May 26, 2021

How To Prepare A Podcast Ad Campaign Budget

How To Prepare A Podcast Ad Campaign Budget

If you don't know how much money or budget to set aside for your podcast ad campaign, you need to listen to this episode. I will go over the different options and recommendations to follow when creating a podcast ad campaign. I will also share key...


If you don't know how much money or budget to set aside for your podcast ad campaign, you need to listen to this episode. I will go over the different options and recommendations to follow when creating a podcast ad campaign. I will also share key factors that influence the pricing range in podcast ads. 

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Transcript

[00:00:29]Heather Osgood: [00:00:29] Hello, and welcome to The Podcast Advertising Playbook. I'm your host, Heather Osgood. And today, I wanted to talk to you about creating a budget for your podcast ad campaign and how much you should look to spend on podcast advertising. Now, of course, budget is always a tough question because, as marketers, you have a budget set aside, and your goal is to get as big a return on that investment as possible.

[00:00:56] Now, if you are new to podcast advertising, it [00:01:00] can be challenging to determine how much you should spend on podcast ads to get an effective return. One of the first remarks that I would make about budget and podcast advertising, in general, is not running a podcast ad campaign on its own. And what I mean by that is to integrate it into your overall media mix and your overall marketing campaign.

[00:01:28] I often think that when we have a new medium that we're trying as marketers, it's easy to say, I'm just going to invest a little bit in that and see how it works. And the reality is, is that if you invest a little bit, you might get a bit of learning, which will be really great, but you also might not get the full potential of what the medium can deliver.

[00:01:50] Now, of course, you probably, aren't going to want to invest a hundred percent of your budget into podcast advertising if you've never done it before. Still, I would [00:02:00] encourage you to try to integrate it into your plan overall. So take a look at what your strategy is and strategically placed podcast advertising into that mix.

[00:02:11] So what I mean by that is if you were doing a special product launch, if you're doing a special pricing promotion, if you're making some concerted effort already, then integrate podcasts into that overall promotion that you're doing, because you're going to see a bigger return on your investment. 

[00:02:29] The other thing that I think is so important for us to consider with podcast advertising, as with all forms of advertising, is we need to reach people multiple times with your message to get them to make a buying decision.

[00:02:42] The other important piece of all of this, though, is just because you were hitting them on podcast advertising shouldn't mean that it's the only place that you're hitting people. And I think back to, you know, just myself as a consumer, I'm someone who spends quite an [00:03:00] a bit of time listening to podcasts, as you can imagine.

[00:03:02] And I would say the other place I spend quite a bit of time is on social media. So if I hear an ad for a product on a podcast and then I'm on Instagram, and I see an ad for it, I'm going to make that connection. I'm going to get excited about that product potentially. I want to learn about that product.

[00:03:18] I want to know what is happening with that product, right? Because I'm intrigued by what is going on. If I hear an ad for it on a podcast, I'm still going to need those multiple impressions. And that's not to say that you can't get multiple impressions on podcasts, but if you have a media mix happening, you know that you can reach people in various places and are much more likely to make a buying decision.

[00:03:46] The other thing is that the power of audio is that people create mental pictures of your product, which is extremely powerful. But that doesn't mean that all products translate perfectly well to [00:04:00] audio. Seeing something is also very important. And that's why a media mix is really just as crucial as you know, as a marketer, to get across those buying decisions and get those conversions you're looking for.

[00:04:13] So my first recommendation is to make sure that you are integrating podcasts into your overall media mix and that you're integrating podcasts into your marketing plan and your marketing strategy that you're not doing it essentially in a silo all by itself. So that's very important.

[00:04:30] Next, in determining a budget for podcasts, you want to decide the types of podcasts you're going to advertise on. There is a huge range of opportunities in podcasts. So it's complicated to say you should spend X number of dollars on a campaign. You might decide that you want to advertise on Oprah or Joe Rogan or Dax Shepherd. Like, depending on the show you choose to advertise on, that will greatly affect [00:05:00] the amount you need to invest in the podcast space.

[00:05:03] If you're looking to advertise on these mega shows, they can be really super effective. They're also, you know, pretty pricey. So it really depends on what you're looking for. If you're looking to run an ad on Joe Rogan's podcast, you're probably going to spend at least; I would say, 30 to $50,000 on one run.

[00:05:21]So that is going to dictate the budget that you need to spend. I highly recommend that you do not pick a podcast to advertise on if you are thinking about doing a podcast ad campaign. I always recommend that people pick multiple shows to advertise with. And the reason is that not all podcasts are created equal, and it's important for you, the advertiser, to be able to look at a variety of different shows and see who's more effective and see who's less effective. If you're advertising on one podcast, it only gives you essentially learning from one podcast. Ultimately as marketers, our [00:06:00] goal is to find mediums and methods to market our products.

[00:06:05] That is something that we can do again and again, right. We're looking to create these results for the company. And if we get success in podcast advertising, we're going to want to do it multiple times, but you're only going to get that learning, initially, if you do enough of a test to see where there's traction and where there's no traction.

[00:06:23] So whether you decide that you want to advertise on uber big shows or micro shows, that will dictate your budget. But it will also dictate your learning because you're going to invest a lot more on a big show, but you're also probably going to get a better return because more people are listening.

[00:06:41] There are lots and lots of tiny shows, and the challenge with the smaller shows is that while they often have very engaged audiences, it's challenging to scale that if you're reaching 500 people.  So while there are definitely micro podcasts out there, that would be [00:07:00] a good option for you to advertise on. It isn't easy to move the needle with tiny shows. 

[00:07:05]My recommendation is always to head for those mid-level shows.  So shows are getting somewhere between, I would say 5,000 at the low end up into, you know, two to 500,000 downloads. And that could be per episode, or it could be per month, depending on whether you're doing embedded ad reads or dynamically inserted.

[00:07:26] So if you're looking to do dynamic insertion, I would say I probably wouldn't advertise on a show that was doing less than about 20,000 downloads per month. Because again, they're getting those downloads across their full catalog, which means how many actual people are you reaching with your message, which is important, right.

[00:07:43] For that reach piece. So we want to look at the mid-level shows because the mid-level shows, number one, you can do more of them, which will give you the ability to learn more. And then, you can look at scaling. Now I have talked to companies who have [00:08:00] entered the podcast space and have spent $75,000 on a show.

[00:08:05] And the problem with that is if that show doesn't succeed for you. And, you know, in some cases it's not going to, then you've just spent $75,000, and you really haven't seen a good return on your investment. And then you have a pretty negative taste in your mouth about podcasts in general. So I encourage you to go a bit smaller to start with because if you go smaller, you're able to see where you are getting traction, and based on that traction, you can kind of go from there. So I think it's essential to look at that.

[00:08:36] In terms of budgets for mid-level shows, it can vary. I would say fairly greatly. Now at True Native Media, we have a $5,000 minimum spend. Meaning that if you cannot invest at that level, we don't typically engage with you because we know that you need to spend enough to see a good return on your investment.

[00:08:56] Now, with that $5,000, you should be able to advertise on multiple [00:09:00] shows. But I would say that that's just the beginning. Really, a healthy campaign will be somewhere between probably $10K to $30K is a good campaign for you to look at doing a test on mid-level shows. Now, if you can invest at a higher level, of course, you're going to get more learning. 

[00:09:20] And there, I think, is definitely a tactic in this space that if you have more to invest that you go shallow and wide. And what I mean by that is we know that, on average, podcast listeners listen to eight episodes per week, right? So I'm listening to eight episodes. Some of them might be from the same podcast.

[00:09:38] Some of them are going to be on different podcasts. So if, if you are ZipRecruiter, for instance, I hear your ad, potentially, on all eight episodes that I'm advertising on.  And that means that they can go and they run, you know, like a ZipRecruiter might run a couple of ads on hundreds of different shows, and then they're able to come back, and they're able to say, well, gosh, this one succeeded that [00:10:00] one.

[00:10:00] Didn't this one work, gonna kick that one to the curb. They go through and look at the shows performing and then decide to retest those shows or decide to invest in bigger plans with them. But they're doing this initial test on lots and lots of different shows, but that is somebody who does have, you know, in most cases about a hundred thousand dollars plus to spend on a campaign.

[00:10:23] So if that is you, then great, go for that. If that is not you, then my recommendation is to buy typically about five different shows and to run; I would say six to nine ads on those shows because that's going to give you really the opportunity to see if the show working? Is the show not working now? CPMs are something that is always talked about; I would say a ton in the podcast space.

[00:10:50] And of course, we all know CPM stands for cost per thousand, and it's a huge variable. We've got shows that we [00:11:00] can sell ads for a $15 CPM, all the way up to shows that are selling at a $62 CPM. I think $62 is the highest we have right now. So it depends a ton on the types of shows that you're buying on.

[00:11:12] And it also depends a lot on inventory. There are just certain shows that sell really well. And what you have to realize with podcasts, especially when you're doing host read ads, well, and really any, there's a finite amount of inventory. So you might decide you want to advertise on Joe Rogan's show. Maybe he sold out for six months, right. Just because you want to advertise doesn't mean there's inventory to advertise. So inventory's really kind of a big issue in this space, in a lot of ways. So when we look at CPM, sometimes, you know, a $62 CPM is definitely high, but if that show is selling out their inventory and can sell at a $62 CPM, why not sell it a $62 CPM? There's nothing wrong with that show, deciding that they want to up their game and [00:12:00] sell at this higher level. So it depends a ton on the show that you're going for.

[00:12:04] Now, um, you know, there's nothing wrong with advertising on a show that's getting a $15 CPM. That can be a good way of going about it. But I would say my experience has been that most shows will be between $20 and $30 CPM. So, you know, those are some guidelines for you to look at. 

[00:12:22] So, in conclusion, if you're looking to invest in this space, I would say at a minimum, you should spend at least $5,000, but of course, it can go up from there.

[00:12:31] If you're looking to really create a solid test, my recommendation is that you're somewhere between $10,000 and $30,000. And I would say that that would give you about a three-month run. And then, if you really are interested in investing in some of the larger shows, a $100,000 plus is definitely something that you would want to consider.

[00:12:49] I hope that this information has been helpful for you. If you'd like to learn more about podcast advertising, please head on to true native media.com. If you were an advertiser if you're a [00:13:00] brand and you're interested in understanding how podcast advertising works, please reach out. We would love to schedule an appointment to talk to you more about it.

[00:13:08] Have a terrific day, and thanks so much for joining me on The Podcast Advertising Playbook; take care.