The easiest way to begin advertising on your podcast is through an established platform such as Podbean. Here you can input your podcast statistics and get an instant estimate of the advertising rate you can command.
However, even if you use a comprehensive advertising platform, it’s still important to understand the ins and outs of podcast advertising rates. If you want to start advertising your business through podcasts, click here.
This article will look at the most common terms you’ll see, what they mean, and how they affect the rate you can command for advertising on your podcast.
CPM (Cost per mille)
CPM is a common pricing model in blog, social media, and podcast advertising. The letters CPM stand for “Cost per Mile” and refer to the cost you pay for every thousand impressions or downloads of your ad. The M represents the Latin word “mille,” which means thousands.
CPM rates typically vary depending on factors such as the size and engagement level of your podcast audience, where the ad appears in the podcast (pre-roll, mid-roll, post-roll, or sponsored segment), the length of the ad, and the podcast’s overall popularity.
More popular podcasts with a more extensive audience base generally command higher advertising rates. This is due to their wider audience reach and a potentially higher impact. Smaller podcasts may have lower rates but can still be effective for niche targeting or reaching a specific audience segment.
On the other hand, some smaller podcasts can command a relatively high advertising premium because they have an extremely focused audience.
Podcasts with highly engaged audiences, meaning listeners who are actively involved and loyal to the show, may have higher advertising rates as they are more likely to pay attention to ads and take action on them. Engaged audiences may also have higher conversion rates, making them more valuable for advertisers.
Podcasts with a popular and well-defined target audience can command higher advertising rates. Suppose a podcast’s audience aligns with the target audience of a particular advertiser. In that case, the podcast becomes more attractive to that advertiser, and they may be willing to pay higher rates to reach their desired audience effectively.
Different ad placements within a podcast episode can have different rates.
Pre-roll ads (played at the beginning of an episode) and mid-roll ads (played during the middle of an episode) are often considered premium ad placements and may have higher rates compared to post-roll ads (played at the end of an episode) or sponsored segments (where the host integrates the advertisement into the content).
The length of the ad, such as 15 seconds, 30 seconds, or 60 seconds, can also impact the rates.
More popular podcasts with higher download numbers, ratings, reviews, and overall visibility may command higher rates due to their larger audience reach and perceived value for advertisers.
Supply and demand
As podcasts gain popularity, the demand for advertising spots on those podcasts can increase. This is because advertisers are constantly looking for opportunities to reach their target audiences, and popular podcasts provide an effective platform for that.
With higher demand for advertising spots, podcast hosts or networks may increase their rates to capitalize on the increased interest from advertisers.
Ad campaign duration
The duration of an ad campaign can affect the cost in several ways.
Podcast hosts or networks may offer volume discounts for advertisers who commit to longer ad campaigns. This means that if an advertiser purchases a more significant number of ad spots over an extended period, they may receive a discounted rate. This can incentivize advertisers to commit to longer ad campaigns, resulting in lower ad rates than shorter campaigns.
Longer ad campaigns allow advertisers, podcast hosts, and networks to build stronger relationships. Advertisers who commit to longer campaigns may receive additional benefits, such as increased exposure, extended promotions, or custom ad formats.
Podcast hosts or networks may be more willing to negotiate favorable ad rates for longer campaigns to establish a long-term partnership with the advertiser and ensure repeat business.
Longer ad campaigns allow podcast hosts or networks to manage their ad inventory better. They can plan and allocate ad spots more efficiently over an extended period, which may result in more favorable rates than shorter campaigns where inventory management may be more challenging.
Podcast hosts or networks may be more willing to offer discounted rates for longer campaigns as it helps them optimize their ad inventory and revenue streams.
Advertisers may also benefit from longer ad campaigns in terms of increased audience engagement. Podcast listeners often develop a relationship with the podcast and its hosts over time, and repeated exposure to an advertiser’s message can lead to better brand recall and impact.
Advertisers may be willing to pay higher rates for longer campaigns as they recognize the value of building a consistent presence and engaging with the podcast’s audience over an extended period.
Seasonality or campaign objectives
The nature of the ad campaign and its objectives can also impact ad rates. A shorter campaign may be more appropriate if the ad campaign is tied to a specific season or event, such as a holiday or product launch.
In such cases, advertisers may be willing to pay higher rates for shorter campaigns to capture the time-sensitive opportunity. On the other hand, if the ad campaign is part of a broader, long-term brand-building strategy, a more protracted campaign may be more effective, and advertisers may negotiate for more favorable ad rates.
It may impact the rates if you require the podcast host or production team to produce the ad content, such as recording the ad copy or creating custom ad integrations. The podcaster and their team will have to charge for their time and production work in addition to the actual ad placement fees.
Popular podcasts with a loyal and engaged audience often build a strong brand value over time. Advertisers may be willing to pay a premium to associate their brand with a popular podcast that has a positive reputation and a loyal listener base.
Higher brand value can translate to higher advertising rates as advertisers are willing to invest more in advertising on a popular podcast to leverage the podcast’s brand equity.
It’s important to remember that podcast advertising rates can vary significantly depending on these factors, and no one-size-fits-all pricing exists.
Working directly with podcast hosts or partnering with podcast advertising agencies can also help negotiate rates and create effective advertising campaigns.