Podcast Advertising Rates Explained
Podcast advertising rates are the cornerstone of podcast sponsorships. In fact, the first question a podcast advertiser has is usually about podcast advertising rates: How are podcast ad costs determined? What does CPM stand for? Are dynamic podcast ads priced the same as traditional podcast sponsorships?
In this article, we will explain how podcast ad rates work with regard to pricing for podcast sponsorship costs.
How Podcast Advertising Rates Work
Podcast advertising is sold on a CPM basis, which means it’s sold by the thousands. CPM stands for “cost per mille.” (Mille means “thousand” in Latin.)
If a podcast’s CPM is $25, that means you pay $25 for every thousand listens an episode receives. (A unique download or stream counts as a “listen.”)
For example: X-Pod has 10,000 listens per episode.
Divide by 1000, then multiply the 10 by the $25 CPM. This works out to a $250 on a cost per episode basis.
But with most podcast ads, placements are "episodic," which means you’re not charged on an exact number of downloads or streams based on how many impressions the episode delivers.
Podcast advertising rates are often based on the consistent average downloads/streams that each episode gets within its first 30 to 90 days. (That seems like a wide range, but it’s not. Most podcasts hit over 90% of their downloads in the first week of release.)
In the case of the above example, X-Pod charges $250 for each episode you advertise on and they’re sure it will get at least 10,000 listens (based on its consistent listening audience).
Any listens delivered above 10,000 are a bonus for the sponsor, and this happens often. For instance, an episode’s listens can overdeliver significantly if the podcast books a big name guest. This means more exposure for the podcast advertiser at no additional cost.
(It's also why episodic buys are the best deal, especially if it's a podcast that simulcasts across audio and YouTube. Annual deals or "upfronts" also pay off as the year goes on and a podcast audience grows.)
How Dynamic Podcast Advertising Rates Work
Dynamic or “inserted” podcast ads can be a viable alternative to the usual style. With this impression-based method of serving ads, your spots are inserted into the podcast when downloaded or streamed. The dynamic element allows podcast ads to refresh over time, be geo-targeted by region, or even spread across entire podcast networks for "run of network" (RON) campaigns.
This is seamless to listeners–and you often can’t even tell it was inserted after the fact with host-read ads. (If it’s not host-read, it’s the podcast equivalent of hearing an ad on the radio.)
Dynamic podcast advertising rates also use a CPM to determine the cost to the sponsor. However, in this case you are paying for total listens and not per episode.
The benefits of these ads are that you can increase your exposure beyond a podcast’s new episodes. In many cases, you can insert new ads onto old episodes or across an entire network (just make sure you have an impression cap, so listeners don't hear your ads to the point it's annoying).
Using the example from above, X-Pod has 10,000 listens per episode. Let’s say its entire catalog receives 50,000 listens in a month. With dynamic advertising, you can run your podcast ads across all of them. At a $25 CPM it would cost $1,250 to sponsor the month and you'll be charged on the exact number of audio impressions served, up to that amount budgeted.
This way, each listener hears your company’s ad regardless of which episode of X-Pod they listen to during that time.
Geotargeted podcast ads are also a possibility, though often at a higher CPM. While podcasting continues to grow, there are issues of scale when it comes to small markets or small podcasts. As it currently stands, location-targeted podcast advertising only makes sense for larger markets and across multiple networks where you can achieve a reasonable ad frequency.
There Is No “Industry Standard” Podcast Advertising CPM
There is no “industry standard” CPM to advertise on podcasts. Podcast advertising rates vary with each podcast, and so do the advertising formats offered.
Some podcasts offer prerolls or “top of show” ads. Others offer midroll or “mid-show” ads. A few offer postroll of “end of show” ads.
Podcasts either sell each type at a separate CPM rate, or a combination ad placements for a single CPM. Almost all podcast ads are delivered by the podcast host–although with dynamic insertion we are now also seeing radio-style spots come into play.
Depending on the podcast audience and ad format, you can expect to pay anywhere from a $10 to $50 CPM. Advertiser demand and the quality of audience dictates the exact amount charged and the podcast advertising cost.
For instance, a podcast covering true crime can have a very large audience with broad interests and a wide demographic. On the contrary, a podcast focused on software engineering has a narrower focus and much smaller audience. However, the engineering podcast’s listeners earn more on average. Not only that, but they’re also looking to make both personal and business purchases. Similarly, a biohacking podcast's audience is more likely to be receptive to nutritional supplements or health-related advertisers, so they can charge a premium price.
The total cost of sponsoring different podcasts might work out the same, but the more attractive audience depends on what your brand or business is looking to advertise.
Each campaign is unique, and podcast advertising budgets vary per sponsor--many also fluctuate based on the time of year. Our podcast advertising agency can get you the best podcast advertising rates to reach your target audience.
For more information, contact ADOPTER Media to start the conversation.
And if you have any questions or suggestions for future articles, please do get in touch!
Glenn Rubenstein
Glenn Rubenstein is the Founder and CEO of ADOPTER Media. Since 2007, he's helped brands engage online audiences through authentic advertising.
