Why should you consider selling ad space on your show as a podcaster? What are the benefits of getting podcast sponsors? And as a business owner, is podcast advertising suitable for your brand? What is the ROI (return on investment)? What about the best practices to get the most out of podcast advertising?

Podcasting is destined for the stars! And we’re not just saying this because we have a vested interest in the industry. Statistics suggest that we’re witnessing the explosion of podcasting as a medium for brand building and storytelling.

According to The Infinite Dial 2022 by Edison Research, 62% of people in the U.S. listened to a podcast in 2022—up from 27% less than 10 years ago. The same report estimates that there are approximately 109 million monthly podcast listeners and 74 million weekly podcast listeners tuning in to an average of 8 podcasts per week.

But there’s more to the equation than the skyrocketing popularity of podcasting. With so many people listening to their favorite shows on a regular basis, there are more opportunities than ever for brands to harness the medium to get their messages in front of target audiences.

An Interactive Advertising Bureau (IAB) study prepared by PricewaterhouseCoopers (PwC) reports that podcast advertising is “one of the fastest growing channels in digital media.” Podcast ad revenue hit $1.45 billion in 2021—representing 72% annual growth compared to the total internet advertising market’s growth rate of 35%. The IAB/PwC report further forecasts that podcast ad revenue is poised to surpass 4 billion by 2024.

All this goes to show that podcast advertising is a venture worth exploring—whether you’re a brand trying to promote your product or a podcaster looking to monetize their show with podcast sponsorships. So, how do you tap into the lucrative industry?

This lesson of the “Podcasting Mastered” FREE course answers most of the questions that may come up in your quest to understand and implement podcast advertising. We break down why using podcasts for advertising might be a good idea, how an ad for podcasts works, a couple of podcast ad examples, podcast advertising rates, and everything in between.

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What is Podcast Advertising?

Podcast advertising is defined as the strategic insertion or selling of ads in podcasts. It is a potential avenue for brands to reach a growing, engaged audience of podcast listeners and an opportunity for podcasters to monetize their shows. An ad for podcasts typically contains promotional content about a product or service that aligns with a show’s target audience.

There are 3 general categories of podcast ads, including:

Standard ad for podcasts: This is a podcast sponsorship agreement where a marketer buys ad space in a show. The ad can be host-read or pre-produced, dynamic or baked-in, and it may be placed pre-roll, mid-roll, or post-roll. We will elaborate on these terms, how to get sponsors on a podcast, and the average podcast advertising rates later in this course lesson.
Branded podcast/Self-promotion: With this podcast advertising approach, a business creates a show to increase brand awareness, drive engagement, and boost sales of its products or services. It can also include the sale of merch or requests for donations through Patreon.
Affiliate marketing: In this podcast advertising structure, a podcaster pushes someone else’s products/services and earns a commission from every successful sale or conversion. There’s usually a trackable link that sends people to a brand’s website.

What are the Benefits of Using Podcasts for Advertising?

Podcast advertising is an effective way to cut through the clutter and reach a growing, highly engaged audience through a one-on-one conversation. Statistics show that podcast listeners have a receptive attitude towards ads in their favorite shows, and they tend to respond positively to calls to action. Therefore, podcast advertising offers maximum exposure to a hyper-engaged audience.

1. Broad and Targeted Reach.

The effectiveness of podcasts for advertising comes down to the nature of the medium and its growing reach.

It is estimated that 177 million people have listened to a podcast—and the number is poised to continue on an upward trajectory. This growing audience demographic is lucrative for marketers looking to get their message across. And in addition to the broad reach, podcasts are hyper-targeted.

Most shows are niched and designed to meet the needs of a target audience. This is a winning marketing formula that may translate to better ROI (Return on Investment)—with advertisers getting the opportunity to work with a podcast that shares a similar audience.

2. A Trustworthy, One-on-One Conversation.

Edison Research claims that the average podcast listener is a well-educated millennial with a high-paying job. This is an audience that likely pays little attention to traditional marketing channels, uses ad blockers to filter out the barrage of disruptive ads, and prefers quick, on-demand content. Podcast advertising is a great way to reach the “unreachable” but high-value audience in an intimate way.

Podcast consumers tend to form a deep, personal connection with their favorite podcast hosts. And with the majority of the consumption happening through headphones, it’s easy to see how this sense of closeness is established.

The one-on-one conversation between credible podcast hosts and their target audiences fosters trust, which can work to the advantage of advertisers or marketers. It’s an opportunity to cut through the clutter in a way that is not possible with other forms of digital ads.

Let’s take the example of a podcast host delivering a host-read ad for podcasts by weighing in with their personal experience of something like a VPN service. “I’ve used a couple of VPNs before, and XYZ VPN is by far the most reliable one yet. It’s faster and more secure than anything I’ve used before. This is now my go-to VPN—and you should give it a try.”

The above podcast advertisement comes off as more of a friendly recommendation than an ad pushed to the consumer. Unsurprisingly, 80% of podcast listeners are likely to act on the message from a host-read ad. And another 78% are okay with buying into podcast ads because they think of it as a way to support the show.

3. High Engagement.

Podcast listeners are a highly engaged lot—and this is great news for any marketing campaign!

As mentioned earlier, the 74 million U.S. weekly podcast listeners tune in to an average of 8 podcasts in a week. What’s equally impressive is that nearly 7 in 10 podcast listeners mostly listen to all episodes they download and sit through the entire episode when they do.

A highly engaged audience gives marketers multiple opportunities to leave a lasting impression. And according to a study by ComScore, people find podcast advertising to be the least intrusive form of digital ads. All this makes podcasting an effective and lucrative medium for advertising.

4. Podcasts Drive Awareness and Conversions.

The goal of most marketing campaigns is to increase brand awareness and hopefully drive conversion. And if this is the case, using podcasts for advertising is an excellent idea. Here’s why:

According to the Super Listeners Study 2021 by Edison Research, people are more willing to consider products/services after learning about them on a podcast—rather than in newspapers, radio, websites, and social media. In the same study, respondents claimed that hearing a podcast sponsorship or podcast ad on their favorite shows encouraged them to:

Visit a company or product’s website (74%)
Consider a new product/service (72%)
Gather more information about a product or company (69%)
Use a discount or promotional code mentioned in the show (59%)
Read a book (57%)
Recommend a product/service to others (56%)
Visit a location or store (54%)
Switch product/service brands (42%)

But it’s not just about piquing the interest of listeners. A study by Triton Digital suggests that 8 in 10 podcast listeners in India go on to purchase products they heard advertised on a podcast.

Convinced? Let’s dig deeper into who can use podcast ads, the different types that exist, the intricacies of podcast advertising rates, how to place ads on your podcast, and how to get sponsors to your podcast.

How Does an Ad for Podcasts Work?

Podcast advertising is a way to monetize the show. It works by getting sponsors and selling ad spots in your show. Other ways podcasters use advertising is through affiliate marketing, promoting own products/services, or requesting donations. Podcasters can even play both the ad seller and buyer through cross-promotion with other podcasts.

For brands/marketers, podcast advertising works by buying ad spots on a show that aligns with your target demographic and message. There is a lot to consider when sponsoring or buying ads on podcasts—including the ad placement/position, the type of ad, the cost model, and how to run an effective campaign.

Using podcasts for advertising is clearly a great opportunity for companies. But as a brand looking to tap into the rewarding world of podcast advertising, how do you make your entry? How do you best reach your target audience and maximize your ROI? Strap in as we walk you through the ins and outs of placing ads on podcasts.

Type of Podcast Ad Placements/Position.

An ad for podcasts can be placed in different slots depending on the impact you hope to achieve and your marketing budget. The most popular podcast advertising positions are:

1. Pre-Roll Ad.

This is an ad for podcasts that appears at the start of a show—usually before the main content. It may run for 15-30 seconds, depending on the podcast sponsorship agreement. It may sound something like,

“This episode of the [podcast name] is brought to you by [sponsor name followed a pitch of their offerings].”

2. Mid-Roll Ad.

As the name implies, a mid-roll ad pops up somewhere in the middle of a podcast episode. It is one of the most coveted ad positions by marketers since it’s the least skippable, meets the listeners when they’re highly engaged in the content, and can be up to 90 seconds long on average. As a result, mid-roll ads usually attract the highest podcast advertising rates.

Here’s an example: “Hi, everyone. We hope you’re enjoying our discussion today. We’d like to take a few seconds to thank our sponsors [sponsor’s name] for making this episode possible [marketing pitch].”

3. Post-Roll Ad.

Finally, we have post-roll ads as you conclude your podcast content. This type of ad for podcasts can be up to 30 seconds, often includes a CTA (call to action), and is typically the cheapest ad placement partly due to the risk of listeners being disengaged and the ease of hitting the close button.

A simple example of a post-roll could sound like: “Thank you for tuning in to another candid conversation on the [podcast name]. Today’s episode was brought to you by [sponsor’s name and pitch].”

Type of Podcast Ad Formats.

In addition to the placement of ads on podcasts, you also need to think about the type of ad that’s best for your brand and podcast. You generally have to pick between:

Pre-Produced Ads Vs. Host-Read Ads:

As you can already tell from the name, pre-produced ads are prepared and voiced by the sponsor in advance of the episode recording. They are similar to the native ads you find on traditional radio. The appeal of this type of ad for podcasts stems from the opportunity to polish promotion content to align perfectly with the advertised brand’s identity.

Due to the different voices and scripted nature of pre-produced or native ads, it’s advisable for the podcast host to prepare the listener with a gentle transition. This can be an intro track coupled with something like, “And now, a word from our sponsors [pre-recorded ad].”

The other type is a host-read ad. Basically, this involves a podcast host reading an affiliate ad or podcast sponsorship message. This type of ad usually feels natural—hence, it’s easier for listeners to buy into the promoted product or service.

There are different ways of delivering host-read ads, including:

1. Direct Response Ad:

Unlike the pre-recorded/native ad, direct response podcast advertising involves a host reading a short script followed by a CTA such as a link to use a coupon code. This is a strategy commonly used on Dax Shepard’s podcast, The Armchair Expert.

2. Product Placement:

This is similar to sports interviews where you see a bottle of Coca-Cola placed on a table in front of an athlete. Suppose the ad is running on a video podcast. In that case, you can use visual cues to imply the host approves of the promotional product. But if it’s only audio, the podcasters can casually mention the product in their discussion.

3. Sponsored Content:

With sponsored content, a podcaster discusses a topic that is related to a marketers/advertiser’s industry. The idea is that if the content is interesting, valuable, and engaging enough, the listeners may easily recall your brand in association with the episode.

4. Paid Interview:

Paid interviews are an interesting way to spread brand awareness and build trust with the target audience. The interviewee is typically an expert in their industry who pays to feature on a podcast episode. For example, if a podcast regularly discusses digital marketing, a representative from HubSpot can feature as a guest. During the conversation, they offer valuable information to listeners while subtly showing their expertise and promoting their brand.

Delivery Mechanism – Baked-In Vs. Dynamic Ad Insertion.

1. Baked-in ads are…well, baked into the podcast. Such an ad lives within the show’s core audio file. It is part of the recording and cannot be easily moved in the future. Since baked-in ads are usually host-read, they carry a sense of authenticity from the host’s unique personality.

The issue with baked-in ads is that they might lose relevance with time and may not appeal to all listeners. And this is where dynamic ad insertion (DAI) podcast advertising swoops in.

2. Dynamic ads are ‘adaptive’ as they can change over time and in accordance with the listener’s location (through geo-tagging). You simply mark spots where you’d like ads on podcasts to go, and promotional content continually refreshes without affecting the original audio.

DAI works in a similar way to how Google adapts ads to your online activity. This keeps the podcast ad content evergreen and relevant—meaning better outcomes. But you’ll have to compromise on authenticity and a ‘natural feel’ since DAIs are pre-recorded.

Emerging statistics show a growing appeal toward dynamic ad insertion at the expense of baked-in ads. According to the IAB/PwC report, revenue from dynamically-inserted ads nearly doubled from 48% in 2019 to 84% in 2021. In contrast, baked-in ads saw a drop in their share of ad revenue from 52% to 16% within the same period.

How Much Do Podcast Ads Cost? – Types of Cost Models.

Podcast advertising rates depend on the cost model applied. Common cost models include ‘cost per mile’ (CPM), ‘cost per acquisition’ (CPA), and a flat rate. Most podcast advertising rates are based on the CPM model, which is mostly the cost per 1,000 impressions. The average podcast advertising rate is $18 for a 30-second ad and $25 for a 60-second ad slot per 1000 listeners.

Please note that this pricing structure is not a one-size-fits-all formula. It is merely an average costing that may or may not apply to you. The actual rates may vary based on a number of factors, such as the podcasting niche, ad length, number of ad spots, and timing.

While you may find some podcast advertising deals using the flat rate cost model and the ‘cost per acquisition’ model (i.e., mostly affiliate marketing), ‘cost per mile’ is widely regarded as the industry standard.

Figures by AdvertiseCast suggest that the average podcast advertising rates differ based on the number of listeners (and impressions) a show attracts per episode. For example, the podcast advertising network reports that between January 2020 and August 2022, podcasts with audiences ranging from 1,000 to 10,000 listeners per episode charged a CPM rate between $23.71 and $28.43 for 60-second ads.

So, how much is a podcast ad worth?

Most people buy pre-roll and mid-roll ad spots. And based on industry average rates and practices, the 30-second ad ($18) is allocated to the pre-roll, with the 60-second ad ($25) slotting in at a mid-roll ad. Using a CPM costing model, this translates to $43 ($18 + $25) per 1,000 impressions. Running such an ad campaign on a podcast that attracts 10,000 downloads per episode would be worth $430.

Please remember that these podcast advertising rates by AdvertiseCast are broad averages — and the actual rate may be significantly different depending on the specifics of the show and ad.

How to Get Sponsors on A Podcast (*For Podcasters)?

Podcast sponsorship is an effective monetization strategy for podcasters. But selling ad space and getting podcast sponsors is not always straightforward. It can be difficult if you don’t know where to find brands or potential sponsors. You can get sponsors on a podcast by joining a podcast advertising network, using a podcast ad marketplace, pitching to brands directly, and joining an affiliate scheme.

Looking to earn some ad revenue? If you’re a podcaster interested in bagging a couple of advertising bucks, here’s more detail on the four ways of reaching interested brands for podcast sponsorship opportunities:

1. Getting Podcast Sponsors Through Podcast Advertising Networks.

One of the easiest and probably the most popular way to sell ad space on your podcast is by joining a podcast advertising network. There are a few requirements before you’re accepted into a network. But when you manage to join one, the networks do most of the heavy lifting for you.

Podcast networks usually handle negotiations with podcast sponsors and even connect you with suitable brands. This method of selling ads on podcasts may work for any content creator, but it’s most effective for podcasters with around 5,000 downloads per episode or more.

The main drawback of getting podcast sponsors through this method is that the podcast advertising network typically demands a share of your ad revenue, and you have to forego some control over the ads that appear on your show.

If landing podcast sponsorships through this method sounds feasible to you, here are some of the best podcast advertising networks to work with:

2. Getting Podcast Sponsors by Approaching Brands Directly.

Not willing to split your earnings with a podcast advertising network? Then go solo and pitch directly to brands. Getting podcast sponsors through this route demands more effort from the podcasters. But the perks of a successful pitch can be juicy.

Directly approaching brands gives you complete control over the podcast sponsorship, and you get to pocket all the proceeds from the ads. Just make sure you have the time, the know-how, and the negotiation skills needed to get a good deal.

3. Getting Podcast Sponsors Through a Podcast Ad Marketplace.

While podcast advertising networks connect podcasts with businesses looking to buy ad space, a podcast network creates a platform for that to happen organically.

A podcast ad marketplace is a meeting place where buyers and sellers come to interact and negotiate deals. It’s like a hybrid of the previous two approaches of getting podcast sponsors – i.e., podcast advertising networks and pitching to brands directly. And as a result, you get the perks and drawbacks of both.

For Example: You get a level of control over the podcast sponsorship, but in most cases, you’ll have to give up a share of your ad revenue to the marketplace (but not as high as with podcast advertising networks).

Some popular podcast advertising marketplaces you may want to consider include:

4. Joining an Affiliate Scheme.

Consider affiliate marketing if getting podcast sponsorship via the earlier methods discussed sounds intimidating or demanding.

Like any other affiliate marketing scheme, you apply as an affiliate and get a unique link. Instead of getting paid per 1,000 impressions (as is the case with the CPM model), you earn from every successful sale that goes through your link – i.e., ‘cost per acquisition’ (CPA).

Joining an affiliate scheme and promoting affiliate products on your show is one of the easiest and quickest ways of landing podcast sponsorship. You also get a level of control over how and when you push the ads on your podcast.

Interested? Here are some of the best affiliate programs for podcasters:

How to Buy Ad Space (As a Brand)?

If you’re a brand looking to place ads on podcasts, there are a couple of ways to go about it. The most common ways to buy ad space in a podcast include:

1. Working with a Podcast Advertising Networks:

If you’re looking to run a big podcast advertising campaign, consider partnering with an ad network. They save you the legwork of finding and negotiating with different podcasts. It’s also an excellent opportunity to leverage dynamic ad insertion (DAI) for improved outcomes.

But keep in mind that this convenience comes at an extra cost. Some top podcast advertising networks include AdvertiseCast, Midroll (Now part of SXM Media), Podcast One, Megaphone, and Authentic Experience.

2. Joining Podcast Advertising Marketplaces:

Another way to buy ads on podcasts is by joining podcast ad marketplaces like Podcorn, Gumball, Buzzsprout Affiliate Marketplace, Anchor Sponsorships, and Podbean Ads Marketplace.
This gives you an opportunity to sift through thousands of podcasts in search of one that aligns with your target audience and marketing goals.

3. Approaching the Podcasts Directly:

With this method, you basically find a podcast that fits your criteria, offer a podcast sponsorship deal, and run your podcast advertising campaign.

It may be labor-intensive, but it gives you control over the process—from podcast advertising rates to tweaking the ads as needed. Most brands that go this route run host-read ads.

4. Setting Up an Affiliate Scheme:

Not a risk taker? Try promoting your brand on podcasts by setting up an affiliate program. You only pay when a podcast gets you actual results.

Best Practices for Running an Ad for Podcasts (As a Podcaster).

As a podcaster looking to monetize their podcast, you obviously want to score the best deals and maximize the revenue you rake in from ads without adversely affecting your listener base. And that’s great.

But you have to realize that getting podcast sponsors and selling ad spots is not as simple as joining a podcast advertising network and waiting for the money to trickle in. There are some best practices to follow when setting up podcast sponsorships and running ads on your podcast.

Ensure you have a solid understanding of your show before getting podcast sponsors. Make a point of accurately defining your audience’s demographics, your podcast advertising rate, and the types of ads you’re willing to run on your show. You can create a media kit highlighting these details for a quality pitch.
Before you recommend a product or service to your listeners, try it out first. Don’t blindly recite the promotional message passed on by the podcast sponsor. Take the time to understand how it works and how it might be helpful to your audience. Your listeners are likely informed consumers who can smell an insincere ad a mile away.
Run podcast sponsorships for credible brands related to your niche.
For example, you don’t want to promote a payday loan company on an education podcast. This would be inappropriate, disruptive to the show, and will likely be frowned upon by your listeners.
An ad for podcasts should not run for too long, especially if it’s a pre-roll ad. You risk losing listeners even before delivering your content. The same applies to having more than 2 ads in a row. Always have your listeners’ experience in mind when running ads on podcasts. They’re there for the content. Not the ads. As a good rule of thumb, your ad time should be below 10% of your episode length.
Transition gently from the content to the ad. Don’t cut off conversations abruptly. Wait for a speaker to finish a full thought and insert a short interlude or sound when transitioning to the ad.
Think beyond podcast sponsorships and explore a consistent, wide-reaching marketing strategy. This may include setting up a strong podcast social media marketing campaign, advertising on your podcast website (you should have one), or adding ad content to your podcast show notes.

How to Run Effective Podcast Advertising Campaigns (As a Brand)?

Now to the companies or even podcasters looking to promote their brands through podcast advertising. Your main goal is likely to achieve a respectable ROI from your marketing efforts. Here are some guidelines to help you run a successful ad campaign:

Do the research. Before investing in podcast advertising, you need to understand how it all works and what you’re working with. What are the different types of podcast ads? Who is your target audience? What type of promotional message would be most compelling, and in which format?
Set an investment amount or marketing budget to guide your campaign. This means estimating the expected podcast advertising rates and the ROI you expect from your campaign. If you’re running podcast ads using the CPM cost model, AdvertiseCast has a neat calculator that you can use.
Find podcasts that align with your goals. Take your time looking for shows that are a good fit. Think about your target audience and the podcast’s listener base, the number of impressions they get, the consistency of the podcaster, and their podcast advertising rates. Remember that this may not be possible when working with a podcast advertising network since they often do the matching on your behalf.
Send a product sample or allow the host to demo a service before publishing a podcast ad. Giving podcasters a first-hand experience of the product/service creates the atmosphere for a more authentic and engaging promotion. By allowing the host to have a personal experience with the promoted product, a host-read ad with likely feel more organic—which may lead to better results.
Test the performance of an ad for podcasts. Collecting podcast ad analytics is a crucial step in any marketing campaign. It allows you to determine what is working and what is not.
One strategy you can use to track the effectiveness of podcast ads is podcast-specific promo/discount codes to see the ads that resulted in a conversion. You can also send listeners to a landing page designed for podcast leads—and track the traffic from there. Consider using third-party tools like Podsights or Chartable for detailed demographical and behavioral data.
Be patient, and don’t expect immediate results. More than 1 in 2 podcast listeners listen to episodes at a later date.

Podcast Ads Examples:

Need some inspiration on how to use podcast ads for maximum results?

Have a listen at some podcast ad examples that got it right from the following links. The samples cover different ad placements and several types of podcast ads:

Final Thoughts

Podcast advertising is quickly proving to be more than a niche marketing avenue explored by a few curious companies. Market data shows that ads on podcasts can be an effective way for brands to reach and engage with their target audience. The nature of the medium gives companies an avenue to connect with potential customers deeply and intimately. But as with any digital marketing strategy, brands need to adopt the best practices for best results.

On the podcasters’ side, the growth of podcast advertising is a lucrative opportunity to monetize their show. While earning ad revenue should not be your podcast’s goal, it doesn’t hurt—as long you prioritize the listeners’ experience.

We hope that this lesson of the “Podcasting Mastered” course answered most questions you may have as a brand or podcaster looking to buy or sell podcast ads.

And if you have any questions or need help inserting podcast ads in a manner that is seamless and not distracting to your podcast listeners, feel free to give us a call.

Don’t know where to begin? Get started with our free B2B Podcasting course.

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