So your podcast is taking off and you're ready to start adding in ads for your show. Excellent, here are some options of what you can do.
First you should know the typical industry rates. Currently things are around $10-$40 CPM. That is for every 1,000 downloads each episode gets, you can charge the sponsor $10-$40. So if your episodes are getting 50,000 downloads you can safely charge $500 - $2,000 per ad.
Now this fluxuates. The price above is typically for a 30 to 60 second ad. But I know podcasters who bring the sponsor on as a guest and have a 10 minute interview about their product. They can charge a lot more. So length is a factor, but also who's reading it is a factor. If the host reads it themselves, they'll get more, if it's a pre-made ad that will generate less revenue.
Lastly, and this is important, I would wait at least until you have 5,000 downloads per episode, 20,000 is more preferable. There are 2 big reasons for this. First is your audience doesn't want ads. So if you're throwing in an ad just so you can make $4 it's not worth it to burden your listeners for such a small amount. And second, sponsors typically don't want to go through the process of negotiating deals and cutting checks just to spend $4. I recommend giving the audience a ton of value and really get them to like your show instead of milking them for pennies. Mentally set a minimum value for your show. You're worth more than a couple bucks. For me that minimum was $200 per ad. If anyone offered me less I would not agree.
Affiliate ads are where you advertise a product and for every sale you get a % of the sale. You've probably heard an Audible ad, and that's because they've historically been given podcasters something like $5 for every new user they can get to sign up for Audible.
What's great about affiliate ads is they grow with you. If your show takes off and gets more listeners, that means more people hear those ads and take you up on those offers.
What's also great is affiliate programs are usually self service. So you just go to the affiliate portal, register, you get a tracking link, and are set. It doesn't require much if any human interaction.
Here are places you can find affiliates:
These sites also list a bunch of potential affiliates.
When asking your podcast audience to do something, whether it's to buy something, join your patreon, or follow you on social media. You can only expect 1% to do what you ask. Anything more is amazing, anything less is under-performing. So if you have 500 downloads per episode and tell your audience to buy something through your affiliate link, only about 5 will actually do it.
Finding Advertisers Yourself
I love this classic Gary Vaynerchuck video where he shows you how to just hit the ground cold calling people until he gets someone to agree to sponsor him. He's talking about blogs in this video but I think it applies to podcasts just as well.
And this is actually what you have to do. You have to start knocking on doors, ringing phones, loading up inboxes asking for what you want.
This is exactly what Hillary Frank did on the very successful podcast "The Longest Shortest Time". In this interview on Longform she explains how she made a list of her favorite companies and cold called one after another asking for sponsorship.
Another list of potential sponsors you can call are ones that are already sponsoring podcasts. They seem to already be familiar with how it works and might be willing to sponsor more shows. Here is Magellan's report of the top spending advertisers in podcasts for Aug 2019. You can look through their blog for possibly a more updated list. Here's their top advertisers in the UK.
But think about what you're getting yourself into here. If you want to seek your own podcast sponsors and do all that yourself, you will have to do a ton of work. Such as doing a lot of cold calling, negotiating deals, setting a schedule for when the ad airs, and then after it airs you have to go collect money. Are you up for all that? I'm not. That's where Ad Managers come in.
An ad manager or ad agency is someone who does the following:
- seek out potential sponsors
- negotiate deals on your behalf, getting you the highest rate
- get the talking points from the sponsor
- sort out the schedule of how many ad slots are available and when things air
- sometimes even put the ad into your podcast themselves
- after the ad airs, go collect the cash, and pay you
In the end you just have to agree to the sponsor, write the ad, and record it.
Now, to do all that, they will charge you. And this is fine since they are bringing you money, they just take a cut before paying you. This is typically 30% of the revenue they bring in, but I've seen it fluxuate from 15% to 50%. And the places that charge 50% tell me they negotiate better deals for you which means you earn more per ad vs some of the other places. So the % shouldn't be an instant deal breaker.
Here's a short list of podcast ad agencies:
Podcast networks sometimes also act as ad agencies. They will do everything related to ads (you just have to write the ad and record it). On top of that, podcast networks that offer this kind of service, typically also are able to help promote your show with you.
Podcast networks that can be ad managers:
Hosting providers also sometimes offer this service. Here are a list of hosting providers that do this.
Minimum download requirements. I should also mention that a lot of the companies listed above will not accept your show unless you have met their minimum download requirement. This is somewhere around 20,000 downloads per episode, but some places might have a lower one.
Minimum number of ads per episode. Also be aware that some of the places listed above will require you to insert a certain number of ads per episode. They do this to make the partnership with you worth while. But you have a lot of options obviously and your show will bring them money, so make sure to shop around and negotiate deals.
Difficulty filling up your ad slots. Some ad agencies are better than others. I don't know enough of who's good and who isn't. But some just have a hard time filling up your ad slots with ads. They just can't find the sponsors. So it's possible to use more than one. Just be careful when you agree to use one whether you want to do an exclusive deal or not.
Contract duration. Most of the companies listed in this section will ask you to sign a contract which indicate a duration you will be with them. 6 months, 1 year, 2 years etc.
Automatic Ad Insertion
These kind of ads are automatically inserted into your podcast. There's nothing you need to do other than indicate where the ad will go in your show. Sometimes you don't even get the options of whether to approve the sponsor or not, it just gets thrown in. Sort of like the automatic ads you might see on YouTube. So there's nothing for you to record and manage, it's just all automatic.
But because it's all automatic it means you're going to end up getting a lot less for these ads. So this is the easiest to do, but will always be the lowest earning ad.
Places that do programmatic ads are:
Megaphone has a minimum size show that they will accept on the platform. Anchor doesn't. But I see ads that show up through these services will earn between $3 and $15 CPM (per 1000 downloads). Which is low.
A couple bits of terminology you might be interested in.
Baked in ads is when the ad is in the actual audio file that the podcast itself is in.
Dynamic Ad Insertion (DAI) is different than baked in ads since the ad isn't in the podcast that's uploaded to the hosting provider. Instead you set a timecode of where the ad will be placed, and then you set an ad to go in there for a certain amount of time. An ad can run forever, for a certain number of downloads, or for a certain number of days. Only a small handful of hosting providers offer DAI as it's a fairly complicated technology to figure out.
CPM is "cost per mil" or how much you charge per 1,000 downloads of an episode to put the ad in.
Pre-roll, mid-roll, post-roll describes where the ad will be placed.
Paid in arrears. I'm not sure if this is the standard terminology, but be aware that it's typical to get paid 30-50 days after that ad is placed. This way you can show the sponsor how many downloads the ad got and be compensated appropriately.
My podcast is pretty popular and I've been running ads for the last 2 years, so what do I do? Well I've been approached by networks, but turned them down due to them wanting to put more ads in my show than what I was comfortable with and contract lengths were longer than I wanted. I'm currently using AdvertiseCast, hosting on Megaphone.fm, and use Affiliate Ads. AdvertiseCast does fairly well filling up my ad slots, and because I'm hosted on Megaphone it makes it easy to swap ads in and out of podcasts because they offer DAI. And if I want to throw in the occasional affiliate deal, then hey why not. I typically go for affiliate deals when the sponsor has one but isn't interested in paying for ads, they just want to pay for results.
I want to leave you with this wonderful episode of Akimbo which has some really interesting things to say about podcast ads.