Let’s face it – traditional media is starting to lose its appeal. With our busy schedules, most people don’t have the time to sit down and read a newspaper or watch TV. This is a major bump for companies looking to advertise their products on mainstream platforms.
But what if you could reach your consumers while they’re driving to work, cooking or commuting?
That’s the beauty of podcast advertising: it comes in a format that is uniquely situated to fit into our busy lives. Podcast advertising provides consumers with information in bite-size chunks – all with just a click on your mobile device.
But how much does it cost to advertise on a podcast?
From consumer statistics to proper pricing, here’s a rundown on everything you need to know about advertising on a podcast.
Consumer statistics: what do the numbers say?
With a rapidly growing audience worldwide, the surge in podcast advertising comes as no surprise.
According to a recent study by Edison Research Infinite Dial, a whopping 155 million Americans listened to podcasts in 2019. That’s over one half of the US population – and the number is still growing. 54 percent of these listeners say that they are more likely to consider the brands they hear advertised on podcasts.
There are currently more than 800,000 active podcasts with more than 30 million podcast episodes. Compared to traditional advertising, 10 percent of podcasts listeners are more likely to buy products after hearing podcast ads. They generate up to four times better brand recall than scroll, pop-up, and static ads.
It’s clear that podcast advertising is a growing industry. Today, podcast advertising spending is currently worth $855 million globally, and advertising revenue is expected to pass the $1 billion mark by 2021.
With these podcast advertising statistics, it’s hard to deny that podcasts are on the rise and have a huge influence on consumer choices.
Why your business should consider podcast advertising
You’ve seen the numbers. But what makes podcast advertising so popular? Here are a few reasons why you should integrate podcast advertising into your brand’s overall marketing strategy:
1. Podcast advertising is the best way to expand your demographic. It helps you reach the audience that marketers desire most: the Millenials and Gen Zers.
According to Edison Research, 48 percent of monthly podcast listeners in the US are between the ages of 12 and 34. This age range indicates that usage of modern technology is more pervasive among the younger generation. It follows the same pattern as other online platforms like Facebook and Twitter.
Within this consumer group, 45 percent have a household income of over $75,000. This consists mainly of yuppies whose purchasing power is widely dependent on audio advertisements.
2. Podcast advertisements are five times more effective than web ads. Podcasts are highly engaging mediums; the format is both conversational and intimate. There’s a personal element to it – most ads are read live by hosts who have a massive following. And because listeners trust their favorite hosts, they’re much more receptive to the products and brands they promote.
Unlike website ads that are easily blocked or skipped, podcast listeners can’t scroll up or close a window when they see an ad. They’re left with no choice but to listen to the ad if they want to finish the entire podcast.
3. Podcast advertisements are accessible anytime, anywhere. Podcasts are readily available to anyone with a mobile device. Because it’s mostly audio, it allows users to multi-task while listening. As a result, many listeners have made podcasts a part of their daily routine.
Most platforms have made podcast access easier by offering them for free. The iPhone, for instance, comes with a built-in Apple Podcast streaming app. And lately, even Spotify has introduced a podcast section on its platform.
4. Podcast advertising generates up to four times better brand recall. In a recent study of 11,123 listeners, up to 80 percent could recall at least one brand advertised in a single podcast episode, while an amazing 63 percent have bought a product they heard advertised. The same study found that longer ad campaigns perform better than shorter ones.
5. Podcast advertising is precisely targeted towards a specific group. With the growth of content niches, practically all audiences and different topics are catered for. The large variety of podcast topics allow advertisers to rich specific consumer markets comprised of highly engaged listeners. As a result, brands can reach their target audiences faster and more precisely.
Types and forms of podcast ads: finding the perfect fit
Before you dive into purchasing an ad spot, it’s important to consider what kind of podcast ad works best for your product and marketing strategy.
Generally, podcast ads fall into two main categories:
Host Read Ads
Host Read Ads are the most preferred type of podcast advertisements.
As its name suggests, this type of podcast Ad is read live by the host during the podcast. These ads are often inserted organically and naturally when a relevant topic pops up. Most live read ads are usually ad-libbed by the host so that audiences feel like the ad is a part of the show. This makes the ad content more intimate because the host talks to the listeners in a conversational tone. It uses the host’s personality for brand endorsement.
Once a host-read ad becomes part of the podcast, it lives within the content for its lifetime. This means that everyone who downloads the podcast hears the same ad. As a result, advertisers will still reap benefits even after the initial advertisement has aired because new listeners who download old podcast episodes will still hear the original ad.
Dynamically Inserted Ads
These ads are inserted via an ad server after the podcast ends or during a commercial break. And because they are inserted dynamically, not all users will hear the inserted ad when they download a podcast.
Dynamically inserted ads are reserved for temporary promotions because the ad plays only until the offer still stands. For example, an ad could run for 10 days and be replaced with another ad once the offer expires.
These ads are often used to target listeners in a specific demographic. But since the ads are mostly prerecorded, they have a less authentic feel than a host-read ad. And because the ad is voiced over by someone other than the host, the abrupt change in voice can be unpleasant to some listeners.
After you’ve chosen your ideal podcast ad type, you’ll need to choose what specific time your ad will play. This is called podcast ad placements and there are generally three types:
- Pre-roll. These are ads that are read at the beginning of the podcast. These are short and concise and are usually around 15 to 30 seconds long. This positioning is focused primarily on brand awareness.
- Mid-roll. These are ads that are read in the middle of the show and can take up as much as two minutes per reading. Because the ad is integrated into the content of the show, this ad spot is often more expensive than pre or post-roll ads.
- Post-roll. These are ads that are read at the end of a podcast episode. They are usually the shortest and most cost-effective of all three ad placements.
Advertising rates: can you afford to be on podcasts?
One of the most important questions you should ask yourself early on is: how much does it cost to advertise on a podcast?
The amount you pay for podcast advertising will depend on a lot of factors, including the length and type of the ad.
Host-read ads are cheaper because you are basically paying the host to do the majority of the work: the script and the delivery. This means lesser overhead and production costs. Dynamically inserted ads, on the other hand, are more expensive because these are pre-recorded and would require you to hire a professional to do the voiceover and provide a script, separately. The price range for this lies somewhere between $250 and $2500 per hour.
When it comes to ad placements, the most expensive is usually the mid-roll because the ad is being read in the middle of the show. The cheapest is typically the post-roll, but you run the risk of losing listeners since the ad is read after the podcast has ended.
It’s also important to take into consideration that podcast advertising, like other media platforms, follows a different pricing structure. When you buy a podcast ad, what you’re actually buying is a time slot.
Generally, podcast ad rates are measured by two methods, cost per mille (CPM) and cost per acquisition (CPA).
Cost per mille (CPM)
In this method, “mille” means “per 1000 listeners” – the price that you will pay for every 1000 people who listen to your ad. This is measured using guaranteed user downloads, which are based on the number of subscribers a podcast has. Thus, your advertising costs increase depending on the number of listeners the podcast has.
This is calculated by dividing cost by impressions, then multiplying that number by 1000. For instance, if you agree to pay $15 CPM for every 1000 downloads and the podcast is downloaded 5000 times, then you have to pay a total amount of $75.
Most ads are sold based on the CPM method. According to AdvertiseCast, the current industry rates for a podcast with at least 5000 listeners are:
- $18 CPM for a 15-second pre-roll ad
- $25 CPM for a 60-second mid-roll ad
- $10 CPM for a 30-second post-roll ad
Cost per acquisition (CPA)
Cost per acquisition is the price you pay to acquire a customer. This is the number of sales or sign ups your business gets as a result of the ad. Thus, you pay out only when someone buys the product or service advertised.
In the CPA method, you pay a fixed price based on results. Rates here will depend completely on your agreement, so be sure to strike a good deal. It’s also common practice to pay podcasters a referral bonus in case the number of sales is extremely high.
Success rate: reliable ways to measure ROI
If you’re investing the bulk of your marketing budget on podcast ads, then you’ll need to know if the investment is worth it, right?
Measuring your return of investment (ROI) is an important step in any marketing strategy. The main goal of ROI is to track how many purchases are made as a result of your ad. It helps you:
- Check the impact your podcast ad makes on your overall business or brand awareness campaign
- Determine where your resources are used more effectively
- Identify the drawbacks in your podcast ad so you can rectify them.
Despite their popularity, podcast ads are still a relatively new advertising platform and marking your success rate will be a bit tricky. Unlike other marketing channels, podcasts don’t have a built in way to measure positive listener feedback. But there are still plenty of methods to quantify their impact.
Here are the four most popular ways to track your podcast ads’ success rate.
1. Promo Codes
Out of all the methods of measuring ROI, promo codes are the most common – with more than 95 percent of advertisers using it to track conversions.
Acting like a prize for listening to the podcast, promo codes are coupons given by the host to listeners that typically offers discounts or freebies. This usually comes in the form of a word or short phrase that listeners can access only if they tuned into the show. This is entered into the podcast’s check out screen.
The promo code has to be a unique and memorable word so that listeners can easily remember it every time they make a purchase. It makes listeners feel exclusive and as a result, will be more inclined to make a purchase. You will be able to use this code to track the number of orders that originate from podcast listeners.
2. Vanity URL (Custom URL)
Much like affiliate links, a vanity URL is a link or extension to your website that allows you to track how many people visited your site after listening to the podcast ad. It typically comes in the form of a shorter version of your website’s domain name.
Upon clicking the link, viewers are directed to a landing page that is specifically dedicated to converting viewers originating from your podcast ads. It might not give you an accurate number, but it’s a great way to check how your podcast ads are performing within your target demographic.
3. Check Out Survey
Check out surveys are typically used in addition to other methods, but not by itself. So if you want a more accurate ROI measurement, it’s a good idea to combine check out surveys with vanity URLs.
Check out surveys utilize a particular question that is posed during the check out or payment process to determine if podcast ads generate better viewership. The most common survey question is “how did you hear about us?”
In the case of vanity URLs, this question should pop up either when your viewer first visits the website or at the end of a purchase.
4. Social Media Mentions
This method may not track direct conversions, but it is an effective way to see where your ad stands.
It utilizes one of the best measuring tools – online traffic. An overall increase in your product mentions across different social media platforms like Facebook or Twitter is a great indicator of the success of your podcast ad.
Best podcast advertising networks
An advertising network’s primary role to act act as the middleman – it is an agency that connects companies or brands with respected podcasts. Advertising networks help you hunt for the right podcast that fits your advertisement needs and is a fast, hassle-free way to reach your target demographic.
The network usually charges a fee or percentage in exchange for their service. This ranges between $200 to $250 for a one-time run and as much as $1500 for longer runs.
Here are three of the best podcast advertising networks to help you connect with more listeners.
Midroll is one of the biggest networks that has worked with big wig companies like HBO, FedEx, and Audible. Midroll guarantees increased listenership by reaching 73 million people online and boasts an impressive collection of over 300 podcasts.
AdvertiseCast is one of the easiest and simplest networks to use. It boasts a 35 million monthly listener reach and 7,500 available ad slots. Its beginner-friendly platform allows advertisers like yourself to shop through more than 1,500 podcast listings. AdvertiseCast helps you get the best of your money’s worth with its 70-30 revenue-sharing agreement. Its user-friendly interface allows advertisers and podcasters to close a deal with a simple ad buy order.
PodGrid is an advertising network that caters to shows of all sizes – whether they have 100 or 1,000 listeners. It’s a great option to connect with listeners of smaller and newer podcasts. PodGrid is one of the best networks to reach more specific audiences of varying niches where your ad content will find relevance.
The bottom line
With a large and fast multiplying audience, podcast advertising has become one of the most effective marketing channels to date. A single podcast reaches out to thousands of people at a time – making it an impressive communication platform for connecting with consumers.
It may not be the cheapest way to promote your business, but the numbers don’t lie: podcast advertising yields an excellent success rate and makes for a worthy investment.