What You Need To Know About Podcast Advertising

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(By Jenni Skaug) The podcast industry continues to see dramatic year-over-year revenue growth that is being driven by the tremendous success brands are experiencing by effectively utilizing the medium. Through podcast advertising, brands are able to reach a targeted audience of educated, affluent listeners that are highly engaged and loyal.  

Understanding some key terms and elements of podcast advertising is a good first step towards reaping the benefits of all that this medium has to offer.  

So, what exactly are you paying for when you buy a podcast ad? The metric used to determine listenership, which in turn drives cost, is a download — the number of times a podcast episode is downloaded. Most podcast ads are sold on a cost per thousand (CPM) downloads basis, i.e., if the cost per thousand is $20 and a podcast gets 10,000 downloads, the cost would be $200. The IAB has set standards for determining downloads and the majority of hosting providers adhere to these standards. The CPM you’ll pay varies based on a range of factors with some of the biggest elements being spot placement and spot type.

The standard options for ad placement are pre-, mid-, and post-roll ads. The descriptions I’m providing are typical but, as with most everything in this medium, there are variations.  

  • Pre-roll — :15,:30, or :60 ads that run prior to episode content, typically 1-2 are available per episode;
  • Mid-roll — :60 ads that run within episode content, typically 3 or 4 available within a one hour episode; 
  • Post-roll — :15, :30, or :60 ads that run at the conclusion of an episode, typically 1-2 available per episode.

Mid-roll ads are the most desirable and also come at the highest cost. Mid-roll ads tend to be longer, more in-depth ads that occur within show content when the listener is fully engaged. Data shows that there are very low percentages of ad-skipping within episode content and that 85% of podcast listeners listen to all or most of a podcast episode.    

Pre-roll ads are the next best option, with post-roll being the least desirable and the least expensive option.  

In addition to the options available for spot placement, there are variations in the type of ad you can purchase. The two main categories are baked-in ads and dynamically inserted ads. Baked-in ads are part of the episode content and live in perpetuity within the episode. Dynamic ads are served through an ad server and delivered to the listener based on set criteria and do not live in an episode forever. Both ad types have their place in the podcast ecosystem and both can be used effectively to drive results.

There are subcategories within these two main categories.  

Baked-in ads have historically been host endorsements and are the ads we have become most accustomed to hearing. The ads can be host-read rather than host-endorsed, which usually has a lot to do with the product or service. If a host is talking about a company that offers home loans, he/she is likely to have not actually used the service, so they can’t truly endorse it, but they can have knowledge of the product and effectively speak positively about it. Baked-in ads don’t have to be in the host’s voice but they usually are.  These ads are best when seamlessly woven into show content but it’s becoming more commonplace for these ads to be recorded outside of the episode and baked into the content after the episode is recorded.

Dynamically inserted ads can also be endorsed or read by the show host and inserted into an episode or into the whole catalog of a show’s episodes. They can also be a radio-style, produced ad or an ad that’s read by an announcer.  

There are other options for podcast advertising as well. Branded content or sponsored segments can also be effective under certain circumstances. As this medium grows and changes, the opportunities and options for advertising will also evolve. There is no set right or wrong that applies across all products or services. There are data-supported best practices that vary by product, price-point, and campaign goals.    

Jenni Skaug is President of Sonicim.com and can be reached by e-mail at jenni@sonicim.com