Podcast ads can be a hugely helpful element in your podcast monetization strategy. Because listeners tend to pay more attention to podcast ads than ones on the radio, TV, billboards, and even social media, they offer a unique opportunity for podcasters and advertisers alike to reach their goals.
According to Statistica, podcast ad revenue is expected to exceed $2.5 billion by 2024.
But the whole topic of podcast ads can feel a little overwhelming. In this blog, we’ll break down how exactly podcast ads work and how you can use them to monetize your content and help connect your listeners to quality products and services that can benefit them. We’ll also share how to pick the ad model that is right for you!
Types of podcast ads
A podcast ad campaign involves the placement of audio ads within podcast content in exchange for payment from the advertiser. Podcast advertising campaigns allow podcasters to monetize their content and provide advertisers with an effective way to reach their target audiences.
Let’s break down the different types of ads podcasters can offer to brands and advertisers:
Host-read ads, also known as pre-recorded ads, are a type of advertisement commonly used in podcast sponsorships. This type of ad relies on the podcast host’s voice to deliver the message, often in a conversational manner.
The main advantage of using host-read ads is that they reach people who are actively engaged. Hosts have a unique ability to engage with listeners, making them more likely to remember the messages they hear. Additionally, host-read ads often come with built-in credibility because people tend to trust hosts and see them as reliable sources of information.
A pre-recorded podcast ad is an advertisement created and recorded in advance of a show or episode. Pre-recorded ads are typically played at the beginning, middle, or end of each episode and can be inserted into your podcast catalog via dynamic ad insertion.
Now let's look at how podcast ads are sold to advertisers and what that transaction looks like for both parties.
Selling podcast ad space: How to work with brands and advertisers
Podcasters can sell their ad space in a variety of ways. Here are the most common strategies.
- Join a podcast network: Podcast networks are often large companies with many podcasts in their portfolio, and they can give podcasters access to advertising opportunities that may not be available otherwise. In most cases, the podcast network handles all of the ad sales and insertion, leaving the podcaster free to focus on creating great content.
- Pitch directly to brands that resonate with you: Podcasters can work directly with brands to create pre-roll, mid-roll, and post-roll ads. This allows the podcaster to have direct control over the ad content and placement within the podcast, which can help build trust between their listeners and sponsor. Podcasters should be prepared to negotiate with sponsors on things like the duration of the sponsorship, rates, and any other items included in the deal.
You can also use an ad marketplace like Podcorn to help connect you with brands that are relevant to your listeners. This marketplace can be a great way for independent podcasters with a smaller audience to connect to brands they align with.
How does payment work?
There are lots of ways to get paid for selling ad space to advertisers, and it all depends on which ad model you choose to go with. Here is a full list of payment models so you can pick the right one for you.
• CPM (Cost per Mille): Advertisers pay a fixed rate for every 1000 impressions (listens) their ad receives.
• CPA (Cost per acquisition): Advertisers pay only when they get a sale.
• Flat Fee: Advertisers pay a flat fee to be featured in a podcast episode or series of episodes.
• Sponsorships: Sponsors typically pay podcasters a flat fee for each episode or a fixed rate for each month.
• Affiliate Program: Affiliates usually offer podcasters a commission on every sale generated as a result of the ad.
• In-Kind Exchange: Advertisers provide goods or services in exchange for ad space.
By understanding and utilizing these payment models, you can pick the best one for you based on the size of your show, your goals, the ad spend budget of the advertisers, the needs of your listeners, etc.
How podcast ads are inserted into shows
Whichever option you decide on, you can sell place your ads at various spots within your episodes.
• Pre-roll ads. Pre-roll ads are played at the beginning of a podcast episode and are usually shorter than mid-roll ads, lasting between 10-30 seconds. They are the most popular type of ad placement for an advertiser to purchase because of the high engagement rate at the beginning of episodes.
•Mid-roll ads. Mid-roll ads are the second most popular and are inserted into the middle of a podcast show.
• Post-roll ads: Post-roll ads are placed at the end of a podcast episode but are the least popular because listen rates drop off toward the end of an episode.
How podcasters and advertisers measure ad performance
Podcasters and advertisers measure ad campaign performance by tracking key metrics such as reach, engagement, and conversions. Let's break these down.
- Reach: Refers to the number of people who hear or see an ad. This can be measured by tracking downloads and listens.
- Engagement: A measure of how engaging the ad was. This can be measured with surveys and polls.
- Conversions: A measure of how many people took the desired action after seeing or hearing an ad. This can be tracked by measuring clicks, sign-ups, purchases, etc. By tracking these metrics, podcasters and advertisers can get a better understanding of their ads’ performance and make adjustments accordingly.
Tracking these metrics helps podcasters and advertisers understand the success of their ads and identify opportunities for improvement. It also allows them to adjust their target audiences and optimize campaigns in order to maximize ad performance.
Pro tip: Learn how to understand your podcast analytics to sustain a successful show and craft a better pitch to brands.
Why podcast ads are so beneficial for both podcasters and advertisers
Podcast ads benefit both podcasters and advertisers alike. For podcasters, podcast ads can offer a source of income to help them fund their content creation and grow their audiences. [add another stat]
For advertisers, podcast ads provide an opportunity to target specific audiences with highly targeted messages. Podcast ads also allow for greater measurement capabilities than other ad platforms, helping advertisers optimize their campaigns and maximize ROI.
A word of caution to podcasters:
Make sure your advertisements are not too intrusive and that you make it a priority to keep them as relevant as possible for your listeners. If a podcast's content is constantly interrupted by long, drawn-out ad breaks, it will likely lead to high levels of listener fatigue and may drive away potential listeners. It is important to strike a balance between monetizing the podcast without compromising the listener experience.
Podcast ads offer a great way for podcasters to monetize their content and for advertisers to connect with their target audience and increase brand awareness.
By leveraging the latest technology and data-driven insights, podcasters and advertisers can create effective campaigns that deliver measurable results for both parties! Just make sure your podcast has all the foundations for success before adding monetization to the mix.
Learn more about the Podpage features that can help support your monetization efforts!