Historically, the power of podcast advertising has been a secret that performance marketers–myself included–wouldn’t mind keeping. I want to do my part in preserving what makes podcasting special, but based on the explosion of attendance at industry events and the number of household name brands I hear in my own favorite shows, the secret is out.
Therefore, it’s critical that we turn our attention to informing the ways that advertisers can and should play in this space, and the nuances to doing so successfully, so as not to water down the elements that make this channel so remarkable to begin with.
Podcast Advertising’s Performance Marketing Roots
I first ventured into podcast advertising back in 2014, coinciding with the debut of Serial’s first season. During that period, the podcasting landscape was predominantly occupied by performance advertisers, and for good reason. Podcasting was, and continues to be, an excellent gateway into the realm of paid marketing. With its streamlined ad production, modest investment requirements, and impressive audience response rates to calls-to-action, it quickly proved to be a standout channel in many marketers’ media mix.
These factors, among others, have consistently made podcasting a highly effective choice for performance advertisers. It’s no exaggeration to say that these brands played a foundational role in shaping the podcasting landscape.
Podcast Advertising Reaches New Audiences
A significant development isn’t just that podcast advertising can now move the needle on reach and brand awareness (which it certainly can); it’s also that there’s a sizable audience here that cannot be reached through traditional offline marketing.
In the 18-34 age group, podcasting reaches 18% of those who don’t listen to radio and 19% of those who don’t watch traditional broadcast TV. According to a recent study, avid podcast listeners are more inclined to subscribe to ad-free audio and TV services.
That incremental reach (as full-funnel marketers know very well) is absolutely critical to growth marketing. Lower funnel media focused on conversions, whether that’s podcasting or any other channel, can only scale when you are replenishing your funnel with new customers for those efforts to convert. Depending on the stage and scale of a brand, bringing in visitors can substantially boost lower funnel performance. Podcasting is a one-two punch in its ability to both reach additional audiences and move them through the funnel.
3 Podcast Advertising Factors To Consider
The ability to target harder to reach audiences should be top of mind for advertisers regardless of whether their goals are awareness, customer acquisition, or somewhere in between. But podcast advertising is a truly unique endeavor that needs to be strategized and executed with its distinctive elements in mind. Not only will this help preserve what our industry has come to know and love about the space, but the impact of the advertising itself hinges on brands knowing how to construct their campaigns around what will (and won’t) work here. Factors to consider include:
1. Host Reads
The power of the most traditional podcast format, the Host Read, has been studied and reported on at length. These advertisements, often featuring genuine personal experiences and more natural delivery, bear a striking resemblance to influencer marketing, and there’s a good reason for that. Many influencers either host podcasts themselves or have built their influencer following through podcasts. Therefore, authenticity plays a crucial role in these partnerships.
Additionally, collaborating with multiple shows allows for the utilization of distinct perspectives and storytelling. This approach helps create a campaign grounded in expert recommendations from various sources, effectively engaging diverse audiences and allowing hosts to choose an approach that they know will resonate with their own listeners. In the same way, with millions of podcasts in existence, advertisers can choose to work with hosts across a variety of sizes including macro, micro and everything in between.
2. Audience Targeting and the Role of Creative
Apart from benefiting from a host’s personal influence, there’s a growing variety of options using run-of-network inventory and audience targeting, much like in streaming audio and video. Ads are pre-recorded and inserted into a podcast episode during a break, ultimately served to a listener because they fit the audience criteria for the campaign either based on their characteristics or the type of content they’re listening to. Advertisers can even use their own first party data to reach people who resemble current high-value customers, those who used to be customers, or even seek out those that haven’t engaged with their brand before.
At times a podcast host might voice these ads, but most commonly, brands utilize professional voiceovers from the podcast partner or furnish their own creative. In either case, it’s essential to consider the context in which it will be consumed. Podcasts are an extremely leaned-in experience where it doesn’t take much to capture or maintain a listener’s attention. Running an ad with energy or sound effects that don’t fit the environment can be jarring and do a disservice to how the advertiser is perceived.
Some podcast partners have specific rules about using music in ads, while others want to create the ad themselves to ensure it sounds natural across their shows. This helps maintain a stronger connection between the ad and the network of content in which it may land. With these types of buys as well as with host reads, rotating in fresh, highly relevant creative is key in maintaining engagement and the user experience, especially given the light commercial load and the heightened attention that will be paid to your ad.
3. Cost and Efficiency
If you imagine a spectrum of podcast advertising options, with highly customized host-reads and bespoke podcasts on one end and programmatic audience-based buying on the other, there’s a vast and exciting array of choices in between. However, one consistent thread is pricing. Compared to the channels where most of our clients have achieved scale–like OTT, linear TV, streaming audio, and display ads–podcasting is categorically more expensive on a CPM (cost per thousand impressions) basis.
Several factors contribute to this high-end pricing, including the personal connection with podcast hosts, the lower ad clutter, and the longer length and customization of the creative. Despite the higher CPMs, we consistently observe that these premium rates are easily offset by a substantial increase in response and conversion rates. The best performing shows can at times have the highest CPMs; cost does play a role here, but creative execution and audience composition often outweigh efficiency. A recent study also revealed that audio advertising, especially in podcasts, excels at capturing audience attention. Podcasts outperform other digital, social, and TV benchmarks in terms of attentive seconds per thousand impressions. In today’s fragmented media landscape, where screens and devices abound, and time is at a premium, these findings underscore the value of investing in this channel.
The specific approach to harnessing podcasting’s potential will naturally vary depending on campaign objectives, but adhering to best practices that have shaped this space is essential. It’s worth noting that improvements in how our media partners monetize and manage their ad inventory are also pivotal in this equation, a topic frequently discussed in our industry. But this space has always been focused on continual self-improvement and the strides that have been made are truly remarkable.
Embracing the evolving ad tech is an exciting venture for performance marketers, offering new and sophisticated ways to engage with consumers. Furthermore, due to the incremental reach and the ability to find new audiences for those brands who have already reached prospective customers en masse, podcasting will very likely provide a gateway to additional growth.
With the extraordinary progress and diversification of this channel, building a multifaceted advertising portfolio within podcasting is not only feasible but highly effective. Podcasting has proven its role as a full-funnel marketing channel, and by combining personalized endorsements, tailored creative content, and emerging targeting and technology, podcast campaigns should be an integral component of virtually any brand’s media strategy.
Want to learn more about Podcast Advertising? Tune into Cafarelli’s interview on Podcast Advertising Playbook, dropping October 25th on www.podcastadvertisingplaybook.com and wherever you listen to your podcasts.