Podcasts are seeing a global uptick. Find out why and how you can take part in this trend.
(Updated September 2024)
Nowadays, it seems people listen to more than just music on their streaming apps or watch the daily news on television.
Podcast consumption (and its advertising) is seeing rapid growth, especially among Canadian audiences. In fact, the podcast advertising market in Canada is projected to reach revenue of $67.29 million USD in 2024.
Additionally, studies from Edison Research show that 78% of Canadians are familiar with podcasting, and 23% listen to podcasts every week. It’s not that they are playing it in the background while mindlessly doing other tasks. Podcast listeners are fully engaged, paying attention to the entirety of a podcast episode.
As a marketer, this information should be music to your ears. Why, you ask? Well, imagine having an audio ad for your brand plugged into a podcast to which listeners are fully engaged and paying attention. That’s a high value of brand awareness and recall.
Marketers see a lot of potential in this platform and – in turn – investing in podcast advertising. Here’s everything you need to know about this booming trend.
What is podcast advertising?
As the name suggests, podcast advertising is a type of paid marketing that takes place within a podcast episode. Specifically, it is a type of digital advertising where businesses promote their products, brands, or services through audio content distributed via podcasts.
The purpose of podcast ads is to offer a unique medium for brands to promote themselves to highly engaged and loyal podcast audiences. Because of the typical structure and episodic nature of podcasts, brands are given a distinct opportunity to advertise themselves in a more immersive, natural way.
There are three podcast advertising categories:
- Standard advertising agreement: the brand pays the podcast host (or podcast network) for ad space in their show. The ad itself can be pre-recorded or host-read, and it can be fixed or dynamic. Both parties will also agree on the ad’s placement within the audio content.
- Affiliate marketing: the podcaster decides to join the affiliate scheme and market the brand. They only get paid when and if their promotion results in sales or conversions. This is why you’ll often hear hosts give custom URLs or discount codes during their ad reads: to track these sales.
- Branded podcast: Companies themselves invest in creating their own branded podcast. It is a great way for them to connect with their customers and provide accurate and high-value content that relates to their brand.
Nowadays, podcasts are typically part of a podcast network. Podcast networks are a group of shows under one umbrella company. After joining, a podcast’s ad space is made available to advertisers for the profit of both the network and the podcaster.
In short, blocks of advertising space are reserved in podcasts but ads are served dynamically depending on targeting. In addition, ads in podcasts can have different placements:
- Pre-roll: typically plays at the start of the episode but can be moved up to 25% at the start of the episode by the podcaster (before the content)
- Mid-roll: ads are placed in any episode that is at least 10 minutes or more in length (during the episode)
- Post-roll: ads play at the end of podcast episodes but can be moved up to 50% from the end of the episode by the podcaster (after the content)
There are also certain cost models for podcast advertising. One is called CPM which stands for “cost per mille” (mille meaning thousand in Latin). It is essentially the price paid for every one thousand impressions or plays per episode. Pre-roll, mid-roll, and post-roll ads are usually priced according to this cost model.
Another cost model is the CPA which stands for “cost per acquisition”. Here, the ads are priced according to the number of conversions. Each time a listener converts due to the podcast ad, the business or sponsor pays out a predetermined fee. Affiliate marketing models usually follow this cost model.
Others use a flat rate model for their podcast advertising strategies. The brand and the podcast team will negotiate a contract for the price of advertising which can be affected and determined by various factors such as audience size, frequency, and more.
Tips on advertising in podcasts
Considering there are various podcast advertising categories, cost models, and ad placements, there is no one-size-fits-all process. However, there are various strategies brands take in advertising in podcasts. Here are some tips to ensure a successful podcast advertising campaign:
- Know your audience: It’s important to know who your target audience is and the podcasts they listen to. Creating and understanding your customer personas can help determine which podcasts to advertise in and what types of content they resonate with.
- Choose which ad model fits your brand and campaign the most: Decide which ad placement and category is the most appropriate for your campaign to ensure high audience engagement and impact.
- Select which podcasts and shows to advertise on: Do your research and see if there are any existing podcasts that are in line with your brand and its campaign. It’s important to have ads that are contextually relevant and appropriate for your audience. If there aren’t any existing podcasts, maybe it’s worth considering having your own branded podcast too.
- Curate your podcast ad: Write out a script to send to your podcaster or produce everything yourself and send over a final podcast ad recording. The types of podcast ad to use should also be considered. Keep in mind your advertising budget as well and take note of the cost models that come per advertising category.
- Assess and evaluate your podcast ad: After your podcast ads have gone live and you’ve set enough time to see results, observe the analytics and see where you need to improve or adjust your advertising.
Benefits of podcast ads
Those who invest in podcast marketing would find themselves having a higher audience engagement and return on investment. In fact, 41% of podcast listeners trust ads more if they hear them during a podcast. That’s because people tend to form a strong connection with their favorite podcasters and hosts. This connection creates a unique opportunity for brands to connect with audiences in an engaging media environment and foster trust among them.
In relation to audiences having a stronger connection to podcast hosts, the podcasts provide a higher degree of listener trust. Thus, giving brands an opportunity to leverage this and advertise themselves through media that the audiences trust. A US Podcast Advertising Revenue study conducted by IAB suggested listeners respond better to ads a podcast host reads than pre-produced ads, much like any type of endorsement. Consumers are more likely to respond to sincere and authentic conversations about a product compared to scripted copy.
Another benefit is the flexibility for brands to advertise. Because podcasts cover a wide variety of topics and subjects, you have plenty of options to advertise on shows that best fit your brand (for example, a pet grooming company promoting their services to an animal enthusiast podcast). In turn, you open your brand to the possibility of attracting and acquiring new customers that fit your target market.
Podcasts also offer extended reach and repetition, and therefore, a more sustainable form of advertising. When you pay for an ad on a podcast episode, it’s usually a one-time charge. However, you’re likely to get more for your money because podcast ads are on episodes permanently and will be heard by any listeners replaying those episodes or binging the series in the future.
Final thoughts
Podcast advertising offers many opportunities for marketers. In an industry that is continuously expanding, brands can take it up a notch by adding to their arsenal the value and benefits of advertising in podcasts. It’s a step in the right direction that’s full of possibilities and sustainable growth.
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