Amp 99's comprehensive guide to podcast advertising

What is podcast advertising?

Podcast advertising is similar to advertising in other media like TV, radio or influencer marketing. Businesses want to reach an audience and tell them about their products or services. To do this, they pay podcast hosts, producers or media companies to include ads in the podcast content.

Podcast ads vary in form and content. Sometimes, the host reads the ad as part of the podcast, which is known as a “host-read” ad or a branded collaboration. Other times, the ads can be recorded by professional voice actors, as in traditional radio commercials. The goal is to inform the listeners about a product or service and convince them to try it or visit the company’s website.

So, podcast advertising is all about promoting products or services through podcasts with the aim of reaching a specific audience while also supporting podcast hosts financially.

Getting started with podcast advertising – The ultimate guide from Amp 99

Podcasting is growing rapidly

20 years ago, the first podcasts saw the light of day, and since then, the medium has continued to grow, with a wide and varied range of podcasts and high demand from media consumers. According to Podcaststats, there were around 2500 active Danish podcasts in 2021¹, and DR’s Media Development 2023 also shows that 20% of Danes listen to podcasts on a daily basis, while 13% listen weekly.

Catching up with radio and TV

For many people, listening to podcasts is a natural part of everyday life and something you typically do when you’re commuting, cooking or cleaning². An American study from Sounds Profitable, analysing the media habits of 2,000 Americans, shows that the 16-34 age group now listens to podcasts almost as much as they watch TV and listen to the radio. About 50% of the group listen to podcasts weekly, while 54% watch TV and 59% listen to FM/AM radio on a weekly basis.

Growth in podcast advertising

With the growing popularity of podcasts, commercial interest in the medium has also increased. When the American radio network Westwood One examined advertisers’ and media agencies’ attitudes towards podcast advertising for the first time in 2015, only 10% said that they would consider advertising in podcasts within the next six months. Today, that number has increased to 58%, and a further 58% of respondents report that they already advertise in podcasts.

Mainstream brands are jumping on the bandwagon

In 2023, podcast advertising in the US was estimated to account for $2.25 billion in ad spend, while it was expected to grow to $3.53 billion in 2026. However, it’s still a small share of total spend in the US, with only 9% of budgets going to podcast advertising in 2021.

While podcast advertising was previously used by DTC brands to reach their customers, the trend now points to increased advertising by mainstream brands that have recognised the many opportunities offered by podcasts. These opportunities include more and better tools for measuring impact, as well as the growing number of podcast listeners.

Benefits of podcast advertising

So, there are plenty of Danish podcast listeners out there who listen to their regular podcasts every week. This makes podcasts a platform with great potential for Danish advertisers. Through podcasts, they can reach target audiences that are getting more difficult to reach through social media and traditional media. Here are some of the most important benefits of podcast advertising.

High ad recall

“It’s one of our highest driving return on investments for us and it’s just growing,” says Lisa Bailey, Vice President of Media and Digital Activation at the American mattress brand Sleep Number, speaking to Digiday about their success with podcast advertising. They see the medium as super engaging.

And there may be something to that. Podcasts have a fairly high ad recall. A study from the two agencies dentsu and Lumen Research shows that sound formats can boast an average brand recall of 41%. That’s higher than the 38% benchmark that the agencies see across visual ads.

That trend is backed up by another study, in which as many as 86% remember hearing ads in podcasts within the last week, while the number for social media is 80% and for FM radio is 66%.

The high ad recall is backed up by Spotify’s Sonic Science study, in which participants were able to recall the brands they heard very well.

Ready-to-buy listeners

But it’s not only ad recall that makes podcast advertising effective. In the same survey from Spotify, one in five said that they search for information about a brand or product online after hearing about it in an ad. 30% said that they would probably be more inclined to buy a product or service after hearing about it on Spotify.

Data from Acast in 2023 show that American online listeners of streaming radio and podcasts are more inclined to make a purchase after hearing an audio ad compared to other media channels like social media and video.

Book a free 30-minute consultation on podcast advertising

Increased return on investment

Podcasts also deliver a high ROI. According to a study from Acast, 67% of American marketers who have tried podcast advertising say that for every dollar they spend on podcasts, they get 2 to 6 dollars in return. A further 20% said that for every dollar spent on podcast advertising, they get 6 dollars or more in return. Advertising in podcasts is therefore both a stronger and more cost-effective choice for advertisers today.

Comparison with other media

According to dentsu and Lumen Research, audio ads are also more effective in terms of driving brand choice, with an increase of 10% compared to the benchmark of 6%. If we continue the comparison with other types of advertising, audio ads are also more cost-effective. In dentsu and Lumen Research’s study, podcast ads cost $2.80 per 1,000 views, which is significantly lower than the benchmark of $4.30.

Works on all platforms

Podcast advertising is also effective because the target audience of podcasts is large and growing – podcasts appeal to people with a wide range of interests. Podcasts are also listened to across platforms, which means you can more easily reach your target audience – regardless of whether they prefer Apple Podcasts, Spotify, Google Podcasts, YouTube or something else entirely.

Audio as a catalyst

Audio is a powerful catalyst for brand engagement, and it’s closely connected to our emotional wellbeing. At a time when visual media dominates, audio stands apart by creating an intimate and personal experience for the listener.

Sound design builds good relationships

A study from Made Music Studio shows that there is an 86% correlation between our subconscious emotional reaction to a sound and our conscious desire to either engage with a related experience or avoid it in the future. Audio can therefore be a very effective way to create value and engagement through pleasant sounds in marketing. Therefore, this presents an obvious opportunity for brands to work with sound design in their interactions with customers, with the aim of influencing their desire to engage with the brand in the future.

Strong credibility

One of the things that makes podcasts an incredibly powerful medium is their strong credibility. According to an American study from SiriusXM, respondents report that podcasts are 23 times more credible and authentic than social media. That’s promising for brands – both for those who want to advertise in media that match their own brand identity and for those who want to sponsor a podcast series. With podcasts, there’s plenty of potential to work with the brand’s credibility.

Getting started with podcast advertising – The ultimate guide

A high level of attention compared with other audio media

Podcast advertising is highly effective because we listen very attentively when we have a podcast playing. Acast has examined how much attention we pay to podcasts compared with music streaming and radio listening. Here, 64% say that they give podcasts their full attention, compared with 49% for music streaming and 44% for radio listening.

Figures for, among other things, ad recall also indicate that the high level of attention listeners pay to podcasts carries over into the ads they’re exposed to. In other forms of audio advertising, the ad disrupts the programme’s flow, pace and coherence. In this way, ads in radio or streaming demand the listener’s attention in a completely different way than ads in podcasts do.

How do you advertise in podcasts?

There are three different types of podcast advertising that you need to know about:

• Host-read ads
• Dynamic ads
• Branded podcasts

Host-read ads

Host-read ads are, as the name suggests, ads read by the host themselves. It’s a very popular and credible form of advertising because listeners trust the host and are therefore also more inclined to take the recommendations to heart.

The ads are integrated and recorded as part of the podcast, which makes them harder to distinguish from the actual content and therefore more effective at catching the listeners’ attention. Host-read ads are either written by the advertisers themselves, by the podcast host or through a collaboration between the two.

However, not all hosts are willing to read host-read ads. Therefore, it can be a good idea to make a list of suggestions for the podcast host and engage in a dialogue with them. For some hosts, it can also be crucial to have the freedom to decide for themselves how the ads should sound.

Dynamic ads

Dynamic ads are ads that aren’t a regular part of the content of the podcast, but rather are placed automatically in the episodes, depending on the listener’s profile and behaviour. This makes it possible to target the ads to specific target audiences and achieve greater relevance and efficiency. These ads can either be host-read or produced ads, but they are placed in the content of the podcast at a later stage and can therefore be changed and regularly updated. Dynamic ads give advertisers greater flexibility and the opportunity to adapt their campaigns as needed.

See how we help our clients with podcast advertising

Branded podcasts

A branded podcast is a form of content marketing where a company produces and releases a podcast that reflects the brand’s values, messages and expertise. The purpose is to engage and inform listeners in a way that doesn’t feel like a traditional ad, but rather like valuable and entertaining content. Branded podcasts can include interviews, stories, industry insights or discussions about topics that are relevant to the target audience, thereby creating a deeper connection between the brand and consumers through authentic and engaging listening experiences.

How to measure the impact of your ads

The fact that almost 60% of advertisers today are willing to advertise in podcasts shows that the market for podcast advertising has matured considerably in just a few years. At the same time, this development has created a need for better measurement tools that can demonstrate the impact of advertising.

There are many powerful tools at play today that make podcast advertising a much more data-driven form of advertising. In this way, it’s closer than ever to being performance marketing. This is good news for advertisers who are data-driven, cost-conscious and running campaigns designed to convert.

Here are four ways to measure the impact of your podcast advertising:

1. Pixel-based tracking and discount codes

Pixel-based tracking is an effective way to measure the impact of podcast advertising. By inserting a pixel on the advertiser’s website, you can track when the listener interacts with a podcast ad and subsequently visits the website. Another option is to use discount codes, which makes it possible to track how many people use the code when making a purchase. Both methods deliver concrete data on clicks and conversions, which makes it easy to evaluate the impact of podcast ads.

2. Listener surveys

Another method is to conduct listener surveys where you ask the listeners directly about their behaviour and attitudes towards the ads. This can give you valuable insights into how the listeners perceive the ads and whether they’ve acted on them. Listener surveys can be conducted via online questionnaires or interviews and provide a more nuanced understanding of the impact of the ads.

3. Podcast listener measurement

Podcast listener measurement is a method of analysing listener data to get a sense of how many people have heard the ads and how they’ve reacted to them. This can include data on the number of plays, downloads, listening time and engagement, as well as information about listener demographics and behaviour. These measurements can give you a better understanding of how effective your ads are and how they perform over time.

4. Brand lift studies

Brand lift studies are a method of measuring changes in listener attitudes and behaviour towards the brand before and after exposure to the ads. This can include changes in brand awareness, brand recall, purchase intent and other relevant metrics. Brand lift studies can give you deeper insights into how your ads affect the listeners’ perception of your brand and their decision-making process.

Apple iOS 17 delivers precise data

Apple’s changes to iOS 17 have had a significant impact on performance measurement. These changes have meant that the Podcasts app no longer automatically downloads episodes from podcast series you subscribe to. Instead, only the episodes you actually listen to are downloaded. Since autumn 2023, this has resulted in lower figures for podcasters and advertisers, but it provides a clearer picture of listener numbers for each episode. This is good news for advertisers, who consequently get much more precise data.

Attention metrics

Another way to measure podcast advertising effectiveness is through attention metrics, which measure how attentively listeners engage with the content. And podcasts are one of the media types where listeners are highly attentive.

Acast in the US has conducted a study in which participants were asked to focus on a video of someone doing the washing or ironing – to simulate a multitasking situation, while audio from podcasts, music streaming or radio played in the background. Afterwards, the participants were asked to answer questions about the content they had listened to. The study showed that 64% of participants gave podcasts their full attention, while 35% could remember the host-read ads, and 36% noticed the generic, programmatic ads.

Here are the 18 most valuable tools for podcasts

Optimisation of campaigns in real time

These more sophisticated measurement methods are one thing. Another factor that helps to make ads in podcasts more effective is the use of tools that can optimise campaigns in real time. These are programmatic ads, which, according to some, can be highly effective when they are creatively well executed and appropriately targeted. By optimising campaigns in real time, the fitness chain Orangetheory Fitness, for example, achieved a 16% more efficient CPA through podcasts than through other forms of audio.

Choose the right platform and format

That undivided attention is one of the key elements in creating campaigns that deliver the greatest return, according to a study by the Australian Council of Advertising. The study shows that platforms where we’re highly attentive make us more receptive to brands than platforms where our attention is more divided. High-attention platforms therefore also have a greater impact on key metrics such as customer acquisition, market share and growth.

Quality as an important factor

Another element that helps to ensure a high ROI for advertisers is the quality of the creative elements. According to Signal Hill Insights, 45% of ad buyers believe that the quality of a podcast ad is the most important consideration when selecting a podcast partner.

Scripted or live?

So which format should you choose? For many advertisers, host-read ads have been the preferred choice, based on the perception that this type of ad is more effective than others. However, a study compared unscripted host-read ads with scripted host-read ads and scripted announcer-read ads. The results showed that, when done properly, scripted host-read and announcer-read ads can be almost as effective as unscripted ‘live’ host-read ads. Ultimately, it’s about the quality of the creative work.

Book a free 30-minute consultation on podcast advertising

Brand awareness or lower funnel?

There is now quite a lot of data showing that podcast advertising is effective at multiple stages of the funnel. Advertisers should therefore consider moving beyond the outdated view that podcast advertising is primarily suited to brand awareness. As the figures show, there are plenty of opportunities to create ads that are both heard and remembered. This makes podcast advertising an obvious solution, including for the lower-funnel part of your marketing.

Conclusion

There is a wide range of benefits to podcast advertising that makes it an attractive option for brands who want to reach a dedicated and attentive target audience:

Engaged Audience
Podcast listeners are often highly engaged and loyal to the shows they listen to. They invest time and attention in the content, making them more likely to listen to and remember the ads.

Targeted Marketing
Podcasts cover a wide range of topics and interests, allowing advertisers to target their ads precisely at specific demographic and interest groups. This increases the chances of the ads reaching the right listeners.

High Ad Recall
Studies show that listeners remember podcast ads better than ads from other media. This high ad recall makes podcast advertising particularly effective at creating brand awareness and building mindshare.

Authenticity and Credibility
Podcasts often have a more personal and authentic feel, meaning that listeners tend to trust recommendations and ads delivered by podcast hosts more. This credibility can carry over to the advertiser’s brand.

Flexibility and Creativity
Podcast ads can be tailored in many ways, from host-read ads to pre-recorded spots, and can be seamlessly integrated into episodes. This allows advertisers to be creative and develop unique and memorable campaigns.

With access to the right measurement and optimisation tools, podcast advertising can be highly effective and deliver a high ROI.

¹ https://www.podcaststats.dk/
² https://www.dr.dk/om-dr/fakta-om-dr/medieforskning/medieudviklingen/2023
³ https://soundsprofitable.com/research/the-medium-moves-the-message
⁴ https://www.westwoodone.com/blog/2023/08/21/advertiser-perceptions-podcast-advertising-consideration-and-spending-intention-grow-to-nine-year-high-among-agencies-and-marketers