How to Harness the Power of Podcast Advertising

A decade ago, the phrase “You’ve got to check out this new podcast!” would have befuddled most people. But today? It’s almost as common as hearing “Can I get a side of ranch with that?” at a pizza joint in the Midwest. It’s no secret that the podcast industry is booming, with more and more people tuning in to an unending variety of shows. There’s a podcast for almost every niche interest you can think of—including, but not limited to, pens, video game music, and Denzel Washington.

In a society where multitasking is the norm, podcasts offer a blend of information, entertainment, and advertising that weaves seamlessly into people’s daily routines. For marketers, this presents a distinct opportunity to connect with audiences when and where they’re engaged, and in contextually relevant environments, to boot.

That said, podcast advertising is a new(er) and ever-evolving space, and many marketers likely have some questions, such as: “Should I consider podcast advertising?” “If so, how can I get started?” “How much do podcast ads cost?” And, of course, “How can I place my ads on that podcast dedicated to pens?!”

We’re here to help: Read on to get the lowdown on everything advertisers need to know to harness the power of podcast advertising.

What’s Happening in the Podcast Landscape Today?  

Before we dive into the nitty gritty of podcast advertising, let’s take a quick look at where the podcast space stands today. Here’s what marketing teams should know:

• Podcasts are gaining listeners faster than digital audio in general, with the total US podcast audience forecast to surpass 150 million by 2027.
• Podcasts are great at driving action: 61% of Gen Z podcast listeners have visited a company’s or product’s website after hearing a podcast ad, 43% have purchased a product or service, and 42% have recommended a product to a friend or family member. 
• Though more prevalent among younger generations like Gen Z and millennials, podcast listenership is popular across all generations: In 2023, 43.3 million millennials, 35.4 million Gen Zers, 27.7 million Gen Xers, and 17.5 million baby boomers will tune in.
• US podcast ad spending is forecast to increase by 15.7% in 2023.
• Though programmatic podcast ad spend makes up a relatively small piece of overall spend, investment in the channel is growing rapidly: In 2022, programmatic podcast ad spending increased by 78.8% YoY, and it’s projected to grow an additional 41.3% this year.

Considering this popularity among listeners and the increased interest from advertisers, it’s no wonder more and more brands are incorporating podcasts into their omnichannel strategies!

Sounds Like a Big Opportunity! So, How Do I Advertise on Podcasts?  

To advertise on podcasts, marketing teams first need to consider their target audience(s). Knowing your audience’s preferences, interests, motivations, and behaviors will help you select podcasts that align with your brand and message.

Once you’ve determined who you’re trying to reach, it’s important to get clear on your campaign goals and to align those goals with KPIs to measure progress. For podcast advertising, some of the most common KPIs include:

• Impressions: The number of times a podcast ad is played.
• Reach: The number of people exposed to an ad at least once during a specified period.
• Frequency: The number of times people are exposed to an ad.
• Listen-through rate (LTR)/audio completion rate: The percentage of podcast ads that are listened to in their entirety.
• Click-through rate (CTR): The number of clicks a companion ad receives divided by the number of times the audio ad was played.

Next, it’s important to consider how you’re going to tap into podcast inventory. You can either purchase podcast inventory directly from a publisher (i.e., as a direct buy) or purchase it programmatically. Which purchase method you choose depends on your campaign goals, as well as the type of podcast ad(s) you’re running. Bonus: A good DSP will allow you to track podcast campaigns alongside all your other digital advertising channels, so you can understand the impact of your podcast ads within the context of your omnichannel efforts.

Cool! How Much Are Podcast Ads?

“This all sounds great,” many advertisers might say. “But how much do podcast ads cost?”

Generally speaking, the average cost per mille (aka CPM, or cost per 1,000 listeners) of a 30-second podcast ad is around $18, and a 60-second ad averages $25. That said, podcast ads can vary significantly in cost, depending on factors including the length of the ad, the type of ad, and listenership of the show.

What Types of Podcast Ads Are Available?

There are many different types of podcast ads available—and selecting the best ones to utilize depends largely on your individual audience, campaign, and goals. Check out some of the most popular types of podcast ads below:

• Host-Read Ads: Probably the most recognizable form of podcast advertising, these are the ads in which the podcast host personally endorses or discusses a brand’s product or service. Due to the personal nature of podcasts and the relationships listeners develop with hosts, these ads often feel more genuine and trustworthy.
• Sponsorships: Brands can become sponsors of entire podcasts and/or networks, and sponsorships often involve the brand's name being mentioned in the show's opening or closing credits, signaling ongoing support. Sponsorships can include host-read ads as well as other promotional elements.
• Pre-Recorded Ads: Pre-recorded ads are scripted commercials produced by advertisers. They are seamlessly inserted into podcast episodes (often via programmatic technology) during breaks in the program (i.e., pre-roll, mid-roll, or post-roll).
• Product Placements: Product placements involve integrating the sponsor's product or service naturally into the podcast's content—for example, a host might mention what beverage they’re drinking or what shoes they’re wearing. This is a subtle but effective way to showcase a brand without disrupting the listener's experience.
• Dynamic Ad Insertion (DAI): This tech allows advertisers to insert or swap ads into podcast episodes dynamically, rather than being fixed as part of an episode. For instance, a brand might create different versions of an ad for different geographic locations, and use geotargeting and DAI to ensure that audiences in specific places receive podcast ads tailored for them.

Considering the Right Podcast for Your Ads

In addition to deciding which type of ad to use, it’s important to consider which podcast (or podcasts) are the right fit for your campaign. And when it comes to finding the right podcast, the best place to start is getting clear on who you’re trying to reach.

Once you’ve determined your target audience, you can hone in on which podcasts/podcast networks will best reach them. Contextual targeting is a particularly effective opportunity here: Because there are shows for basically any given topic, brands can find those that align with their product or service and then speak directly to engaged audiences who have a high likelihood of being interested in their offerings. For instance, a financial services brand might place ads in podcasts focused on personal finance, and a home goods brand might place ads in podcasts focused on interior design. Even more, contextual is privacy-friendly way to reach the right consumers.

In addition to contextual targeting, advertising teams might choose to dig into show demographics to determine where they can best reach their audience: For example, an auto brand wanting to reach Gen Xers might focus on certain news podcasts that are particularly popular with that generation.

Should I Advertise Across Multiple Podcasts?   

A question that often arises when it comes to podcast advertising is whether to spread your ad budget across multiple podcasts or concentrate it on a single show. Though there’s no hard and fast rule, there are many benefits to diversifying your podcast ad placements, including:

• Increased reach,
• The opportunity to connect with diverse audiences, and
• The ability to test and optimize based on which shows/networks perform best.

Plus, since weekly listeners average nine podcast episodes per week, advertising on multiple podcasts can help teams connect with more listeners—and/or to connect with audiences at multiple touchpoints along their customer journey. By strategically advertising on multiple podcasts, marketing teams can reach audiences in contextually relevant environments that drive action and engagement.

Next Steps: Making the Most of the Podcast Advertising Opportunity

Podcast advertising is an effective way to connect with audiences during their everyday routines. Whether during their morning commute, a mid-day walk, their daily workout, or while they’re cooking dinner, people tune into podcasts at many different times and in a variety of contexts. And, with a wide range of podcasts available—spanning topics like wellness, sports, true crime, health and fitness, news, politics, and more—advertisers can use the power of context to reach target audiences in a privacy-friendly way that fosters serious engagement.

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Interested in learning more about how podcast advertising fits within a holistic digital audio advertising strategy? Check out our guide, The Digital Audio Advertising Guide: A Channel That Can’t Be Beat. In it, we analyze the latest trends, insights, and research to help advertisers make the most of their digital audio ad spending.