve of hobbyists and bedroom broadcasters, with very little in the way of monetisation. But, as audiences have grown, so too has the opportunity to profit from podcast advertising. In 2021, US podcast revenue stood at $1.3 billion (£840 million), but analyst predictions indicate this will reach $2.7 billion (£2.2 billion) by 2025.
At The Bank, we are seeing an increasing number of clients looking to utilise this burgeoning medium to reach the new breed of podcast consumers. However, even amongst seasoned advertisers and marketing professionals, we have noticed there remains a great deal of confusion surrounding how best to approach this unfamiliar advertising channel.
In this blog, we aim to provide some clarity on the subject, answering some of the most commonly asked questions, and giving you all the information you need to build a successful podcast advertising campaign.
Cast Some Light: The Benefits of Podcast Advertising
Podcast advertising offers several distinct advantages over other media delivery formats:
Where are you when you listen to your podcasts? My guess is you’re listening while you’re doing something else—maybe you’re commuting, working out, or cleaning the house. Whatever it is, most of your attention is likely on your podcast rather than the mundane job in front of you.
In this sense, podcast sponsorships offer the kind of distraction-free advertising tunnel that few mediums can supply.
As any marketer knows, the annoyance factor is a key metric for measuring the efficacy of an advertisement. If an ad is intrusive or interrupts the user experience, it is likely to do more harm than good to brand awareness, consumer engagement, and conversion.
According to a survey conducted by Nielsen, a massive 78% of podcast listeners said they were not annoyed by podcast ads, while 62% said they would think about purchasing the product or service they heard about. The takeaway:
Low Annoyance + High Engagement = Happy Advertiser
Podcasts also offer a degree of flexibility that is unmatched by other audio platforms. Rather than being beholden to strict scheduling, most podcasts are released on a weekly or fortnightly basis, giving them the freedom to drop at any time that suits their audience.
Unlike radio advertising—which will usually run ad materials throughout the day—podcast sponsorships allow advertisers to target only the specific podcast episodes which will resonate with their intended audience.
One of the key struggles faced by advertisers is developing a sense of trust. In 2019, Edelman’s annual Trust Barometer found that only 19% of UK consumers believe what they hear in ads “most or all of the time”.
The comparative trust between podcast hosts and their listeners is one of the key advantages of podcast advertising. In fact, 56% of podcast listeners in the US say they trust what hosts say about products, while 60% have purchased something based on a host’s recommendation.
A 2020 study found that 48% of podcast audiences pay more attention to the podcast ads they hear than they do to any other advertising medium.
Additionally, at 86%, it found that podcast advertising offered the highest recall rate, beating 79% for website ads, 80% for social media ads, 71% for television ads, and 48% for magazine and newspaper ads.
These stats are hardly surprising when you consider that, unlike other audio platforms, podcast ads are generally read out by the host themselves. As such, podcast ads are almost part of the show. This form of native advertising guarantees high recollection, with audiences unconsciously associating your brand with their favourite podcasts.
One of the reasons podcast advertising works so successfully is that it can rely on the ‘theatre of the mind’. Since many people listen while doing something else, advertisers don’t need to worry about including flashy visuals, or other attention-grabbing elements.
By simply describing their product they can generate product and brand awareness, without the need to waste their ad spend on expensive studio production.
Your Podcast Listeners and You: Selecting a Show for Your Podcast Ads
As mentioned above, there are a lot of podcasts out there! Recent figures suggest there are 850,000 active podcasts, with over 48 million individual podcast episodes—and that’s just in English!
When it comes to selecting which podcasts to target with your advertising, it pays to be strategic. Here are a few key things to consider:
According to former Podcast Manager Sam Balter, the podcast audience demographic is generally made up of “affluent educated Millenials”. Generally speaking, this is great news for podcast advertisers—with their relatively high income and wide range of interests, these progressive ABC1 consumers can be effectively targeted by almost any business and any marketing strategy.
However, it’s important to remember that not all podcasts will have the same target audience. It’s vital to consider who your target audience is, and then find a podcast which speaks to them directly.
To do this, it’s worth checking out popular podcast directories like Apple Podcasts, Stitcher, and Spotify. You can also use Google to search for keywords related to your product or service or see if the podcast producer publishes demographics.
Naturally, the content and tone of the podcast itself are extremely important. You want to make sure that your ad is placed in a context that makes sense, and that it won’t be out of place or jarring for listeners.
It’s also worth considering the tone of the podcast. If you’re selling a light-hearted product or service, then is it a good idea to advertise on a podcast that takes itself very seriously? Conversely, if your product is a little more ‘heavy’, then an advert placed in a comedy podcast might not be the best idea.
As the recent controversy surrounding Joe Rogan proved, the host of a podcast can have a big impact on its audience. Make sure to do your research on the podcast host, and see if their values align with that of your brand.
When considering a podcast host, ask yourself: do they have a good relationship with their audience? Do they come across as trustworthy and likeable? Are they known for giving honest opinions? Most importantly for you, do you really want them associated with your brand?
Remember that from the moment you align them with your brand, your podcast hosts are aligned with you. Choose carefully…
Roll with It: The Types of Podcast Ad Placement
In most cases, your podcast ads will be presented natively and will appear in one of three positions. When buying your native ad space, consider the benefits and potential pitfalls of each:
A pre-roll ad plays at the start of a podcast episode, usually before the main content begins. Pre-roll ads typically last 20–30 seconds.
Usually clocking in at around 60–90 seconds, a mid-roll ad will feature during the main portion of the podcast. Smaller podcasts might choose to avoid including mid-roll ads, but longer podcasts often sell ad space across several mid-roll spots.
Post-roll ads are the last type of ad, and play at the (yup, you guessed it!) end of a podcast episode. Commonly running 20–30 seconds, post-roll ads usually feature after the main content, but before the podcast credits.
When it comes to ad placement, there are no hard or fast rules as to which is the ‘best’.
Conventional wisdom would suggest that mid-roll audio ads offer the greatest value, as more listeners hear podcast ads when they are deployed during the middle of a show.
Similarly, pre-roll podcast ads are likely to be actively skipped by listeners who still have their phones in their hand, while post-roll ad placements will see a higher drop-off rate (particularly among listeners who, like this writer, usually fall asleep by the end!)
Podcast networks are conscious of these factors, so mid-roll ads often come with a higher price tag. In the end, your may need to test ad performance across a number of different ad insertion points to see which works best for you.
Host with the Most: The Unique Benefits of Host-Read Advertising
Of the main ways in which podcast advertising differs from traditional radio advertising is the way in which the ad is delivered. On radio, ads are typically pre-recorded and read by a professional voice-over artist; this is due to radio marketers buying ad space in much larger blocks, with their adverts designed to be played multiple times.
The trend in podcast advertising is to have the host read native ads at various points during their show. These commonly come in two formats:
- Host-Read Ads: The most common delivery method for podcast sponsorship, a host-read ad usually takes the form of a short script read out by the host at a natural break in the episode.
- Live-Read Ads: Similar to host-read ads, but without a pre-defined script. Instead, the host will take a couple of minutes to talk about the product or service ‘live’, and in their own words.
The host-focused convention established by podcast advertising has numerous advantages over the pre-recorded paid ads favoured by radio media. Along with the trust and credibility provided by hosts promoting your products on their own show, host-read podcast ads tend to be significantly longer than their pre-recorded counterparts. Host-read ad segments commonly run for an average time of 48 seconds, while pre-recorded ads come in at a much shorter 27 seconds.
However, for companies who choose to sponsor podcasts via dynamic ad insertion (more on this shortly…), running host-read ads is often not an option. When you buy ad space programmatically, you may need to adopt the more traditional pre-recorded route for your ad campaign.
Let’s Make a Deal: Podcast Advertising Agreements
Advertising on podcasts is often surprisingly simple. There are a number of industry-standard licensing methods, all of which allow advertisers access to podcast sponsorships quickly and reliably. Some of the most common are:
Standard Advertising Agreement
The most common type of advertising deal in podcasting is the Standard Advertising Agreement. This is an agreement between you (the advertiser) and the podcast host, in which you agree to purchase a set number of ad spots over a certain period of time (usually 4–8 weeks).
This type of advertising arrangement is usually reserved for direct relationships between brands and podcasters, or for larger ad networks with many major podcasts in their portfolio.
Affiliate marketing is a type of performance-based marketing in which a business rewards one or more affiliates for each visitor or customer brought by the affiliate’s own marketing efforts.
In the context of podcast advertising, affiliate marketing allows podcasters to earn a commission on sales generated from banner ads and promo codes included in the main content and/or text descriptions of their shows.
For those companies unsure about advertising on podcasts, an affiliate marketing ad campaign allows you to benefit from low initial investment, as you only pay when the host successfully encourages their listeners to make a purchase using their promo codes.
A branded podcast is a type of marketing campaign in which a company produces their own podcast (or series of podcasts) to promote specific products or services.
Branded podcasts can be an effective marketing tool, but they are not without their challenges. Producing a high-quality podcast requires significant time and financial investment, and there is no guarantee that your show will meet the standards set by other podcasts.
Brass Tax: Podcast Ad Pricing Models
A common question we hear from our clients is how podcast ads are priced. With people dipping in and out, and options to skip through an ad entirely, how do you make people listen, and how do you balance this against ad costs?
Luckily, podcast ad pricing is relatively simple:
The cost-per-mile (CPM) pricing model is the most common pricing model used for podcast advertising. In this model, you (the advertiser) pay a set price for every 1,000 downloads/plays of an episode.
For CPM pricing, the formula for calculating your total ad fee is:
Cost per Episode = (Number of Podcast Downloads per Episode / 1000) x CPM
The cost-per-acquisition (CPA) pricing model is a type of performance-based marketing in which the advertiser only pays for successful conversions. In other words, you only pay when podcast listeners buy something as a direct result of hearing your ad on a podcast.
To calculate your CPA, you need to know your conversion rate (the percentage of people who buy something after hearing your ad)—once you have that number, simply take your total fee and divide it by your conversion rate.
The flat-rate pricing model is the simplest of all the pricing models, as it involves paying a set price for a certain number of ad spots.
Flat-rate deals are most commonly used for short-term advertising campaigns, or for major podcasts run by ad networks.
Under the Hood: Insertion Methods for Advertising on Podcasts
How does podcast advertising work in terms of getting ads into the media itself? A common question! Methods vary, but broadly speaking will fit into one of two categories:
Dynamic Ad Insertion (DAI)
DAI is a method of ad integration that allows podcasters to insert programmatic ads into their episodes in real-time.
With DAI, ads are not inserted into the episode until it is downloaded/played by the listener. This allows for more accurate reporting, as well as the ability to target ads based on listener location, device, and other factors.
Whilst offering supreme versatility, these dynamic ads are almost always pre-recorded, meaning you will not see the benefits offered by host-read ads.
Static Ad Insertion
Static ad integration is the traditional method of podcast insertion, in which ads are manually inserted into the episode file before it is published.
While static ads involve a more labour-intensive process, they do have some advantages, such as the ability to offer bonus content (behind-the-scenes footage; outtakes) in exchange for listening to the ad.
Media Buying for Podcasts
As media buying and planning specialists, most of our customers want to know how we can leverage our contacts and experience to deploy their ad campaigns.
At The Bank, we can assist with both planning and buying for your podcast advertising campaign, whether you choose to go it alone or work with us throughout.
Podcast Ad Network
A podcast ad network is a type of advertising platform that connects podcasters with advertisers. Ad networks typically offer a wide range of features, such as campaign management tools, real-time reporting, and access to a large pool of potential advertisers.
Podcast ad networks make it easy for podcasters to sell ad space on their show, and they also offer a way for advertisers to reach a large number of potential customers.
At The Bank, we work with a large number of podcast network agencies, including:
- Archer Avenue
Advertising via a large podcast network ad agency allows you to access multiple shows without having to draw up individual agreements. What’s more, it allows you to purchase programmatic ads, and utilise DAI.
On the downside, if your chosen network is not aligned with relevant podcasts, you may find yourself unable to access these shows. It’s best to ask yourself how many podcasts you want to advertise on. If you think there are only a couple which are relevant to your product, you may be best looking at an alternative option.
Podcast Advertising Exchange
A podcast advertising exchange is a type of online marketplace that connects podcasters with advertisers. Ad exchanges typically offer a wide range of features, such as campaign management tools, real-time reporting, and access to a large pool of potential advertisers.
Podcast ad exchanges—such as Podcorn—make it easy for podcasters to sell ad space on their show, and they also offer a way for advertisers to reach a large number of potential customers.
Do It Yourself!
If you have a very clear idea about which specific podcast you want to target, and you’re confident in your ability to negotiate directly with the show’s hosts, then going it alone may be the best option for you.
When taking this route, it is important to remember that you will be responsible for all aspects of the campaign, from negotiating prices to creating and inserting the ads.
What’s more, unless you have a pre-existing relationship with the podcast host, it can be difficult to get your foot in the door.
Get Creative: How to Create Sponsored Content for Podcasts
Whether you’re creating ad copy for hosts to read, or producing your own sponsored content, you will need to develop effective and engaging brand copy.
We asked our in-house creative team for some tips on how to come up with engaging content for podcast ads:
Step One: Hook the Listener
The first step is to hook the listener in with something attention-grabbing. This could be a statistic, an interesting story, or even just a joke.
Step Two: Introduce the Brand
Once you have the listener’s attention, you need to introduce the brand and explain what it is that you do. This is your chance to make a good impression, so make sure you focus on the benefits of your product or service.
Step Three: Call-to-Action
Finally, you need to offer a call to action. This could be something as simple as telling the listener where they can find out more about your brand, or offering a discount code.
You only have a limited amount of time to make an impact, so make sure your copy is concise and to the point!
How We Doing: Performance Monitoring and Optimisation
With your ad campaign up and running, you need to consider how you will track its performance, and optimise it going forward.
The first step is to set some objectives and KPIs. Do you want to increase brand awareness? Drive website traffic? Or generate sales? Once you know what you want to achieve, you can begin to measure your progress.
There are a number of tools available to help you track the performance of your podcast ads. Google Analytics is a good option for tracking website traffic, while CallRail can be used to track phone calls and conversions.
It’s also important to keep an eye on your overall customer acquisition costs. This will help you to determine whether your campaign is profitable, and how much you can afford to spend on it going forward.
The Bank: Your New Podcast Advertising Agency
At The Bank, we are a full-service podcast advertising agency. We work with a wide range of clients, from small businesses to large multinationals.
What sets us apart from other agencies is our focus on results. We take the time to get to know your business, your target audience, and your objectives—this allows us to create a tailored campaign that is designed to deliver the best results possible!
If you’re looking for an agency that can help you get the most out of your podcast advertising budget, then we would love to hear from you.