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PMG Digital Made for Humans

Podcast Advertising 101

7 MINUTE READ | January 9, 2018

Podcast Advertising 101

There’s a 40 percent chance that you, the reader, have listened to a podcast according to Edison Research and Triton Digital. An estimated 67 million, or nearly one out of every four of us, has listened to a podcast in the last month. That’s a lot of ears that advertisers have access to, and because of that, Bridge Ratings is forecasting spend on podcast advertising to surpass $300 million in 2018 and $500 million by 2020.

monthly podcast listening

Podcast advertising operates on a CPM model, equating an impression to a download. A unique download is based on a single IP address. Ideally, CPMs would be based on plays instead of downloads, but the current podcasting ecosystem makes that nearly impossible.

For the most part, CPMs for a podcast ad depends on the popularity of the show and the average number of downloads the show receives per month. CPMs can range anywhere from $10 to $150. The type of ad you choose and its position in the podcast will also affect the CPM you pay. Podcasts can also be sponsored, and the advertiser is charged a flat rate for a 100% SOV (Share of Voice).

It is important to understand the delivery method of podcasts because this determines how metrics are tracked and how ads are served. There are three ways users can listen to podcasts:

  1. Downloaded: The full episode is downloaded onto the user’s device and listened to at a later time. An internet connection is not required for playback.

  2. Online Listening: The podcast file is downloaded while the user is actively listening to the file. The file is stored in a temporary location instead of in a podcast library.

  3. Streaming: Similar to online listening, but a consistent connection to the server is maintained. This content delivery method is rarely supported in applications and is limited to web players (podcasts streamed through an internet browser).

The way ads are delivered through podcasts depends on the method of content delivery. There are two ways podcast ads are served:

  1. Integrated Ads: These ads are baked into the original podcast file that is then downloaded to the user’s device. Integrated ads typically lend themselves to being host-read. Because an integrated ad lives infinitely within the podcast, opportunities to target beyond demographics are limited.

  2. Dynamically Inserted Ads: The ad is inserted at the time of the file request. If the file is being progressively downloaded, in the case of online listening, the ad can be inserted during a designated ad break. This method of ad delivery allows for more precise targeting and scheduling.

integrated vs dynamic podcast ads

Compared to other forms of digital advertising, podcast ad impressions are rather hard to measure. Although download counts can be confirmed by analyzing server logs, ad impressions are difficult to track. A user can download an episode to their device but never play the episode or only listen to a partial episode. This issue exists because most podcast apps do not pass back playback information.

For example, iTunes and Apple Podcast app, which accounts for about 65% of podcast delivery, cannot report the number of plays because JavaScript is not enabled. However, after the release of iOS 11, Apple made changes to their Podcast app that allows creators to track user engagement such as when they start, stop, and skip within an episode.

apple podcast analytics

But because of Apple’s commitment to user privacy, that type of information will be aggregated and anonymized, leaving advertisers empty-handed when it comes to targeting data. According to the IAB, podcast players capable of notifying a server when an ad has been played accounts for less than 3% of the podcast industry.

When it comes to estimating audience size, subscriber count is the closest proxy.

Aside from show popularity, the position in the show where your ad will play will determine the CPM. Ad lengths and the number of ad segments vary by publisher and show, but generally, there are three ad spots:

  • Pre-Roll: Plays at the beginning of the show.

  • Mid-Roll: Plays in the middle of the content. Typically longer and more expensive than pre- and post-roll spots.

  • Post-Roll: Plays at the end of an episode. Generally the cheapest ad spot.

The success of your podcast advertising campaign rides on the ad format you chose. If you’re deciding whether or not to run the ad natively, take into consideration that podcasts are a highly engaging, lean-forward medium.

  • Host-Read: The ad is read by the host. The advertiser can either provide the host with a written script or give the host a few key talking points about the product/service and let the host improvise from there. This allows the ad to take on the personality of the host and piggyback off the trust the listener has established with the host. Host-read ads can also be in the form of an endorsement where the host talks about their experience with a product or service. These ads can be integrated or dynamically inserted.

  • Pre-Recorded: These ads are recorded prior to a show’s release date. These are typically produced by the advertiser.

  • Sponsorship: The advertiser is given exclusivity to all ad units within a show. Listen to an exampleof a sponsored podcast here.

There are also opportunities outside of these primary ad formats that allow for more customization and control. For example, advertisers can work directly with podcast publishers to create custom segments which allow them to align their product or service with the content of the podcast.  For example, a company like MailChimp may choose to do a custom segment in a podcast episode about email marketing.

For full editorial control, advertisers can opt into branded podcasts which allows a brand to have uninterrupted time with their audiences. Brands like Tinder and GE have experimented with branded podcasts and so far have seen success. But expect a well-produced branded podcast to set you back six figures.

Because of tracking limitations, measuring ROI for podcast advertising can be difficult. However, certain tracking procedures can be implemented depending on the campaign type:

Direct Response

  • Offer Codes: Advertisers create simple, easy to remember offer codes to use at checkout. Offer codes will also be unique to each show to measure its effectiveness.

  • Custom/Vanity URL: Similar to an offer code, advertisers will direct listeners to a custom landing page with a vanity URL that’s easy to remember where they can redeem an offer or learn more about the product.

  • Check out Survey: Advertisers provide a survey at checkout asking something along the lines of, “How did you hear about us?”. In tandem, the host may read an ad that asks the listeners to complete the survey at checkout.

Brand Awareness

  • Social Mentions: Increased mentions and discussions around a brand may be the result of a successful campaign.

  • Site Traffic: A spike in site traffic following a campaign can be indicative of a campaign’s success.

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If you’re wondering what the incentive is to invest in podcast advertising, let’s take a quick look at brand recall. In a survey conducted by Midroll, 80% of listeners surveyed were able to recall at least one brand advertised in an episode and 67% were able to remember a product feature or promotion.  Yowza!


Posted by Kara Eccleston

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