Podcasts and ad spending are two concepts that go hand in hand for brands and podcasters alike. Any industry with a large community is a target industry for advertising, and podcasting is no exception. The listenership volumes of podcasts across the U.S.–and podcasts around the world–makes the podcast industry perfectly situated for ad spending.
This Mr. Thrive blog post is our place to take a look at the impact of podcasts and ad spending. Advertising in podcasts has been a rich market for years, since the podcast boom of the COVID-19 pandemic. Now’s the time to examine that market, and look into where it might be going.
Advertising In Podcasts
Advertising in podcasts has been a stream of revenue for podcast hosts and producers for as long as podcasts have been profitable and mainstream. Advertising and sponsorships are one of two major ways podcasts create revenue. The other main revenue source is through paid-access content. Advertising is the option podcasts tend to lean toward first and foremost.
When podcasts and ad spending come together, everyone involved in the process benefits. The podcaster benefits from ad revenue. The brands paying for ad space get the benefit of listeners hearing about their products from a trusted source. Listeners benefit by hearing about new products and services in an honest tone, from a source they rely on for clear information.
What are the Benefits of Advertising In Podcasts?
Podcasts and ad spending have a range of benefits for everyone involved. Since podcast hosts and producers have a say in which advertisements they put in their shows, podcast ads are genuine. The right products and services are reaching listeners who have already demonstrated an interest in the industry of the advertising companies.
These three key benefits of advertising in podcasts sum up why advertising works so well in the world of podcasts. When podcasts in the digital ecosystem mix with advertisements and brands related to those podcast topics, the results are good.
3. Tapping Into Podcast Markets
For brands looking to get their products or services in front of the right people, you can’t go wrong with the podcast market. Paying for ad space in podcast episodes gets your brand name in with podcast listeners, which makes up around 62% of the United States. That’s not a market to sleep on!
2. Passive Advertising Attention
One of the great things about podcast accessibility is that they are easy to listen to while you’re doing anything and everything. For advertisers, getting your brand into podcasts means you’ll have listeners becoming fans without having to vie for their attention. They’ll be listening comfortably, and hearing about your brand as part of the narrative.
1. Advertising In a Trust-Based Environment
When it comes to things listeners say about podcasts they love, the overarching theme is they trust and appreciate their favorite podcasts. When you advertise in podcasts, you become part of that trust-based environment. There’s no better situation for a brand than to have people you’re seeking out already trusting the source.
5 Facts of Podcast Advertising Revenue
The connection between podcasts and ad spending is brought together by the facts of podcast advertising revenue. The revenue stream of podcast ads is effective for podcasters, advertisers, and podcast sites with their name in the game. When ads are done right, they are a profit source for all three of those parties, and a helpful tool for listeners as well.
These five facts of podcast advertising revenue showcase a variety of pieces of the ad revenue puzzle. Some of these facts are about the root cause of revenue from ads. Some relate to the future of revenue projections. All together, these are the things you need to think about when it comes to podcasts and ad spending as a revenue stream.
5. Podcast Advertising Revenue Projections
Podcast advertising revenue projections have been studied by podcasters and statisticians since the podcast boom of 2020. In 2021, podcast ad revenue reached an impressive mark of over $1 billion. That revenue growth has slowed since then, but it’s still growing, albeit at a lesser rate. Keeping an eye on those rates of growth and acting accordingly is critical.
4. Connections to Listeners
When it comes to the relationship of podcasts and ad spending, for advertisers, one important factor is the connection to listeners. Getting your ads on a podcast is an immediate connection to listeners. The next step, which needs to be a consistent effort, is making ads that listeners will want to connect with while they listen.
3. Relationship Between Revenue and Episode Release Times
Another important factor to be aware of is the relationship between revenue levels and episode release times. Studies show that podcasts with ads releasing weekly or bi-weekly episodes have high ad revenue. That’s in contrast with podcasts putting out more frequent episodes with ads. While ads are good, too many of them, in too frequent episodes, tend to put off listeners.
2. Dynamic Ads VS Baked-In Ads
In terms of which format is the best for ads in podcasts, dynamic ads have proven to be a budding star over baked-in ads. In 2021, dynamic ads were the dominant type of ad in use by 84%, following a consistent decline in baked-in ads. When you’re buying ad space, remember to keep your ads friendly for a dynamic format.
1. Testing Advertisement Run Time
When it comes to run time for ads in podcasts, a short, quippy ad is predominantly the best choice. In recent years, a majority of ads have been running between 15 and 30 seconds. For brands, when you’re planning your ads, keep that time span in mind and keep your copy tight. Your goal is to draw in listeners with something brief and exciting.
The Future of Podcast Ad Spending
The future of podcast ad spending is something everyone in the podcast industry should be keeping a close eye on. In 2021, U.S. podcast ad revenue reached a milestone of being over $1 billion. That jump came as a 72% increase in revenue. In 2022, ad revenue increased by 26%, to reach $1.8 billion.
While that increase was far from bad, it didn’t hit the expected mark of over $2 billion in podcast ad revenue for 2022. It’s not surprising to see revenue slowing down. It happens across the board of industries that see booms in revenue. It is, however, something to keep track of in the podcast industry in the next few years.
Frequently Asked Questions About Podcast Ad Spending
The world of podcasts and ad spending can be confusing and if you work in podcasts, it’s important to understand. This Mr. Thrive Media post is here to provide a deeper understanding of podcasts and ad spending. Our answers to these frequently asked questions dive into questions around the web about advertising in podcasts, to give you more to learn about.
How Much Do Advertisers Spend On Podcasts?
The pricing of podcast ads ranges anywhere from $15 to $40 for a singular ad. Podcast ad pricing can be a fixed rate, or based on cost per mile (CPM). That is the cost per 1,000 listeners on average.
On average, a 30-second ad costs between $15 and $18 per CPM. The CPM of a 60-second ad is generally $25 to $30, but it can go up to $40 in some cases. Fixed rates for ads generally fall within that same price range for the same ad run time.
How Many Ads are In a 30-Minute Podcast?
On average, the recommended ad number in a 30-minute podcast rests around two or three ads. Anything more than that becomes a barrage for listeners, making them less likely to buy, and more likely to be bothered by the ads. A 60-minute podcast has a slightly higher limit of an average of four ads per episode. Overall, you don’t want to overload your episodes with ads.
How Successful Is Podcast Advertising?
Podcast advertising is quite successful because listeners tend to trust brands when they hear about them in their favorite podcasts. A March 2023 report from Sounds Profitable found that 68% of subjects in the report were more likely to buy a product from a podcast ad than ads in other mediums, including YouTube and social media.
Is a 15-Minute Podcast Too Short?
15 minutes for a podcast episode isn’t necessarily too short, but it can have an effect on the possibility of advertising. For some niche areas of podcasting, a 15-minute episode can be the perfect length.
From an advertising perspective, however, 15 minutes isn’t much to work with. For shorter podcast episodes, ads need to be quick, to the point, and designed to draw in listeners without detracting from the show.
Podcast Ad Spending: Put Your Money Where Your Podcast Is
Podcasts and ad spending are two sides of an industry that benefits podcasters, advertisers, and everyone in between. Whether you’re a podcaster looking to get your ads out into the industry or a brand or business owner searching for ad space, reach out to Mr. Thrive Media. We can connect you with the right people to get your message out there.