Podcasts & Advertising — A Mutual Media Match
Over time and many episodes, podcasters and their audiences grow increasingly interconnected. This partnership is what makes podcast advertising so effective. Podcasters thrive on audience feedback and enthusiasm and, in turn, provide an in-your-ear audio experience that reflects this sincere, open dialogue.
When was the last time you wrote into a T.V. show with a special request, and BOOM, your wish was granted the next episode? In podcasting, this happens all the time — every day, worldwide.
Podcasters can react to and include audience requests in the next episode, creating trust and building community in a way other entertainment channels can’t.
The idea of podcast monetization via podcast ads has dramatically expanded, with ad networks and ad buyers now handling the bulk of the podcast advertising work. For podcast creators, podcast ads provide the opportunity to support their craft and even profit by partnering with brands that sell products and services their listeners find relevant.
For advertisers, podcast ads provide access to hard-to-find audiences and communities.
Libsyn focuses on taking creators from the basics of starting a podcast to the nuanced conversation of how to make money from podcast advertising.
5 Podcast Advertising Basics:
The Power of the Podcast Influencer
The podcaster plays a unique and esteemed role for their audience. They are listened to because they offer value — advice, experience, insight, humor, a personal story — that their monthly podcast listeners enjoy and come to trust. This trust comes from the fact that popular podcast hosts also tend to be good at listening to their audience. Podcast Advertising is tapping into that connection and the anxious ears of listeners waiting for the next episode to drop.
Hosts often interact with listeners in a personal way that builds intimacy, and even the consistent episodes (something to look forward to) provide a layer of reliability. Listeners care what their podcast hosts think and value their opinions.
So, if a podcast host recommends a product or service, that recommendation comes weighted with trust and history. It’s a game-changer.
Demand Sage Data, 2023:
- There are 464.7 million podcast listeners globally as of 2023. This number is predicted to reach 504.9 million by the end of 2024.
- The podcast industry market size is 23.56 billion in 2023.
- The United States has the most podcast listeners in the world. The U.S. is predicted to have more than 100 million active podcast listeners in 2023.
- One-third of the American Population listens to podcasts regularly.
- Smart speaker sales increased by 22% during the pandemic, and it is one the most popular channels to listen to audio content.
- 160 million U.S. citizens have listened to podcasts at least once.
- 78% of the U.S. population is aware of podcasts. Out of which, 28% listen to podcasts weekly.
- 160 million U.S. citizens have listened to podcasts at least once.
- Podcast listening is highest in the morning, and mostly on mobile phones.
Over time, many misconceptions about podcast advertising and its ability to reach and convert have emerged. In this article, Debunking 3 Podcast Myths, Dave Hanley, Chief Revenue Officer at Libsyn’s Advertisecast Marketplace, tackles these myths one-on-one.
3 Common Podcast Ad Myths
- Podcast advertising is just for direct response advertisers — For many more prominent brands with broader campaign objectives, there are new capabilities in podcasting that level the playing field with other digital media. Sure, podcasts are great for a direct response ad, but now they can also be dynamically timed to play seasonally and geographically — and change often.
- All podcast ads are created equal — Much like other media advertisements, this is untrue. Learn about the approaches and nuances that make a podcast ad successful.
- Smaller, independent podcasts are a risky investment — Not only NOT true, but niche podcasts with popular podcast hosts are often the best target audience if skillfully managed.
Today, podcast advertising presents an enormous opportunity to connect with incredibly hard-to-find market segments while offering great flexibility.
For creators, Libsyn’s AdvertiseCast marketplace provides opportunities to get started with podcast monetization upon reaching certain audience thresholds. Podcast ads are just one of those opportunities available to creators at every Libsyn plan level.
1) Podcast Ad Types Explained
Like any industry, podcast advertising has its vocabulary for categorizing, producing, running, and measuring advertisements. It is helpful to get to know podcast advertising terms as you begin to consider podcast advertising for your podcast. The information below will help you understand what podcast ad rates and formats are available AND help you assess if your podcast is ready for ads.
1. Host-Read Podcast Advertising
This is as simple as it sounds: YOU, the podcast host, record the audio advertising as part of your raw recording (baked-in advertising) OR as a separate audio recording inserted (via ad server technology) into your podcast at pre-determined ad slots (dynamic advertising). The primary benefit is that it is YOUR voice and sounds like a native ad. Podcast listeners tend not to skip over these as readily as audio from an unknown voice in your content.
The host-read ad is like a real friend recommending a product or service. This is especially true when the host uses the product or service themselves and provides a first-hand account of its usefulness within podcast advertising plays.
This ad format can be placed anywhere within traditional pre-, mid-, and post-roll ad slots, but is most favorably placed mid-roll. We talk about ad slots more below.
Note: host-read ads tend to perform better than all other forms of podcast advertising and are highly sought after, commanding a higher Cost Per Mille/Thousand (CPM).
✅ Advertiser and Creator Benefits
- The podcast ad sounds natural to your audience.
- The advertising can play throughout the content. Note that many advertising campaigns request mid-roll ad spots (within your content and not at the beginning or end of an episode).
- The ad can be recorded with your regular content (the ad is “baked-in” to the episode’s audio file) or as a separate audio clip to be dynamically inserted where appropriate.
Baked-in Podcast Advertising
Baked-in ads are any ads recorded or edited into the original mp3, wav file, or video of a podcast episode. These ads are typically host-read and recorded within the original podcast recording.
✅ Creator Benefits
- Some brands will pay a premium for this opportunity.
- The ads can be recorded within your regular content workflow.
- Some brands provide products to the creator to test or try before ad creation.
✅ Advertiser Benefits
- Ads are baked into your content for life — a permanent brand endorsement with longtail value, particularly within shows producing “evergreen” content that will continue to see listener traffic over time.
- The ad is natural sounding and flows within the content.
- The target audience, who perceives the brand’s endorsement as one that supports the creator they have come to love, forms a potentially deeper relationship with the brand.
⚠️ Creator Considerations
Baked-in ads live in your content … forever. Or at least unless you edit them out and replace the episode file. So, a year from now, the ad risks being outdated. For instance, say a True Crime podcast runs an ad for a clothing company offering 20% off inventory before the holiday season. Suppose a new listener discovers the show in June of the following year. In that case, they’ll likely listen to older episodes, at which point the deal and promo code promoted are no longer valid/available.
Also, if you and your advertiser ever break up, your old episodes won’t.
There is a lot to consider when recording a baked-in ad. If the relationship with the advertiser is more of a podcast sponsorship, you know it will endure the test of time and be more ever-green in its offer. This may be an ad format to consider, and your advertiser may be willing to pay a premium.
Dynamic Podcast Advertising
Dynamic, host-read ads are the solution to the cons of baked-in advertising. They can still be host-read and sound natural, or they can be a pre-recorded audio ad provided by the advertiser. In both cases, the placement is determined by ad markers you create via your ad platform or podcast host.
Platforms like Libsyn help you easily create ad markers in your podcast episode if you are enrolled in our automatic ads program or are working with AdvertiseCast. The ad can be placed in natural conversation breaks when creating content for your episodes. Libsyn will never automatically insert advertising into your podcast without your permission.
✅ Creator Benefits
- Monetize all podcast episodes — not just newly recorded content.
- Accept ads you did not personally record or create.
- Retain control over what brands can advertise in your content.
✅ Advertiser Benefits
- Ads can be host-read or pre-recorded.
- Conducive to time-sensitive campaigns & promotions.
- Geographic targeting is possible — optimizing ad spend and budgets.
- Frequency capping is also available, which allows a certain IP address to hear the ad a specific number of times over a specified period of time.
- Consecutive campaigns can be planned based on seasonal business needs — product launches or sales.
- Updated creative can be quickly deployed.
- Provides better measurement and reporting data options.
- Includes the ability to work with a variety of attribution partners.
⚠️ Creator Considerations
Download and/or impression requirements for podcasters to participate in these campaigns are higher and not ideal if you are a small show just learning how to start a podcast. Dynamic campaigns are tracked by “impressions,” which are always lower than the standard “download” metric used to track baked-in spots.
Many prominent national brands are looking for 10,000 to 15,000 minimum monthly U.S. downloads per show to invest. If you are just not there yet, keep reading, programmatic ads might be the right choice for your audience size.
Programmatic (or What We Call Automatic) Podcast Ads
Programmatic podcast ads are an automated buying and selling of podcast ad inventory that allows advertisers to reach specific audience segments often across multiple podcasts.
With programmatic podcast ad delivery, the creator can opt out of non-preferred ad categories and designate traditional ad slots of pre-, mid-, and post-roll. The advertising platform technology delivers the ad to the listener based on targeting criteria: geo-location, demographic, and ad categories selected.
Programmatic ads are usually pre-produced by an outside agency and typically not host-read. Ad buys are usually placed with ad marketplaces like Libsyn’s AdvertiseCast. Ads are then delivered to an aggregated group of podcasts that have audience demographics that align with the brand’s target market.
✅ Creator Benefits
- Lower download and audience size requirements to participate.
- Enrolling in Libsyn’s Automatic Ads requires a minimum of 2000 monthly U.S. downloads.
- Hands-free, passive monetization of current and back catalog.
- Ability to exclude IAB Ad categories that don’t align with your brand.
- No need to record or create new ads — just the podcast you love.
✅ Advertiser Benefits
- Can target the niche audiences of smaller podcast shows.
- Can provide ad creative to ensure ad and messaging consistency.
- Enjoy the same great opportunities as dynamic host-read ads:
- Deploy time-sensitive campaigns & promotions
- Geographic targeting is possible — optimizing ad spend and budgets
- Consecutive seasonal campaigns — product launches or sales
- Updated creative can be quickly deployed
- Better measurement and reporting data options
⚠️ Creator Considerations
- CPMs for programmatic ads are almost always lower than CPMs on host-read ads — in some cases, significantly lower. Many creators use both host-read ads — baked-in and dynamic — in conjunction with programmatic ads. If a podcaster’s ad inventory is not completely sold out with host-read opportunities, they can still supplement their income by accepting programmatic ads to help fill in the gaps.
- As a podcaster, you do not have the opportunity to approve the specific advertiser. Ads are grouped into specific IAB (International Advertising Bureau) categories. So, when you sign up for Programmatic Ads, like Libsyn Auto Ads, you can select which categories you would like to omit, but you do not choose specific advertisers or brands. This allows Libsyn to deliver ads to your podcast more efficiently, maximizing the earning potential and contributing to a higher fill rate.
Video Tip: IAB stands for Interactive Advertising Bureau and provides the industry standard in podcast stats measurement. IAB stats are what advertisers look for when selecting podcasts to buy, making their decisions based on the strength of these trusted numbers rather than just on “how many downloads” you have. All Libsyn Stats are IAB certified.
IAB categories are determined based on the IAB Content Taxonomy. The Content Taxonomy provides a “common language” that can be used when describing podcast content. This language is accepted across the industry to categorize podcasts, for contextual targeting, and for brand safety.
2) Podcast Advertising Placement
Regardless of the type of audio ads your podcast is running, they will play everywhere your podcast is distributed, including platforms like Apple Podcasts. Podcast ad networks insert the ads into your episodes and deliver them to the podcast listening app of your audience’s choice. One of your super fans might be listening to your podcast on Spotify and another on Apple Podcasts, but both will hear the same advertisements.
- These are ad spots placed BEFORE the episode runs OR within the first few minutes of the episode.
- You can have more than one.
- These ads are placed DURING the podcast episode’s run.
- Mid-roll ads represent the most sought-after ad position by advertisers and typically produce higher CPMs than pre- or post-roll.
- You can also have more than one Mid-roll ad.
- These are ads placed AFTER podcast episodes run.
- Again, you can have more than one, but we advise in the 1-2 range.
Libsyn podcasters who work with Libsyn’s AdvertiseCast Marketplace can allow AdvertiseCast to automatically place pre-and post-roll ads without the work of manually adding markers for each episode, but they can also place ad markers using Libsyn’s slot picker as seen below.
However, you want to avoid exploiting your listeners’ generosity. Be sure to consider how long your episode is before including multiple ads. Building and protecting your podcast audience experience is critical to maintaining your authority/popularity as a host when considering how many ads you want to include.
Recommended Number of Ads Per Episode for Episode Length
- <15 min. 1-2
- 15-45 min. 2-3
- 45-60 min. 4-5
- 60+ min. Depending on the length, use your judgment
3) Podcast Advertising Success Metrics
Success metrics for the advertiser or media buyer who is investing in podcast advertising can vary from one podcast ad campaign to the next and are impacted by the ad buy, advertiser, and ad type. However, there are common forms of measurement used to verify that podcast consumers are listening to the ads.
For brands, measurement is all ROI. If I invest in podcast advertising, will I see a bump in sales, will brand awareness increase, will codes be redeemed, will my ads run, and will podcast listeners take action? From the stats above, we know the answer is yes, and that success is verified with the tracking and measurement tools below.
Impressions, when referring to podcast ads, are the number of times a podcast audience member is presented with an advertisement in totality on a podcast episode. This term is only utilized in reference to dynamic or programmatic inserted audio ads — never baked-in.
Impressions offer a more precise view of how many people have heard an ad by considering variables like listener drop-off, skipped ads, etc. For example, your latest podcast episode was played 100 times. Inevitably, some of those listeners may choose to skip through the ads. The download metric cannot account for this scenario. Episode downloads measure interaction at the episode level, while impressions track interaction with the ad.
Attribution is the term used when referring to tracking the performance of an ad. There are two primary means of Attribution: Pixel tracking and Prefix Tracking. Both validate impressions.
Pixel tracking uses a piece of code in a dynamically inserted ad that can have a corresponding code on an advertiser’s website. When an audience member listens to an ad with pixel tracking, that counts as an impression. When they visit the advertiser’s website, that impression becomes a conversion.
Prefix tracking uses a code placed on the RSS feed called a Prefix that connects to an external tracking service, such as Podtrac.
Podcast downloads may still be the critical measurement metric in some ad buys, like baked-in ads or sponsorships. It is essential as a qualifying and measurement metric. Your podcast’s downloads help inform the ad networks and media buyers approximately how many monthly impressions you might have and indicate the popularity of your podcast.
4) Revenue from Podcast Ads
Despite some popular beliefs, a gigantic podcast sponsorship payout is uncommon. Large brands don’t frequently sponsor podcasts long-term as their internal ad budgets fluctuate. Budgets for purchasing podcast ads go up and down, so podcasters should also expect some fluctuation in ad revenue.
Think about how many commercials you see for seasonal products or services. Tax-related services do more advertising around tax season, so we expect them to have a larger ad budget around that same time. They may invest in a pre-recorded ad for their services and want to buy ad space in a personal finance-related podcast, but those same ad dollars won’t be spent mid-summer.
Your ad revenue may spike during a couple of months of the year and stay relatively flat during other months. Just like other businesses, your ad sales revenue will likely have some seasonality.
In addition to seasonality, things like ad format, fill rate, ad category, and ad placement also impact podcast advertising potential. Some even argue that broader, topic-based podcasts attract more ad revenue than nichecasts.
Video Tip: Wondering if you should focus on a Nichecast or a Broadcast to maximize podcast revenue?
CPM (Cost Per Thousand)
With Libsyn’s AdvertiseCast Marketplace, automatic podcast advertising revenue is based on CPM. In simpler terms, the CPM rate is how much podcast ads cost media buyers to purchase 1000 impressions of their ad in your podcast. It’s what the advertiser pays, not a straight translation of what you, the podcaster, are guaranteed to make.
Pricing of podcast ads simply comes down to the amount of downloads/impressions the podcast receives in the first 30 days and the CPM rate. What does CPM mean? CPM stands for Cost Per Mille (Latin for 1,000) or, in our case, the cost an advertiser pays per 1,000 downloads (listens) of your podcast.
Many platforms also have a minimum threshold to issue payment, typically around the $20-30 dollar range. If you can’t meet that threshold, getting only 1,000 downloads per month, it may be a few months before you make any money.
Want to estimate how much your podcast could earn? Check out this Podcast Advertising Revenue Calculator. While the calculator does not perfectly represent your earning potential, it’s a great way to show you what impacts that potential. It calculates possible earnings after entering all the information we have discussed (how many episodes you have, potential ad slots, current & back catalog). It also factors in the revenue share of the ad marketplace and the fill rate.
CPM Ad Rate Ranges per Podcast Ad Format
Generally, the more involved the podaster is in endorsing and creating the ad, the more the creator is paid. If an ad is baked-In, it lives forever in your content and that can also provide a boost in the CPM an advertiser may be willing to pay.
Ad Categories and CPM Rates
Podcast Ad Fill Rate
This term refers to the number of dynamic ad spots filled relative to the overall number available. For example, let’s assume your podcast places four dynamic ad markers per episode ( 1 pre-roll, two midroll, and one post-roll), and over the course of one month, you saw 20,000 unique downloads.
Hypothetically, that would indicate 80,000 possible opportunities to serve a dynamic ad. However, an ad must be delivered in 100% of those spots for you to get paid for all of them and that is not common. A 50 – 60% fill rate is pretty standard. Your fill rate is determined by the ad network you are working with, their ability to sell spots in your content, and your content’s ability to attract advertising.
Your fill rate can and will vary monthly based on various factors. That said, Libsyn always strives to bring you the highest possible fill rate, with the understanding that an ad served at a lower CPM is still better than no CPM at all (i.e., letting the ad slot go unused).
Ad Marketplace Revenue Share
Most every ad marketplace takes a cut of ad revenue. The revenue share is generally in the range of 30% to the ad network and 70% to the creator. These terms are sometimes negotiated for the most popular shows and even minimum guarantees are on the table for select creators.
The revenue share goes to funding the work to calculate the value of a podcast, manage campaigns, and attract advertisers. It also pays to support the tech that goes into the campaign setup, ad creation, management, reporting, and payment.
With all the work, No wonder so many podcasters choose to work with AdvertiseCast. It is a revenue share well spent and time saved when you consider what it would take to manage this personally.
5) Working with a Podcast Ad Marketplace
While you can seek out podcast sponsorship ad deals, advertising marketplaces like Libsyn’s AdvertiseCast were created to connect content creators and media buyers, streamlining and standardizing the process for everyone. Thousands of podcasters choose to work exclusively with AdvertiseCast for ad sales.
Libsyn’s AdvertiseCast Marketplace combines an industry-leading ad buying and management platform with full-service capabilities. They make it easy for podcast advertisers to initiate and manage highly targeted and measurable campaigns while providing maximum returns for creators.
In 2023, Libsyn expanded to Europe by acquiring Julep to provide more international podcast advertising revenue opportunities for the world’s favorite podcasts.
Some of The Podcasters Who Work with AdvertiseCast
Creators choose to work exclusively with advertising networks because they gain an experienced team that will manage campaigns, invoicing, and payment. The revenue share is a worthy trade for the hours saved staying out of the media buying process.
Not sure if you are ready to work with an Ad Network? Check out this Podcast Advertising FAQ for podcasters and this Podcast Advertising Glossary from AdvertiseCast to help you understand the process and terms you’ll encounter.
Not Quite Ready for Podcast Ads?
Podcast advertising is not for every podcaster. It is optional. However, podcast advertising could be the solution if you have invested a lot of time in your content and your audience and are looking for ways to cover the cost of these investments. Podcast subscriptions might be as well — or both!
Looking for other ways to leverage your knowledge, time, and resources? Check out this article on 10 Monetization Strategies. The perfect money making idea might be podcast merch or subscriptions.
The landscape of podcast advertising is ever-evolving, but Libsyn’s AdvertiseCast and Julep’s commitment to podcasters and advertisers continue to create new opportunities for both — the perfect match.