How to Squeeze ROI From Podcast Advertising Rates

Podcasts are one of the best ways for brands to reach their target audience. Sixty-two percent of U.S. adults listen to podcasts, and savvy advertisers are taking advantage of the boom in audio content to boost sales. 

However, before you book podcast ad spots, you need to understand how podcast advertising rates work — and how to get the most ROI out of your podcast advertising campaigns. Check out this guide to see how podcast advertising rates work and how you can maximize the dollars spent on podcast advertising.

Why Do Brands Need Podcast Ads?

Podcast hosts accept ads from sponsors so they can earn advertising revenue from their podcasts. But podcast ads are a win for brands, too. Since 42% of podcast listeners say they’ve purchased something advertised on a podcast, this is a creative avenue for boosting sales and brand awareness. 

How Podcast Advertising Rates Work

To advertise your brand on a podcast, you need to find a relevant podcast and purchase an ad spot with them. The most common options are 30-second ads and 60-second ads, although the options vary by podcast. You can provide a pre-recorded ad (which is called a programmatic ad) or you can provide a script that the host either reads live or records ahead of time (this is called a host-read ad). 

Regardless of how you want the podcast to feature your brand, you’ll probably pay podcast advertising rates based on CPM, or cost per mille. This is a fixed rate you pay per 1,000 downloads. For example, if you agree to an $18 CPM and get 3,000 downloads, you would pay $54. 

Ultimately, the ad rates you pay will depend on: 

• The podcast
• Timing (podcast ads cost more during the Q4 holiday rush)
• Ad placement
• Podcast audience
• Niche
• Ad length

This is the standard way brands pay podcast hosts for ad spots, but keep in mind that not all hosts will accept CPM podcast advertising rates. Smaller podcasts might ask for a flat-rate deal where you get a certain number of mentions for one flat fee. 

Standard Podcast Advertising Rates

On average, brands dedicate just 3% of their marketing budgets to podcasts. Even though podcast ads make up a small portion of brands’ budgets, that’s for good reason: they tend to be more affordable than other types of ads. 

For example, in October 2022, the average podcast advertising rate was $24 CPM for a 60-second ad. Some podcast genres cost above that average, including Kids & Family ($28 CPM), Technology ($27 CPM), and True Crime ($27 CPM). 

To complicate matters, podcast hosts are free to set their own rates, too. This is why advertising on huge podcasts like “The Last Podcast On The Left” is more expensive — you’re paying to reach a larger audience. Even so, it’s good to know the industry average so you know whether you’re paying top dollar or not.

Tips for Making the Most of Your Podcast Ad Spend

Every brand wants to see a return on its investment in podcast ads. Even if you secure the best podcast advertising rates, it’s still a good idea to follow these five best practices to make the most of your marketing spend.

1. Watch Your Ad Placement

To get more mileage out of your podcast advertising budget, you’ll need to select the right ad placement. Most podcasts offer three types of placements:

• Pre-roll ads: These ads play before the podcast starts. All listeners will hear these ads play, so as long as they’re relatively short, pre-roll ads encourage your audience to keep listening. Because it’s the first thing listeners hear, podcasts generally charge more for a pre-roll ad.
• Mid-roll ads: These ads play in the middle of a podcast episode. Since listeners are already committed to the content, many people will still listen to mid-roll ads. It’s difficult to fast-forward through a mid-roll ad without accidentally skipping over the podcast content, so many listeners will engage with the ads.
• Post-roll ads: These ads play at the end of a podcast. Since listeners already got the content they came for, post-roll ads have the lowest levels of engagement. However, that does mean they’re cheaper, so they could still be a fit for brands on a tight budget.

2. Choose the Right Type of Ads

The type of ad you choose can also have an effect on your podcast advertising rates. Generally speaking, the more involved a host is in producing the ad, the more it will cost. But listeners like ads more when hosts read them, so if you have the budget, this could be a smart way to boost engagement. 

Every podcast is a little different, but these ad types are common:

• Programmatic ads: This is any type of podcast ad that the host doesn’t read. With programmatic ads, you provide a professionally recorded ad that the podcaster can drop into their content.
• Host-read ads: This is when you provide a script that the host reads. Instead of using audio provided by your brand, the host talks about your products and services in their own voice. Since listeners inherently trust the host more than your brand, this can encourage more engagement.
• Dynamic ads: Dynamic ad insertion places ads in podcasts separately from the recorded content. This means that hosts can swap ads in and out of their content as needed. As a brand, it’s best to avoid dynamic ads. You want baked-in ads, which podcasters include in the original audio recording. This ensures you’re always present on that podcast episode.
• Podcast sponsorships: This is more of an official partnership between your brand and a podcast. Sponsorships are ongoing arrangements where podcasts promote you over a longer period of time. Instead of following CPM podcast advertising rates, sponsorships usually cost a flat fee. This is an expensive option, but it’s a great way to build trust with listeners over time.

3. Partner With the Right Podcast

The podcasts you partner with will have a big impact on your podcast advertising rates. To get more bang for your buck, make sure you partner with the right podcast for the job. 

Always ask podcasters for their metrics. While total audience and listenership are impressive, you should care the most about downloads. CPM rates are based on downloads, so this will give you the best idea of your total advertising costs. 

Aside from their metrics, you should also ensure that:

• The podcast’s content is a natural fit for your brand. 
• Your target audience listens to this podcast. 
• The podcast’s CPM rates are a fit for your budget.

4. Plan for Proper Attribution

You’ll need attribution models in place to prove that your podcast ads are generating ROI. Plus, it’s the best way to make sure you’re paying fair podcast advertising rates. 

The easiest way to attribute leads is through vanity URLs. This is when you create a unique URL for the podcast to refer traffic to your site. Since you only share the unique URL with listeners of a specific podcast, your website analytics can help you tally up website visits and conversions from this podcast ad. 

Promo codes work in a similar fashion, but they’re more effective because they usually give listeners an exclusive discount. Since 29% of people who bought something from a podcast say they used a promo code, this is a smart way to boost conversions, too.

5. Create Effective Podcast Ad Content

Whether you produce your own audio or provide the podcast host with a script, you need to provide top-notch content for your ad. Even the most high-profile ad placements won’t count if your ad content isn’t effective, so consider using a copywriter to create solid content. 

Consider creating a direct response ad that urges listeners to act with a compelling discount code. You can also create sponsored content that meshes with the content of the podcast. For example, if the podcast is about positive psychology, you could share sponsored tips for your mental health app. 

Whatever you do, ensure your podcast ad ends with a call to action (CTA). This tells listeners what action they should take next; it’s the entire purpose behind the ad, so make sure you have a compelling CTA.

Get Fair Podcast Advertising Rates

Podcast advertising rates aren’t set in stone. They fluctuate based on the podcast, your target audience, and the types of ads you purchase. It’s good to know average podcast advertising rates, but when in doubt, contact a podcast host for a custom ad quote. To get more mileage out of your podcast ads, be sure to: 

• Choose the right ad placements. 
• Select the right ad types. 
• Partner with relevant podcasts. 
• Create attribution models. 
• Provide effective ad copy. 

If your brand wants to cut to the chase, Castr acts as a matchmaker between brands and podcasts. We help brands find podcasts that are a natural fit for their audience. With predictable pricing, it’s easy to see ROI on your podcast ad campaigns. Get the Castr media pack now.