The bCast Blog

Let's welcome our guest writer Owen Baker!

With marketers' obsession over social media marketing, we should look for unique channels to market our brand. One such marketing channel is podcasts.

For the past five years, social media marketing reached over $200 billion in the US alone. However, in that same timeframe, podcast advertising revenue only reached a little over $5 billion in the US. That's 40x less than social media marketing.

Why Should You Do Podcast Advertising?

Despite its massively lower marketing volume share, podcast advertising tends to have higher conversion rates than social media marketing. In Q2 of 2021, the industry average for podcast advertising had a conversion rate of 1.58%. This conversion rate is higher than the CTR for Facebook (1.11%), TikTok (0.97%), Twitter (0.86%), and Google Display (0.47%), according to Marketing Charts.

That high CTR could be due to the different consumer behaviors of podcast listeners from social media users. Podcast listeners are on the platform to consume long-form audio content that meets their lifestyle and interests, resulting in a higher conversion rate.

With that said, here are some key things to consider when venturing into advertising on podcasts.

1. Understand Podcast Ad Pricing

Podcast ad pricing depends on two factors -- 1) the length of your ad and 2) the cost per thousand listeners (CPM) the network charges. Here are the rates for podcast advertising for the past 24 months:

The industry average CPM for a 30-second ad is $18. If a podcast network has 10,000 listeners per podcast, you can expect to shell out $180 for that 30-second spot. On the other hand, the average CPM for a 60-second ad is $25, working out to $250 for a one-minute ad in a podcast with 10,000 listeners.

There are over 2 million podcasts and over 64 million episodes as of 2022. You can either use the Spotify Ad Studio to create dynamic ads or go to podcast ad spot marketplaces such as Advertise cast to reach out to networks where you can buy baked-in host-read ads. More on the types of podcast ads later.

2. Find Relevant Podcasts

You have to place your podcast ad in podcasts that your customers will likely watch. You can place your ad in health and lifestyle podcasts if you're selling vitamin supplements, whey powder, or similar products.

However, you don’t have to confine yourself to podcasts in your niche. If you’re a wellness company with a humorous ad, you can place your ad on a comedy or entertainment podcast.

Ritual, a protein supplement, placed a mid-roll ad 1:15 long on a podcast episode on The Mindset Mentor. The podcast episode was about growth and living to your full potential. But a health and nutrition ad can still fit in this category. Also, listeners of this episode may be interested in their wellness.

Place your product ad in a relevant podcast, and podcast listeners will happily listen to it as if it's part of the podcast. It helps to tap different categories that aren't too far from your product's niche interest. 

3. Buy Ads on Small Rather Than Big Shows

In marketing, it helps your brand tremendously if you touch base with your potential customers more than once.

While getting a spot on a well-known podcast is good for bragging rights, it might not be worth the cost, especially if you don’t follow through with that ad. Don’t just go for exposure. Go for conversion. You’ll find that buying multiple spots on smaller shows might be a better use of your money.

This approach is more effective if you place your ads in podcasts catering to different niches that are still within the interest of your target market. You can place your ad in motivation podcasts, self-help podcasts, business podcasts, travel podcasts, beauty podcasts, and even news podcasts in the health industry. Doing this touches base with your audience more than once.

You don’t have to look for podcasts by yourself. Striking a deal with a podcast network will allow you to get a good deal in placing your ad on their various podcasts. Get in touch with any network, and they're sure to have a bunch of relevant podcasts you can advertise on. You can reach out to key staff through LinkedIn or use an email finder tool to directly reach out to their marketing team.

4. Choose What Type of Promotion To Run

There are two kinds of podcast ads: dynamic ads and baked-in ads.

Dynamic Podcast Ads

Dynamic product ads function similarly to in-stream social media ads. These ads are not fixed and may have a different ad depending on who's listening.

These ads are written like your typical 15 to 30-second radio spot. You can get a digital marketing agency to write an ad script for you, or you can use an ad copy generator.

Dynamic ads are placed by an ad platform such as Spotify Ads Studio. The drawback to a dynamic podcast ad is that listeners might skip over it or think it ruins their listening experience unless it's ASMR-grade or has a catchy beat. Let's take a look at another category of podcast ads.

Baked-In Podcast Ads

Baked-in podcast ads are ads that are part of the podcaster's listening experience. They are -- hence the name -- baked into podcast content. There are various types of baked-in podcast ads.

• Native ad: A native ad is an ad explicitly made for the podcast episode it will be featured on. It doesn't disrupt the listening experience since it's likely tied in with the podcast episode's message.
• Sponsored content: Sponsored content could be a segment or an entire episode dedicated to the advertising brand. 
• Paid interview: A paid interview is getting a representative from your brand to be a special guest on a podcast episode. That is a more engaging and nuanced type since there's a structured exchange between the guest and the host.
• Product placement: The podcast host(s) are paid to casually mention the brand name throughout the podcast episode. However, the podcast episode may not necessarily be about anything relevant to the product.
• Direct response ads: This endorsement has the podcast host read an ad script complete with a call-to-action such as "download their app now" or "visit their website now at www..." Unlike the traditional mid-roll or pre-roll ad, a direct response ad can feel seamless with the host's message.
• Product demos: These segments have the host try out the product in the podcast. This segment entices listeners to listen to the host trying out the product. A drawback to this is that a host has to be very articulate and descriptive to be effective, especially if your podcast is audio-only.

There are tons of ways to market your brand through the podcast agency. One fundamental rule is to look at your competitors. Listen to podcasts you think they're advertising on, and take inspiration from their execution. You may copy what they're doing or do something completely different.

5. Track Your ROI

If you’ve ever used social media automation tools for your marketing reports before, tracking your ROI may not be something new to you.

You may be tempted to include reach as your metric for podcast advertising. But reach in podcast advertising is heavily influenced by your budget. A more important metric would be your conversion rate.

How you measure your conversion rate will depend on the type of podcast ad you've run (i.e., dynamic ad, baked-in).

• Whether dynamic ad or baked-in, you can use a promo code to track purchasers who have come from the podcast ad. That is necessary to know the number of podcasters who purchased based on your ad. Purchase rate is a useful metric to measure against your ad's reach. (i.e., You've reached 24,000 people with your ad, and the amount of people who've used the coupon code is 300. You can say that your purchase rate is 1.25%)

So, let's say that a network with 10,000 listeners on a podcast charges $25 CPM for a 60-second baked-in ad. That means you'll be spending $250 to have an ad with them.

If your average purchase rate is 1.25%, you can be confident that 130 people of those 10,000 podcast listeners will purchase something from you.

That's 130 purchases from a $250 ad spend. Your ROAS (return on ad spend) will be the value you've accumulated, minus the total ad spend.

Other KPIs

There are other conversion KPIs to look at besides your direct ROI when advertising on podcasts.

• Vanity URLs are unique URLs that redirect the listener to the website or desired landing page. Vanity URLs are useful for tracking website visitor sources and click-through rates.
• Surveys and forms. Include a section that asks leads how they've learned about you. An increasing audience that has learned about you through podcasts is a good indicator that your podcast advertising campaign is effective.

The KPIs you'll be collecting will ultimately depend on your campaign objective. 

In Closing

Podcasts are an overlooked marketing channel when compared to social media marketing. But with the rapid growth in audio consumption, it may be time you've reached out to podcast advertisers.

Make the most out of your budget by placing your ad in relevant favorite podcasts by your audience. Engaged audiences touch base with an ad multiple times before they convert, so invest your budget in multiple small podcasts than one huge show.

You can create a dynamic ad that the podcast network can place pre, mid, or post-roll, or bake-in sponsored content to feel seamless with the podcast's content. Finally, track your ROI to determine the effectiveness of your podcast campaign.