In my view, there are three reasons why Companies are willing to spend more on podcast advertising versus other advertising mediums:
- Podcast listeners are captive and are not taking time to fast forward or skip ads. These ads are typically in 30 seconds segments and placed at different points in the episode as embedded content which leads to more “actual” impressions.
- Tier 1 companies have started advertising on podcasts (eg. Rackspace, 99 Universal Pictures, Ford & Stamps.com) and there is significant demand from Companies who want to advertise through this medium. However, there are very few podcasts that have >100,000 subscribers which leads to bidding wars, thereby inflating the CPM.
- The cost of producing advertising is much cheaper than video based platforms as there is no visual requirement; on an all-in cost basis (ie. including production cost) the CPM’s blend to a similar value as other mediums.
Podcast sponsorship is a relatively new form of advertising and I believe companies will develop innovative approaches to content creation in order to more effectively reach subscribers. As listenership and the number of podcasts produced continues to grow, it will be interesting to see the trend of advertisers willingness to pay for these ads.
We would love to hear your opinions or comments on this topic so leave a comment below!