It’s anticipated that by 2023, podcast ad revenue will exceed $2 billion. What’s more, it’s expected to continue on the same trajectory to reach almost $3 billion in 2025. To put this into perspective, podcast statistics estimated that it was “only” $1.3 billion in 2021. So, there’s a lot of money to be made by means of podcast advertising.
If you’re a brand, you’ll be glad to know that it’s effective. According to statistics shared by SEMrush, nearly 20% of people are much more likely to consider supporting a brand if it’s advertised on their favorite podcast. What’s more, 60% of listeners revealed that they actually searched for a product after it was mentioned on a podcast.
Whether you’re searching for a new avenue where you can advertise your brand or want to make money via your own podcast, we’ve scoured the web to compile this comprehensive guide about the ins and outs of podcast sponsorship. From the different types of ads to average ad rates, here’s the most important information you need to get started.
A Full Guide to Podcast Sponsorship and Ad Rates:
What’s Podcast Sponsorship?
In short, podcast sponsorship refers to when a brand pays a podcast so that they can take advantage of the audience of the podcast in the hopes of winning new potential customers. To do this, they can use different types of ads.
For example, the ads can either be read by the actual host of the podcast using a script (some brands might prefer to offer only a list of points to be discussed leaving the host with more freedom) or it can be pre recorded and then simply added to the episode.
One of the main ways in which podcast advertising is different from other types of traditional advertising is that it’s very targeted. You’ll be surprised by the niche subjects that podcasts cover.
Also, most listeners are much more tuned in to what the host of their favorite podcast says than what the writers on their favorite blog write. All in all, there’s a greater level of trust and connection between a podcast host and the listeners making it a very effective marketing platform.
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Different Types of Podcast Ads
Before looking at the different types of podcast ads, you need to know that the majority of podcasts offer three slots for ads. Your ad can appear in the first 10% of the episode (known as a pre-roll ad), in the middle of the episode (known as a mid-roll ad), or towards the end of the episode (known as a post-roll ad).
Mid-roll ads are typically longer (they can be as long as 90 seconds), while pre-roll and post-roll ads are usually about only 30 seconds long. Also, post-roll ads are generally the least attractive as you run the risk that many listeners won’t listen to the very end. Then again, some argue that the most enthusiastic listeners will listen right till the end and they’re actually the ones whose attention you want to grab. Plus, as post-roll ads are generally slightly cheaper, it can end up being more cost-effective.
Ads can also be dynamic (also known as dynamic insertion ads) or baked-in. If it’s dynamic, the ad is separate from the original episode’s recording. This means that the ad’s placement can change from pre-roll to mid-roll to post-roll. Or, it can be dropped altogether at a later stage.
On the other hand, baked-in ads form part of the original episode’s recording. This means that they will be part of the show forever and can’t be replaced with a new promotion of a different brand.
From a podcast producer’s point of view, dynamic ads are more attractive as they give them more chances to take advantage of sponsorship. This means that it’s easier for them to earn ongoing ad revenue.
From a brand’s point of view, baked-in ads are better. Firstly, their ads will never be swapped out for another brand’s ad.
Secondly, it can be more authentic. The scripts are often read by the podcast host which means that there’s better continuity and the ad will feel more part of the podcast. It also feels more natural, and, depending on who the host is, you might be able to take advantage of their unique personality. All in all, if you want to increase the chances that your target audience will take you up on your offer, it’s best to opt for a host-read, baked-in ad.
Native ads are quite common and are created by the business for the podcast to discuss the product or share information about a promotion. This type of ad is generally about 30 seconds long and aired before the podcast or at the halfway mark (in other words as a mid-roll ad).
Product placement ads are pretty straightforward. In short, it’s when a brand pays a podcast to mention the brand during the episode. It’s usually done in a very unceremonious way.
Direct response ad
A direct response ad is a mixture between a native ad and product placement ad. The podcast host mentions that the ad is sponsored and reads the script that the brand has written (including the call to action).
When going this route, the brand will pay the podcast in exchange for creating content about a relevant topic. Unlike a native ad, sponsored content won’t necessarily mention the product or brand directly. Instead, the host of the podcast will mention which brand has sponsored that specific episode. The value of sponsored content is that it can help to boost brand recognition.
Instead of merely a quick mention or placement, this type of ad gives the brand much more airtime. When opting for a paid interview, the brand will pay the podcast to interview a person who’s linked with the brand (usually the interviewee will be some sort of expert).
It’s a win-win for everyone involved. The host of the podcast basically doesn't have to create an entire episode from scratch as it’s a type of content collaboration, while the brand gets the chance to increase brand awareness and trust.
Average Ad Rates
When it comes to podcast advertising, there are different ways that the pricing can be structured. Most commonly, it will be a fixed rate or calculated using the cost-per-mile (CPM) model.
If a podcast opts to charge a fixed price, they can include ad placements on other channels like social media and YouTube in addition to the podcast ad. Usually, the price of this package deal will correspond to the size of the audience.
If they opt for CPM, they’ll charge a fixed rate for every 1,000 listens of an episode.
There are a couple of factors that will impact an ad spot’s price. These include:
- Ad length
- Size of the podcast audience
- Timing (for example, an ad during so-called prime time will cost more).
Basically, the more listeners and subscribers a podcast has, the more they can charge for an advertisement.
AdvertiserCast released the following average rates based on the reporting data for nearly 3,000 podcasts. For a 30-second ad, the cost per mile (or cost per 1,000 listeners) is about $18. For a 60-second ad, the cost per mile is about $25.
So, if you’re looking to reach 10,000 listeners and you need one spot for a 30-second ad, you’re looking at about $180. For the same reach, but a longer ad of 60 seconds, the estimated cost according to their industry average is $250.
Podchaser’s average rates for ad spots are more or less the same as AdvertiserCast’s data. For a 25-second pre-roll ad spot, they reveal that you’ll pay about $15 CPM. A mid-roll ad that can be as long as 60 seconds will cost you double that, while a 25-second post-roll ad will work out the cheapest at about $10 CPM on average.
On the other hand, The Atlantic suggests that podcast ad rates can be as much as $40 per 1,000 listeners, while other online sources suggest that it can be as high as $50.
Podchaser also lists average ad costs for podcasts that generate a lot of listeners. According to their data, you can expect to pay anything from $1,000 to $3,000 to purchase an ad on a podcast that generates 100,000 listens.
To give you a further idea of what you can expect to pay/earn, here are some of the rates charged by specific podcasts as revealed by Ardor SEO:
- BiggerPockets, one of the top real estate podcasts in the United States, charges a minimum of $5,000 per podcast ad campaign.
- The Tech Guy charges a minimum rate of $25,000 for a broadcast quarter.
- Accidental Tech Podcast’s sponsorship rates start at $5,500. The show looks mainly at Apple and programming and boasts at least 75,000 downloads per episode on average.
- Mitch Russo’s Tribe Builders Podcast charges $1,500 per month. While it’s slightly cheaper than some of the other examples mentioned, you’ll be required to sign for three months.
- Mixergy, hosted by Andrew Warner, charges about $5,200 for three episodes.
- B2B Growth Show, one of the leading podcasts on marketing in the US, charges anything from $150 to $600 for ads.
Ultimately, the podcaster and business looking to place an ad will have to reach an agreement regarding the rate as there are no rates set in stone. Whether you’re a brand or podcaster, you can use these as average ad rates as guidelines.
Information For Brands Looking to Advertise on Podcasts
How do you buy podcast sponsorships?
If you’re interested in exploring podcast sponsorships, you can either manually shortlist a number of shows and reach out to them on your own or use the services of a company that links businesses with possible podcasts. If you pick the latter approach, you can, for example, try Midroll. It’s trusted by some of the leading brands like Dunkin’ Donuts, Toyota, Audible, and FedEx.
Writing podcast ads
Websites need content; podcast ads need scripts. It doesn’t matter which type of podcast ad you decide to run, you’ll need to list points that must be mentioned so that the ad remains relevant.
Just like other types of content, your intro will need to grab attention immediately. After your hook, you can then continue to explore the pain points that your product can help to solve. An effective way to do this is to let the host share a personal story, if applicable, about how they discovered your product and the results that they’ve enjoyed after using it.
The last element is the call to action. Podcast ads typically use special promo codes as calls to action. Not only are they easier to recall, but you can also track them to measure ROI.
Audience size vs. number of ads
It’s better to opt for a number of podcast ads on podcasts with a smaller audience reach than to air just a single ad on a podcast with a huge following. The reason for this is that it’s simply riskier to pay significantly more for one ad even though it will reach a much bigger audience. If your ad isn’t memorable enough, it doesn’t matter how many heard it. You basically lost that one shot that you had.
By opting for multiple ads with smaller podcasts, you also have the benefit of ditching the lower performing podcasts for others that have generated better results. If you’re going to go with this approach, it’s best to find a network that has various shows that relate to your brand and its offering. To make it easier to place the ad in a number of different podcasts, you might want to consider using a pre recorded ad that doesn’t mention the podcast specifically.
At the end of the day, it’s a case of quality over quantity. A bigger audience isn’t always better. Instead, it’s better to have more engaged listeners in your audience, something you’ll only get if you target podcasts relevant to your niche.
How long should your ads run?
Right Side Up, a growth marketing consultancy, recommends that you run your podcast ads for 7-10 weeks. So, if you don’t see results in the first week, don’t worry. Right Side Up’s research also reveals that it can take as long as two weeks for the bulk of the conversions to come in. As a matter of fact, it can take as long as five weeks for all its conversions to become completely realized.
Tips for using podcast sponsorships
Find podcasts connected to your niche
While podcast listeners are mostly from the same generational group, it’s still a good idea to focus on partnering with podcasts that are closely connected to your niche or brand. After all, it might throw listeners off when they’re listening to a podcast about the challenges of motherhood only to hear an ad for circular saws.
In short, by using a podcast that’s related to your industry, you’re more likely to find an audience who can identify with the issues that your products can solve. This is key. Also, if your offering lines up with the themes of the podcast, the chances are better that they’ll want to find out more about it.
Turn to your competitors
What are other companies in your niche doing regarding podcast advertising? Are there any opportunities that they’ve missed? On which podcasts do they advertise?
By looking at how your competitors are using podcasts, you can identify shows that you can contact or networks that deal with relevant topics. The idea isn’t to imitate exactly what they’re doing, but instead to create your own podcasting marketing campaign that’s better.
Find podcasts that have competitive separation
In short, competitive separation refers to the amount of time that separates competitive ads (ads of competing brands) from each other. The longer this time period is, the better. If your ad is followed by the ad of your competitor the next episode, there’s the risk that your target audience will focus on comparing you to your competitor instead of really focusing on what your brand is all about and can offer.
Consider the release dates
When was the most recent episode released? No more than a month should‘ve passed between two episodes, unless they’re taking a season break. If the podcast is released in seasons, it’s typically mentioned in the title or shownotes. However, ideally you’ll want to partner with a show that releases a new episode every week or every second week.
Screen the podcaster
Not only should you research what your competitors are doing, but also the podcasters that you consider using. A common metric that you can use to work out the popularity of a podcast is to look at how many times a podcast episode was downloaded. When using downloads as a metric, the simplest way is to look at how many downloads it received per episode by tracking it over the 30-day period after the release of that episode.
As not all podcasters are entirely honest about their numbers, it’s recommended that you try and verify the numbers. For example, if the podcaster uses a site such as Spotify, you’ll be able to access numbers provided by the platform. Also, if you use a network, you can look at their numbers and other shows to get a better idea of the type of engagement that you can expect.
You can also look at their engagement on social media. How many followers do they have? Do they regularly engage with them? Do their posts get a lot of likes?
Send a product sample
Depending on your brand, it can work in your favor if you send a product sample to the host of the podcast. This will help to create a more engaging and authentic ad.
Keep track of your results
Just like with email marketing, social media marketing, etc, you should remember to track your progress to work out the ROI. To do this, compare how much money an ad has helped to generate versus how much money you spent on that campaign.
This exercise is especially important if you run ads on different shows. Armed with better insight into how your ads are performing on the different shows, you might just find that it will make more financial sense to spend more on specific podcasts, while reducing your spend on others.
In addition to tracking unique promo codes that were shared during the podcast, you can also look at indirect attribution. If you received a significant increase in website visits or sales the week after your ad aired, it could potentially be linked to the ad.
Another way to determine if your ads were successful is to create a survey. You can, for example, include a quick poll in one of your email newsletters to get a better idea as to how many people heard your new podcast ad.
Information For Podcasts Looking to Get Sponsors
How do you attract sponsors for a podcast?
While there’s no set method for attracting sponsorships, there are a couple of proven strategies. Initially, you’ll find that you’ll need to put in more work to get sponsors, but as your podcast becomes more popular it will become less work and brands will start to reach out to you directly.
Define your niche
It’s best to define a niche and stick to it. Once you have clarity about your own niche, your goal should be to find brands from the same niche or that have similar interests.
Craft a proposal
What can you offer brands? How many downloads do you get on average? In addition to mentioning your niche, you’ll need to have accurate numbers at hand. If you have a business plan, you can also include a summary of it so that potential advertisers can get an overview of your show.
The fancy term for this is designing a media kit. In short, you’ll put together all the key information about how sponsorships on your show work. You can, for example, create it as a PDF file that you share upon request or interested businesses can download directly via your website. The following are examples of the type of information that you’ll share in your media kit:
- The needs and pain points of your audience
- Engagement and download statistics
- Slot availability
- Links to audio samples
- Reviews that your podcast has received
Alternative ways to monetize your podcast
In addition to podcast sponsorships, there are also two other options: affiliate marketing and selling merch.
With affiliate marketing, you’ll include a trackable link to your podcast description. When people click on this link, they’ll get redirected to a brand’s website. Depending on the terms of the contract, you can then get a percentage of what the person spends in exchange for sending them to the brand’s site.
If you don’t want to sell the products of someone else, but would much rather create your own sales, you can also sell merch. For example, on Patreon you can add merch to your different membership tiers. From T-shirts to stickers, there are many different items that you can brand and turn into your merch. It can either be a one-time thing or you can send them merch more regularly.
Speaking of Patreon, if you want to make money with your podcast, you can also simply ask directly for donations or offer subscription tiers. In fact, the top creator on Patreon at the time of writing this article is a podcast – True Crime Obsessed. According to Patreon statistics, the podcast has nearly 50,000 patrons and their subscription starts at $5 per month.
Wrapping Things Up
When podcasts entered the scene, people were quick to dismiss it. After all, how can a medium without any visuals manage to attract and maintain people’s attention in this day and age?
However, somehow podcasts managed to prove the pessimists wrong. Thanks to their increase in popularity, it presents a lucrative marketing opportunity for businesses and creators. If you’re a brand, running ads on podcasts can help you to grow brand awareness and increase sales. In fact, as podcasts are quite targeted it can be a great way to connect with a niche audience.
If you’re a podcaster looking to monetize your content, you can also benefit (and we’re not just referring to all the potential free product samples). Some podcasters charge as much as $5,000 per podcast ad campaign. Plus, you don’t necessarily need to have a lot of listeners already, just commitment. If you have a close connection with your listeners, brands will want to work with you. Though, just keep in mind that once you go down this path, you’ll need to stick to a schedule. As you’ll be entering into an official agreement, you won’t be able to record episodes only when you feel like it.
Frequently Asked Questions
Are podcasts popular?
People love podcasts and they’ve become increasingly popular in recent years. The number of active podcasts nearly doubled in the span of two years, while almost 60% of all US consumers older than 12 listen to podcasts, according to Statista. Thanks to its popularity, podcasts are excellent for advertising. About 20% of people are more likely to support a brand if it’s advertised on their favorite podcast, while more than half of listeners will actually search for a product after it was mentioned on a podcast.
How much do podcast ads cost?
The pricing of podcast ads can be structured in different ways. Most commonly, it will be a fixed rate or calculated using cost per mile (CPM). For a 30-second ad, the cost per mile (or cost per 1,000 listeners) is $15-18. For a 60-second ad, the cost per mile is $25-30, but it can be as much as $40. There are also a couple of factors that will impact an ad spot’s price. These include ad length, size of the podcast audience, niche, and timing.
Does audience size matter for podcast sponsorship?
When it comes to podcast sponsorship, it’s a case of quality over quantity. A bigger audience isn’t always better. Instead, it’s more important to have engaged listeners than simply reaching a big crowd. It’s also better to opt for a number of podcast ads on podcasts with a smaller audience reach than to run just one ad on a podcast with a big audience. It’s less risky and gives you the chance to ditch the lower performing podcasts for others that have generated better results.
What’s the difference between baked-in and dynamic ads?
Podcast ads can either be dynamic (also known as dynamic insertion ads) or baked-in. If it’s dynamic, the ad is separate from the original episode’s recording. In other words, the ad’s placement can change from pre-roll to mid-roll to post-roll. It can also be removed altogether at a later stage. Baked-in ads, on the other hand, form part of the original episode’s recording. This means that they will be part of the show forever and can’t be replaced or deleted altogether at a later stage.
How can you use podcasting to make money?
There are four main ways that you can use podcasting to make money. These are: podcast sponsorships, affiliate marketing, selling merch, and offering subscriptions. There are different types of paid ads that you can run on your podcast. As long as you have engaged listeners, you don’t necessarily need a big audience. If you don’t want to promote someone else’s products and prefer to create your own sales, you can also sell your own merch. Alternatively, you can simply offer subscription tiers or ask directly for donations.