Podcasts are growing in popularity. According to Edison Research, the podcast audience has grown to 90 million listeners a month, up 113% since 2014. An increase in listenership in this medium means you have a chance to spend advertising dollars, reaching new and current audiences in different ways. But just because you can, doesn’t mean you necessarily should.
Spending part of your budget on a new method of advertising or convincing your boss that this is a good idea will more than likely cause you to pause. How do you know if spending money on podcast advertising is actually worth it? Will you see results? Even if other brands are seeing results, how do you know you will?
In this post, we explain the reasons why podcast advertising is effective and help you determine whether it makes sense for you to spend your money on it.
Why is Podcast Advertising Effective?
Although it is currently difficult to track hard metrics for podcast advertising, there are still some compelling reasons why we believe podcast advertising is effective. Let’s dive into them below:
There’s a Strong Host-to-Listener Connection
If you’ve ever gotten hooked on a podcast, it’s almost certainly in part because you felt a connection with the host. That’s because of what Glenn Rubenstein, the author of Podcast Advertising Works, calls “the voice inside your head.”
According to Rubenstein, “If you spend even a short amount of time listening to the radio, an audiobook, or a podcast, you begin to make a connection to the voice you’re hearing. After you spend hours listening to that same voice on a daily or weekly basis, it feels just like you’re listening to a friend.”
It makes sense. If you’re an avid podcast listener with a long commute, you could be spending up to 5-10 hours a week listening to the same podcast host. And who do you trust more than anyone? The people with whom you spend the most time and/or admire.
When you trust someone, it’s likely you’ll value their recommendations more than anyone else’s. The idea behind this is the same as word-of-mouth marketing and influencer marketing, and it works with podcast advertising, too.
When a host recommends a product, you’re more likely to remember it and purchase it.
You can see the direct correlation between an affinity for the host and the purchase of products in a study done by Midroll, which found that 72% of people who have listened to a podcast for four or more years have made a purchase because of that podcast. Additionally, 63% of Midroll podcast listeners have bought a product they heard advertised on a podcast.
Listeners are Engaged
Unlike more passive forms of media like TV and radio, if done well, people will search for and subscribe to podcasts—coming back repeatedly for more. This is a unique opportunity to connect with your audience when they’re actively engaged and ready to hear your message.
One of the reasons people are so engaged with podcasts is because they require your brain to create images of the story in your mind (unlike visual media, which provides those images for you).
Emma Rodero, a communications professor at the Pompeu Fabra University in Barcelona, explains that “…like reading, listening to audio allows people to create their own versions of characters and scenes in the story.” She believes that listening, is more active, “since the brain has to process the information at the pace it is played.”
Many of today’s podcasts also have staff, budget, and industry experience, and subsequently the ability to use sound effects and music in addition to just talking heads. The use of sound effects increases the level of mental imagery, causing listeners to pay more attention.
People are also engaged with podcasts because they’re often listening to them when they’re by themselves—cooking, driving, walking the dog, or working out. When people are alone, they’re less distracted and more able to fully tune in. Additionally, wearing headphones while you listen creates an even more intimate experience.
Add to this the fact that streaming audio is now easier than ever before, with newer models of cars becoming more connected with capabilities such as Bluetooth and USB cables.
“Connected cars are a boon for the entire streaming audio industry, but they’re especially exciting for podcast makers, whose shows are perfectly suited to in-car listening,” Kevin Roose says, “Just as TV watchers can now choose Netflix or Amazon streams over surfing channels, radio listeners will soon have a bevy of on-demand options at their disposal.”
You Can Accurately Target Your Audience
Your ability to target specific audiences through podcast advertising is one of the most compelling reasons to give this medium a shot.
“I think that the great thing about podcasts is that there is literally one for everyone,” says Christine Merrill, Account Executive at Gimlet Media. “There are so many podcasts in the world, and there are so many different niches.”
At Portent, we’ve seen this ourselves with podcast advertisements that we developed alongside our client MagellanTV, a documentary streaming service.
MagellanTV has many different genres of documentaries available, which allowed us to drill down our targeting. We could have gone after any podcasts with available advertising slots—after all, most people are interested in documentaries. Instead, knowing that they have a specific niche in history and science, we started with podcasts that focused on the same subjects.
In targeting those subject areas, we found that the podcast hosts were genuinely excited to work with MagellanTV because it was such a natural fit. In one instance, the host of a podcast we targeted accidentally doubled their time when talking about MagellanTV because they were so stoked about the streaming service (which they were able to try out before they recorded the ad).
You Don’t Necessarily Need a Huge Budget
Podcasts are priced on CPMs (Cost Per Mille, or thousand listeners). A CPM pricing model makes sense—the more popular a show, the higher the price of the advertising slots.
Initial prices may seem like a lot, but if you sponsor multiple episodes the pricing goes down, which is also better for brand awareness.
Let’s look at a couple of examples. MagellanTV sponsored the History on Fire podcast, which gets ~150,000 downloads per episode, at a cost of $2,000 per episode.
For one of our client’s who is in the development space, we placed ads with Developer Tea, which gets ~60,000 downloads per episode. We spent $1,500 per episode on ad spots.
You may be thinking, but the audience size is so tiny, what’s the point?
We’ve seen first-hand through our work that larger audiences don’t necessarily equal higher engagement.
Hack the Entrepreneur, another podcast we worked with, gets ~14,000 downloads per episode, but we saw the highest time on site (10:39) and page views (106) from this ad. Within the same campaign, we placed ads with The $100 MBA. They average ~70,000 downloads per episode, but our time on site was only 4:17 and our page views were 52—about half of the engagement we saw with Hack the Entrepreneur.
Don’t shy away from an opportunity just because it’s small. Think of it as you would keyword research. Even though some search terms have a smaller keyword volume, that doesn’t mean they’re not worth targeting; you can still go after long-tail keywords with smaller search volume if the user intent is there.
How Do I Know If Podcast Advertising is Right for Me? Things to Consider
Although podcast advertising is effective, that still doesn’t mean it’s right for every brand.
Below, we’ll explain a few things to think about before you start setting aside a budget for podcast advertising.
Challenges with Audience Metrics
If you’re pitching this to your boss, it’s likely they’re asking how you plan on measuring the ROI.
With podcast advertising, the answer isn’t simple. Podcast advertising analytics is still very much in its early stages, so we don’t have quick and easy-to-read metrics like we’re used to. We also don’t have a direct way to track conversions. Some podcasts offer their own independent tracking, but there aren’t any consistent practices in place yet.
There are, however, a few metrics we can start looking at now such as:
- Downloads per Episode
- Direct and Referral Traffic
- Exclusive Offer Code
- User Engagement
For a deeper dive into how you can track these metrics, check out Kat Shereko’s post, 4 Effective Metrics For Measuring Podcast Advertising.
Although it is still challenging at this point, there is good news on the horizon. Apple Podcasts is investing in podcast performance insights and Spotify acquired Gimlet Media and Anchor, two data-driven podcast platforms.
There isn’t an easy way to measure the efficacy of radio or TV advertising either, but advertisers continue to spend their dollars there. Don’t let the lack of current analytics stop you from experimenting with a possible new way to connect with your audience. We believe that podcast advertising analytics are going to get more sophisticated in the future as the medium continues to grow.
Challenges with Scheduling
You need to be comfortable with planning ahead if you want to run a podcast advertising campaign.
With the model we’ve been using at Portent, we start two months before we actually launch any promotions. Ultimately, this is dependent upon the popularity of the podcasts we’re working with. For podcasts with larger audiences, seeking out an ad placement spot on their calendar six months in advance may still not be enough time.
We recently tried to place ads on the Syntax podcast for the same client we mentioned above that’s in the development space. Syntax has ~28,000 downloads per episode, but they were booking their ad placements out six months in advance, which didn’t give us enough time.
Fizzle is another podcast that we worked with for the same campaign and client. Fizzle gets ~11,000 downloads per episode, and we were able to book with them two months in advance.
How far in advance you need to book depends on the popularity of the podcast spots you’re going after. Overall, schedules and budgets vary greatly. You may even be able to haggle and get a spot at a lower price.
Ultimately, we recommend researching what podcasts you’d potentially like to sponsor, reaching out to them, and seeing what they say. Once you start scheduling spots, you should stay organized by creating a calendar such as the one below:
You can also get more information about pricing and effectiveness from this fantastic article on Ahrefs Podcast Advertising: $51,975 Spent. Here’s What We Learned.
Types of Ad Placements
It’s important to determine what type of ad placements you want for your campaign.
In podcast advertising, there are three different types of ads: pre-roll, interstitial or mid-roll, and post-roll.
Pre-roll ads: occur at the beginning of an episode.
Mid-roll ads: occur in the middle or as a break during the show.
Post-roll ads: occur after the episode.
We believe that mid-roll ads are the most effective because people are highly unlikely to stop what they’re doing and skip past the commercials. If the ad is at the beginning or the end, they may skip it entirely. Because of this, mid-roll ad placements are typically the most expensive.
However, some podcasts will require you to use a combination of pre-roll and mid-roll ads. Having a mix of the two can work well.
Pre-roll ads can give listeners that first exposure to your brand, followed by mid-rolls to explain what you’re offering and who you are.
Running one mid-roll ad followed by multiple pre-roll ads can also work.
Bonobos frequently runs a full-60-second mid-roll ad the first week and then follows up with a few weeks of pre-roll.
This approach helps them keep their costs down while also repeatedly exposing the podcast audience to their brand since they know listeners usually listen to every episode.
In addition to the different types of ad placements, there are different styles for interstitial or mid-roll ads. You’ll need to check with your podcast host to determine what type of ads they provide.
Sponsor-produced ad: typically ends with a clear call to action and uses music, sound effects, or a voice-over artist.
Host-read produced ad: delivered by the show host but is often produced and may include an interview with a sponsor’s customer(s).
Host-read integrated ad: read by the show’s host organically during the recording of the show.
If done well, the host-read integrated ad can be one of the most effective styles of podcast advertising because it feels so genuine.
As we mentioned in the MagellanTV example, if you allow the host to use your product or service before they record the podcast ad, and it’s a good fit, they’ll be genuinely excited about sharing it with their audience.
Is Podcasting Going to Be Effective For Your Brand? A Checklist
Although podcast advertising is successful for many brands, there’s still a lot to consider before you decide to bring the idea to your boss and spend your budget on it. We recommend asking yourself the following questions to determine whether or not you’re ready to give it a go:
- What are you advertising?
What is your product/service? Are you clear about who you are as a brand?
- Does podcast advertising make sense for your audience?
Who are you planning on targeting through podcast advertisements? Does your target demographic listen to podcasts? What podcasts do they likely listen to?
- What are you offering?
Are you running an awareness campaign, or do you have an actual service or product for which you can give a discount or free trial?
- Is it that good of an offer?
Is the product or service ready for market? Is the price of the product competitive? Are you running any better offers, discounts, or lower prices elsewhere? Note: We do not advise this. If people do a quick Google search and find a better offer elsewhere, guess which one they will choose?
- What is your budget?
How much money do you have to spend? If you have a low budget, are there podcasts out there with lower prices, but highly targeted audiences that would fit your demographic? If you have a high budget, how much of it are you willing to allocate to podcast advertising?
- What is your timeline?
When are you planning on launching your campaign? Give your budget and which podcasts you want to advertise on, do you realistically have enough time to launch?
At the end of the day, authenticity is key when it comes to successful podcast advertising. If your product/service is market-ready and you can find podcasts that fit your niche, we recommend launching a few ads to test and see what works and what doesn’t.