Programmatic Advertising in Podcasting: What it is & How it Works
What Is Programmatic Advertising and Why Does It Matter?
If you've been around podcast advertising, you've likely heard the term "programmatic" tossed around. Maybe you nodded in agreement, pretending you were in the loop or took a few moments to go down the Google rabbit hole trying to figure out what it actually is. Either way, you're not alone.
Engaging with industry leaders is one of the most rewarding aspects of being a marketing professional. I recently chatted with Adam McNeil, SVP of Client Relations at ADOPTER Media, to demystify programmatic advertising in podcasting. What began as a casual conversation quickly evolved into an insightful discussion about ad placement methods, the shift toward streaming ad insertion, and the implications for brands, agencies, and podcasters alike.
Breaking It Down: Read Type vs. Insertion Type
Before delving into programmatic advertising, let’s emphasize the importance of understanding the two primary dimensions of podcast ads: read type and insertion type. These categories determine both how an ad is delivered and where it's placed within an episode.
Read Type refers to the voice delivering the ad:
- Host-Read Ad: The podcast host reads the ad, lending authenticity and trust.
- Producer-Read or Announcer-Read Ad: A producer or announcer delivers the ad, often providing a consistent tone across episodes.
- Pre-Produced Ad: The brand creates the ad, which is then inserted into the podcast.
Within these categories, ads can be:
- Endorsed: The reader personally endorses the product or service.
- Non-Endorsed: The ad is read without personal endorsement.
- Direct Response: Includes a call to action, such as a promo code or specific URL.
- Non-Direct Response: Focuses on brand awareness without immediate action prompts.
Insertion Type pertains to how the ad is integrated into the episode:
- Live Read: The host delivers the ad spontaneously during the recording. This is rare in today's industry due to the inability to edit post-recording easily.
- Baked-In Read: The ad is pre-recorded and embedded directly into the episode's audio file before distribution. To remove or change it, the episode must be re-edited and re-uploaded.
- Dynamic Ad Insertion (DAI): Ads are inserted at designated markers within the episode at the time of download, typically inserted at the hosting platform level. This allows for flexibility, enabling ads to be updated or replaced without altering the original audio file.
- Streaming Ad Insertion: Ads inserted at the time of listening, generally inserted at the listening platform level (Spotify, iHeart, etc.)
So, Where Does Programmatic Fit In?
Programmatic advertising automates the ad-buying process, allowing brands to purchase ad slots across multiple shows without selecting each one individually. Instead of negotiating placements with individual podcast networks, brands set audience targeting parameters—such as age, gender, interests, and location—and an ad-serving platform manages the rest.
Most ads are filled in a "waterfall" process:
- Direct Sales: A podcast episode has open ad slots. The primary goal is to sell these slots directly, often as host-read ads at premium rates.
- Network-Level Sales: If direct sales aren't achieved, the inventory moves to network-level sales, which may involve dynamically inserted ads across multiple shows within a network.
Programmatic Sales: If slots remain unfilled, they are offered programmatically, often at lower rates but ensuring the podcast still generates revenue.
Programmatic vs. Host-Read Ads: Is One Better?
Traditionally, direct-response podcast advertisers have favored host-read ads for their authenticity and strong listener connection. Many brands consider host-read ads the "gold standard" in podcast advertising.
However, programmatic advertising offers distinct opportunities:
- Scalability: Brands can reach large audiences without negotiating individual ad placements.
- Efficiency: Automated buying reduces manual effort.
- Enhanced Targeting: Data-driven audience segmentation allows for customization based on location, device, and listening behavior.
Over time, programmatic ads can impact listener experience and brand effectiveness. When ads are relevant and seamlessly integrated, they benefit listeners, hosts, and brands. Conversely, poorly targeted or disruptive ads may lead listeners to skip or tune out. Additionally, programmatic ads often lack the personal connection of host-read ads, making long-term brand loyalty harder to cultivate.
For brands focused on long-term engagement, it's essential to balance reach and efficiency with the need to create memorable and meaningful connections with audiences. While programmatic ads can quickly introduce a brand to a large audience, host-read ads offer a level of trust and influence that's hard to replicate.
The Rise of Streaming Ad Insertion
A significant shift is occurring from download-based ad insertion to streaming ad insertion. While most podcast ads are inserted when an episode is downloaded, streaming ad insertion occurs in real-time. Think of YouTube ads that interrupt your viewing experience. The platform, like Spotify, decides which ad you hear at the moment you press play–it’s loaded while listening and can only play while you remain on an internet connection.
Though limited to a few platforms, this shift has major future implications:
- Precise Targeting: The platform knows exactly who is listening at that moment, allowing for more accurate ad delivery.
- Guaranteed Ad Delivery: Brands can be confident that their ads are heard, as they are inserted during streaming.
- Platform Control: Platforms like Spotify, which control both content and ad placements, gain a powerful position in the advertising landscape.
Streaming ad insertion will play a significant role in the future of podcast advertising. However, it also raises questions: Will podcasting become more like traditional digital advertising? What happens to the personal touch that makes podcasts so effective for brands?
What This Means for Advertisers and Podcasters
For advertisers, there's no one-size-fits-all approach. If you seek deep audience trust and engagement, host-read ads will likely remain the gold standard. But if you're looking for scale and efficiency, programmatic and streaming ad insertion are powerful tools.
For podcasters, the shift toward programmatic and streaming ads means balancing monetization opportunities with listener experience. The worst thing podcasters can do is fill their shows with disruptive, irrelevant ads that turn off their audience.
Final Thoughts
After spending time immersed in podcast advertising, I've come to appreciate both the magic of a well-executed host-read ad and the potential and practicality of programmatic. While I once viewed programmatic as the "fast food" of podcast ads—cheap, easy, but not particularly satisfying—it helped me see that when done right, it has its place.
So, is programmatic the future?
Programmatic advertising is not the sole future of podcast monetization, but it is an integral component that's here to stay. Its rise is likely to influence the landscape of ad buyers, leading to a distinction between data-driven programmatic buyers and those who focus on building relationships directly with hosts and networks. This evolution reflects the diverse strategies within podcast advertising, accommodating both automated efficiency and personalized engagement.
Have you had experiences with programmatic podcast ads—good or bad? We would love to hear from you!
ADOPTER Media
We believe in data-driven results and are dedicated to helping everyone make better decisions and advance their work using a platform trusted by Fortune 500 companies and beloved regional brands alike. Have a question about podcast advertising or YouTube sponosrship? Connect with us and we will be happy to help!
