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What You Need to Know About Podcast Advertising

5 MINUTE READ | July 29, 2019

What You Need to Know About Podcast Advertising

Podcasting. It’s been the next big thing in advertising for a few years, but it’s still viewed as an emerging channel with limited measurability and options for advertising. The growth of this industry, however, is staggering. The number of weekly listeners of podcasts has nearly tripled from 2014 to 2019 and shows no signs of slowing down. Americans listen to seven podcast episodes a week and the average weekly consumption is over six hours according to Andreesen Horowitz

Image of a microphone in a podcast booth

The most popular podcasts in the space are those from NPR, iHeart, and PRX, which offer podcasts like How I Built This, HowStuffWorks, and Slidedoor. The vast majority of listeners, 51%, stream or download via Apple Podcasts, with Spotify a distant second at 19%. For those listeners who don’t have iPhones and the ability to choose Apple Podcasts, Google Podcasts launched in mid-2018 to fill that void. It will be interesting to see if this new podcast app dramatically grows the listenership of podcasts as it opens up a new audience to easily listen. Currently, the majority of podcast listening happens at home, but with the accessibility of Bluetooth-enabled cars and smart speakers, this landscape could change.

Listeners of podcasts tend to skew younger, more educated, and more affluent but are notoriously hard to reach via streaming audio or streaming video as they will pay for a no-ads subscription, according to eMarketer. Podcasts provide a more organic way to reach these paid subscribers when they are already highly engaged listeners. Currently, there is no way to block podcast ads with premium, no ads subscriptions to streaming services as they are primarily host-read and embedded into the podcast audio. With podcast advertising, advertisers have the ability to reach 60MM paid audio subscribers.

In addition to the benefits outlined above, podcasting ads are extremely valuable. According to the Wall Street Journal and Edison Research, 50% of users trust audio ads more if they hear them during a podcast, and 81% of listeners have taken action in response to podcast advertisements. Listeners connect with the host of the podcast emotionally and are more likely to take action when they hear the host recommend a product that aligns well with the content of the podcast. These listeners are highly engaged when they are listening, and the ads, when host-read, feel like a natural extension of the podcasts. 

There are three main types of podcast advertisements: host-read ads, producer-read ads, and recorded ads. Host-read ads have the most efficacy as they’re read by a voice the listener knows well and trusts. In fact, host-read ads are two times more likely to be trusted. Producer-read ads are read by someone at the network who is not the host. Lastly, recorded ads are produced by a creative agency. 

Host and Producer-read ads can both be built into the podcast or dynamically inserted, where recorded ads can only be dynamically inserted into podcasts.

Host-read ads are fun for the listener because the host can put their own spin on the ads to make them fit more into the style of the podcast. A way to boost active listenership can be including themes of the podcast in the ad itself. For example, in the podcast The Last Movie, ads from Squarespace and Bombas Socks contained clues to a puzzle. The first listener to solve this puzzle won a prize, which naturally encouraged high attentive listenership of the ad.

Measurement is very tricky in the podcasting space, which is why advertising is still relatively new across the landscape. Podcast advertising almost operates like a radio buy with revenue generation. Embedded host-read ads have no impression tracking and are traditionally measured via redemption of a specific code generated for the specific show that is read by the host. However, with dynamically inserted ads that are inserted upon download, impression tracking is available through Google Campaign Manager and Barometric. With dynamically inserted ads, demographic and geographic targeting is available where it is not in built-in ads.

Several brands are finding success in the podcasting space. Lower costs than other digital media make podcasting easier for smaller, direct-to-consumer brands to enter the marketplace. Also, there is the trust aspect. A newer brand with a smaller following than a major player in the vertical will have a hard time getting consumers to consider them. But hearing a host recommend a brand allows these newer DTC brands to penetrate an audience effectively, efficiently, and with efficacy. Brands like Care/of, Casper, and Blue Apron all invest heavily in podcast advertising.

A handful of PMG brands across verticals are testing advertising with podcasts, but still see podcast advertising more as a reach play with limited measurement capabilities. Paige Gummere, Account Lead at PMG, says “podcast advertising is a really interesting space because users are so engaged, but it’s still really difficult to measure success.”

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Whether you’re heavy podcast listener like I am, or have never even heard of Serial, it’s time to embrace podcasting as an advertising medium. The space is only going to grow, with companies like Spotify investing in and acquiring content studios and distribution platforms. Podcast advertising is inherently more trusted leading to increases in consideration and brand trust and could be a great fit for your brand.


Posted by Madison Comstock

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