Podcasts are gaining popularity, and more brands are advertising on this relatively new medium.
According to the Podcast Industry Report, podcast listeners will increase 6.1% year-over-year (YoY) to 125 million between 2021 and 2022. The podcast industry is projected to reach $94.88 billion by 2028.
Podcast audiences are not only large and growing. They also tend to be young, affluent, educated, and generally receptive to podcast ads. These are the same audiences that marketers are trying so hard to reach, yet often get hamstrung by technologies such as ad blockers in other digital media.
But you may wonder if podcast media buying is a worthwhile strategy.
The short answer is yes. When done right, podcast advertising can yield incredible ROI.
This article explores how podcast advertising compares with traditional broadcast radio ads, why it’s so powerful, what businesses it best serves, and how to maximize your ROI.
As of 2021, 78% of Americans are aware of podcasting, while more than one-third (104 million) listen to podcasts regularly. With 88% of the population owning a smartphone, it’s easier than ever to listen to podcasts while on the go. Additionally, the advent of smart speakers (e.g., Amazon Alexa, Google Home, etc.) and in-dash entertainment systems have made it even more convenient to consume podcast content.
Podcast listeners tend to be engaged and loyal, with 80% listening to all or most of each podcast episode they start. 78% of consumers don’t mind hearing podcast ads, and two-thirds don’t skip the ads. Additionally, 69% say that podcast advertising increases their awareness of brands, while 62% would consider buying a product after hearing a podcast ad.
The number of podcast listeners will only grow as more content creators leverage this medium to increase exposure and attract followers. According to one research survey, most new podcast listeners come from radio—indicating that advertising budgets are shifting from broadcast radio to podcasts and may continue to do so in the coming years.
Podcast ads have many unique advantages unmatched by other forms of media. Here are the pros to podcast media buying:
Any business can benefit from adding podcast advertising to its arsenal. The medium can help you achieve various marketing objectives important to today’s companies—whether you have two employees or 2,000.
Podcast advertising is ideal for helping businesses reach new audiences in their target market and grow their reach. It’s suitable for brands that want to appeal to a niche/longtail audience via the large variety of podcast content available. The medium is also helpful for brands that want to build instant trust and credibility by leveraging endorsement from personalities (i.e., podcast hosts) the audience like, know, and trust.
Not to mention, podcast advertising is effective for businesses that want to generate high-quality, warm leads. Prospects who learn about a brand from a podcast ad are seven times more likely to convert than standard website traffic leads.
Partnering with the right podcast can give you access to your ideal audience to maximize the benefits of podcast advertising.Instead of broad ad buys—making a blanket purchase on a platform, series, or genre, you should take a more nuanced approach to podcast advertising through audience-based ad buys.
Start by defining your target market. Besides demographic information, develop an in-depth understanding of your ideal customers’ interests, behaviors, and preferences. Identify the types of podcasts they listen to (e.g., survey your current customers) and don’t overlook shows that aren’t directly related to your products but have the potential to help you reach a larger audience that’s similar to your ideal customers.
You can also narrow down or expand your targeting in other ways. For example, if you run a local business, you can target only listeners in your area. If you want to reach parents, you don’t have to confine your ad buys to parenting content. Children’s programming, morning talk shows, home improvement podcasts, etc., are popular among this segment and can help you grow your reach and boost your visibility.
Compared with video content, podcast ads are much easier and less expensive to produce. The pricing for podcast advertising is also quite transparent and easy to calculate. Follow this formula to get a ballpark idea of how much you’d spend:
Cost of Sponsoring 1 Episode = (# of Downloads per Episode/1000) X CPM
Here are two examples of standard pricing for podcast advertising:
Meanwhile, there are many ways to accurately track the performance of these ads. These include the use of vanity URLs, promo codes, incrementally testing, etc. to help you fine-tune your strategy and optimize the ROI.
Thanks to its low cost, podcast advertising can generate incredible ROI when paired with a strategy that can help you reach your target audience, position your brand favorably, build trust, and drive conversion. A study found that podcast campaigns deliver an average return on ad spend of $2.42.
Navigate the Complex Podcast Media Buying Landscape
The podcast media buying landscape is becoming increasingly complex. You need a well-defined strategy and data-driven media plan to guide your decisions so you can take advantage of this highly effective advertising channel.
Here at Ocean Media, our approach to media buying focuses on creating better business outcomes for our clients. Besides a comprehensive strategy and media plan, we also offer the highest level of accountability and transparency to give you visibility into how your ad dollars are spent and how they perform.
Learn more about our Media Buying & Planning service and get in touch to see how we can help.