Podcast advertising revenue is forecasted to exceed 1 billion by next year (2021) and has seen double-digit growth over the last five years. It’s clear that marketers have quickly come to realize just how relevant and effective podcast advertising is for the growth of their business.
There are several reasons that podcasting has become such an attractive channel for marketers, no matter the size of their budget.
Podcasts might have once been a niche medium, but that is no longer the case. About 90 million Americans listen to podcasts each month and listening is only continuing to increase and become more and more mainstream. More importantly, podcasts have the ability to reach a niche and attractive demographics, which is why more and more brands are dedicating more of their budget to podcasts.
Listeners feel personally connected to their favorite podcast hosts, making them some of the most loyal and passionate consumers. When podcast ads are done well they don’t feel like an ad. They sound more like a recommendation from a trusted friend and that’s what makes them so effective. Listeners are also unlikely to manually skip over podcast ads since many people are listening to podcasts while doing something active – on their commute, while doing the dishes or working out.
Not only are people paying attention to podcast ads, many listeners actually like the ads they hear on podcasts and according to AdWeek, 75% of podcast listeners follow the calls to actions.
It’s clear that podcast advertising works! The great news is that you don’t have to be a household name brand or have a large budget to start advertising on podcasts. The key is to start small and scale up as your business grows.
4 steps to launch your first podcast campaign
Step 1: Learn the language of podcast advertising
If you are new to podcast advertising, it’s important to understand the different variables that determine the value of a podcast ad, including the ad format itself, as well as how and where the ad gets inserted into the episode (aka the ad position).
CPM Rate – Podcast ads are generally priced by a CPM rate or the cost per 1,000 listeners. For a host-read ad, the average CPM rate starts around $25 for a 60 second ad spot. Pre-recorded ads have much lower CPM rates that average just a few dollars.
Ad Formats
The two main types of podcast ad formats are Host-read Ads and Pre-recorded ads.
Host-Read Ads
Host-read ads are read by the podcast host (or producer) and are the most common and traditional way of advertising on podcasts. The way that host-read ads get inserted into podcasts has evolved and changed over the last few years. Instead of being “baked in” or directly edited into the episode, now almost all major publishers and networks dynamically insert their host-read ads into the episode.
Pre-Recorded Ads
Pre-recorded ads are similar to traditional radio ads. These ads are recorded and supplied by the advertiser and are dynamically inserted into the episode. They are also significantly less expensive than host-read ads with a typical CPM of $3 – $11.
Ad Positions
There are three different ad positions in a podcast: pre-roll, mid-roll, and post-roll. While the ad format determines the type of ad read and how the ad is inserted, the ad position determines where in the episode the ad will run.
Pre-roll (15 – 60 seconds)
Pre-roll ads run before the episode starts or within its first few minutes and can be anywhere from 30 – 60 seconds long. Depending on the placement, pre-rolls can sometimes be skipped over so they are typically priced slightly less than mid-roll ad spots. We often encourage publishers to place the pre-roll slightly after the introduction for better performance.
Mid-Roll (30 – 90 seconds)
Mid-roll ads run halfway through an episode and are usually a little longer and more in depth than a pre-roll or post-roll placement. Listeners are most engaged through the middle of an episode and make mid-rolls the most expensive and most effective ad placement.
Post-Roll (15 – 30 seconds)
Post-roll ads run within the last few minutes of the episode or directly after the end of the episode content. Post-roll placements are typically shorter in length and priced the lowest because listenership tends to decline slightly by the end of an episode.
Step 2: Find podcasts to partner with
Once you are comfortable with how podcast advertising works and understand the various industry terms, the next step is to find and partner with podcasts.
RedCircle’s Ad Marketplace makes it super easy to purchase ads from a diverse set of podcasts and allows you to launch a campaign within days, removing much of the manual process and back and forth communication with a middleman.
Speed and testing are a few key benefits of managing and executing your campaign with RedCircle. You can easily A/B test and optimize your campaigns, whether it’s through messaging, ad formats or show placement, in addition to testing the channel as a whole before scaling. It’s simple to manage your budget across one or many shows and get a campaign up and running within days.
Similar to creating a Facebook or Google ad, you can browse and select from thousands of podcasters and use RedCircle’s platform to build a custom host-read or pre-recorded ad campaign across multiple shows that fit your brand’s unique goals, timeline, and budget.
Step 3: Create a personalized campaign that fits your goals & budget
The next step in the process is planning out your campaign. As a marketer, your goal is to make the biggest impact with the budget you have to spend and the inventory that is available. While a podcast’s audience size is a factor when deciding what shows you want to advertise with, it’s not the only consideration. What’s more important is the content and finding shows with audience demographics that align with your current or target customers.
If you are new to podcast advertising or working with a smaller budget, don’t be afraid to think outside of the box. Shows that aren’t an obvious match with your product may still work well for customer acquisition. For example, if you’re advertising a business-related product, you shouldn’t just run ads on business podcasts, there are plenty of corporate decision makers listening to a sports or parenting podcast. It’s easy to run tests on different content categories with RedCircle so you can get a clear sense of what performs best for your brand.
Want to make your budget and reach go further? Don’t overlook shows that have a smaller audience.
When looking for shows to advertise on, Brooklinen told NYT that “they tend to make “efficient” plays for smaller, but more committed, audiences. ‘It doesn’t really matter what genre their podcast is in. Whatever they buy, their listeners will buy, for the most part.’”
Step 4: Measure your ROI, optimize, and repeat
Given the nature of podcast advertising, there aren’t the typical well-defined metrics that marketers have come to expect from other digital channels. The majority of podcast ads, whether host-read or pre-recorded are direct response campaigns, which means that promotion codes, surveys, and vanity URLs are the best way to track the performance of the overall campaign and individual shows.
While promotion codes and vanity URLS are the most direct way to track the effectiveness of your ad, you also have to make the assumption that some new customers come from the ad campaign indirectly. There’s several different tools and metrics you can use to get a fuller picture of your campaign performance, including:
Check-Out Survey
Not everyone will remember to use the podcaster’s unique promo code when they go to make a purchase. Including a quick survey question asking how the customer heard about your brand will improve the accuracy of your attribution.
Third-Party Tracking
There are a few third-party podcast attribution products, such as Podsights and Chartable. They essentially connect a podcast’s downloads to activity on your website to give both the advertiser and the podcaster additional insight into the effectiveness of a campaign.
Referral & Direct Traffic
Many podcasters include their sponsors and vanity links in their show notes so you can track whether you see an uptick of direct and referral traffic to your website using Google Analytics throughout the campaign.
Tracking podcast attribution is not a perfect science, so it’s important not to get caught up in the individual metrics and focus on the performance as a whole.
Once you’ve ran a few campaigns and experimented with different messaging, ad formats and podcast categories – it will become clear what is working and what isn’t. Like any other medium in marketing, testing and continuing to optimize your campaign based on the data is key to driving better performing campaigns.
Want to learn more about advertising with RedCircle? Sign up and we’ll get in touch!