According to an Edison Research study, 17% of Americans over the age of 12 have listened to at least one podcast in the past month. This 2015 statistic is up 2% from 2014’s number of 15%.
While that may not seem like a big deal, it means that an estimated 46 million people listened to a podcast recently—and that’s huge.
With audience numbers like this, it’s easy to see why advertisers and marketers are eager to tap into the podcast market.
“Advertisers are expected to spend about $35.1 million on podcasts this year, up about 2% from last year,” says ZenithOptimedia.
However, this rapid growth has prompted new ways of advertising that go beyond the traditional live host-read ads and behave more like commercials on television. It’s called Programmatic Advertising, or Dynamic Ad Insertion Technology.
While you may be tempted to use this new form of advertising to guarantee revenue, heed a word of caution. These are not the ads you’re looking for.
If you don’t know what programmatic ads are, or why your podcast is better off without them, you certainly will by the end of this article.
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Can My Podcast Really Make Money from Ads and Sponsors?
You have a direct relationship with each and every one of your listeners—and advertisers want to pay for you to speak about their products to your audience. After all, your audience trusts you and listens to your advice every episode.
The Wall Street Journal says that “Ads in top programs can command $50 to upward of $100” per 1,000 downloaders.
You have the potential to earn enough from advertising on your podcast to transition it from a weekend hobby, to an extra source of income, to your sole salary. If you’re considering starting a podcast, or looking for sponsors for your already-established show, this may seem like music to your ears, but hang on.
Let’s start with the basics.
Podcast Advertising Times and Rates
You can typically sell five types of ad times during your podcast episode:
- Pre-Roll Ads, which are mentioned at the beginning
- Mid-Roll Ads appear during the middle
- Post-Roll Ads, which happen near the end
- Outro Ads are the final words a podcast host will call out at the end of the show to remind listeners about what was advertised earlier
- Billboard Ads are short, 10 second ads that are mentioned at the beginning, middle, and end of your podcast
The podcast industry rate standards for the most common ad times are:
- 15-second Pre-Roll Ad: $18 per 1,000 listeners
- 60-second Mid-Roll Ad: $25 per 1,000 listeners
So if you have 5,000 listeners download your episodes on average, you can charge $90 for a Pre-Roll and $125 for a Mid-Roll ad. The total you’d earn per episode amounts to $215.
Multiply that by the number of episodes you air each month, say 10 for easy math. Now you’re up to $2,150 in advertising earnings for just one month.
While you can certainly have different advertisers for each ad spot, you can also try pitching exclusive sponsorships for your entire episode. One sponsor may buy all of your ad time for a few of your episodes, or your entire season.
Traditionally, you’ll either be given a script, or a few keywords about the product or service you’re advertising to your audience, unless you’re a fan of the product and can speak emphatically from the heart about it. Then you’ll work this information into your podcast episode organically.
Set up a specific coupon code your listeners can use when they purchase what you’re advertising. Not only will this keep track of your conversion numbers, but it will also give your listeners a reward (discount) for following your call-to-action.
Going this route puts you in control of all the advertising on your podcast. You’ll never have to worry about ads appearing for safari hunting trips during your animal rights’ podcast, because you’re physically doing all of them.
This is totally the opposite when you go with programmatic ads.
What Are Programmatic Ads?
Choosing programmatic advertising means that you’ll give specific software the ability to insert ads in your podcast episodes instead of recording them and inserting them yourself.
Basically, algorithms will determine statistics from each episode download based on that particular listener’s location, shopping tendencies, behavior, and even time of day, courtesy of Big Data.
Beginning podcasters may see the allure in not having to devote time to selling their podcast while simultaneously also generating episodes and engaging with fans on social media.
But unlike live host-read ads that you have control over during your actual episodes, you’ll have virtually zero interaction with the ads that your subscribers will be listening to. They may sync with your podcast’s message, or they could be totally off the mark.
This is just one of their big setbacks.
Podcasts Are Not the Place for Programmatic Ads
You know how you can tell when that really annoying commercial comes on just by the first few notes of the jingle?
You immediately change the channel so you don’t have to listen to that horrible noise assault your eardrums.
That’s how your listeners will react to your programmatic ads.
Unlike live host-read ads, hearing another (often shrill) voice and blaring commercial music is a jarring experience that takes listeners out of the cozy setting you’re trying so hard to create with your podcast and dumps them into the unfriendly territory of Pop-Up Ad City (ick!).
Because podcast commercials are so short, it takes more effort for the listener to fast-forward through them, especially on mobile devices. Programmatic ads that may not appeal to listeners will only cause them to start skipping your episodes.
This hurts your podcast and does zero for your advertisers: a true lose-lose.
Why Traditional Podcast Ads are Still Working
Live host-read ads are still the best way to advertise on your podcasts.
Never underestimate the fact that people buy from people or brands that they trust and like.
Advertisers are keen to this approach that makes it seem as if the host of the podcast is referring their products as a friend would and not as a paid spokesperson.
As a podcaster, it’s more of a craft to weave these endorsements in organically, so you can charge top dollar if your conversions are high enough. The trick is finding products that mesh with your audience’s interests.
This engagement is what’s going to win over sponsors.
Sharri’s Berries sponsored Burr’s pre-Valentine’s podcast.
“Show her you thought of something unique and different this year, and get her the gift she is sure to love: Sharri’s Berries,” Burr says, “Yeah, get her something unique. Get her something you and f**king four million other people are going to get.”
You would think that the representatives from Sharri’s Berries would be horrified by this seemingly misaligned approach. But the truth is, Sharri’s Berries’ acquisition marketing director said that Burr’s take was not only true to his own brand, but was ROI [return on investment] positive as well.
Sharri’s Berries sold a lot of berries thanks to Burr’s ability to “blur the line between content and commerce.”
One reason people enjoy podcasts so much is because they get exactly the content they want without any annoying radio and television commercials, or blaring internet banners and advertisements.
Programmatic ads may seem like an easy way to monetize your podcast, but they’ll do more harm than good if you really want to connect with your audience.
Stick to live host-read ads during your shows for the most authentic engagement. Don’t pretend to be someone you’re not during your ads and just keep it genuine to your brand and podcast.
Check out our article on The Basics of Selling Sponsorships on Your Podcast for more information about how to target specific sponsors for your show.
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