Sept. 1, 2021

A Deep Dive Into The Pricing of Podcast Ads

A Deep Dive Into The Pricing of Podcast Ads

Today I am talking about how the pricing of podcast ads works for both podcasters and advertisers. I did a live stream recently and was inspired by all the questions I received about podcast ad prices. There is a lot of confusion, so I thought it would be best for me to sit down and demystify it for you.

Today I am talking about how the pricing of podcast ads works for both podcasters and advertisers. I did a live stream recently and was inspired by all the questions I received about podcast ad prices. There is a lot of confusion, so I thought it would be best for me to sit down and demystify it for you. this episode will cover:


  1. CPM pricing model in podcasts and who this benefits.
  2. The range of prices and why they are so vast.
  3. Why some smaller podcasts can charge more than others with larger download numbers.
  4. Why the pricing of podcast ads is different depending on the ad type and placement.
  5. How smaller shows can leverage bundling to create a win-0win situation for themselves and the advertisers.


If you want to watch the live stream video, you can click here.




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Ep 70 - Podcast Pricing


[00:00:29] Heather Osgood: Hello, and welcome to the podcast advertising playbook. I'm your host, Heather Osgood, and today on the program. I'm going to be talking with you about pricing. So each week I do a live, I stream a live on YouTube, LinkedIn, and Facebook. And this last week, we did an episode around pricing, both for podcasters and advertisers.

[00:00:52] And I had so many questions that I wanted to go ahead and make a full episode for you about it. So before we dig into some of the questions that I [00:01:00] had, I wanted to start by talking about the basis of pricing within podcast advertising; so, typically, we are looking at a CPM pricing model in podcasts, which means, of course, cost per thousand.

[00:01:13] How much does it cost to reach a thousand people? And we see that in the podcast space, CPMs, from my perspective, range somewhere between, I would say, $15 at the low end, up to $50. At the upper end. And, of course, you've got some on either side. I would say the bulk of the ads that we're running right now are falling somewhere between $20 and $25 CPM is very, very common. 

[00:01:38] Many of the podcasts that we saw on True Native Media are at a $30 CPM, but they're going to range somewhere within that space. And in terms of CPMs, of course, we always want to look at the basis for that pricing. And if you're not familiar with CPM pricing, the way I like to look at it is that [00:02:00] from a marketer's perspective, how much does it cost for them to reach a thousand people?

[00:02:05] If I'm going to reach a thousand people with a digital ad, that is going to be, you know, one group of people, I could reach a thousand people with a TV ad. Or with a social media ad, or with a billboard, right? There are all kinds of different ways that I could reach those thousand people. And CPM really gives us a way of saying how much it costs me to reach a thousand people.

[00:02:26] Now, the other layer that's so important with this is it's not about those thousand people, as much as it is about how qualified those thousand people are. So if I'm reaching a thousand people, let's say in Times Square, that's going to be a vast audience. It's going to be just a huge cross-section of whoever happens to be in times square at that moment.

[00:02:48] That's going to be very different than if I'm advertising on social media. And I have a particular, very targeted view of who I'm reaching. So I [00:03:00] have drilled down. I have said this is the exact person that I'm reaching. So, all people are not equal when we were talking about marketing because each company, each organization knows exactly who their customer is.

[00:03:13] And when you know who your customer is, you're going to pay more to reach someone who you know is going to purchase from you, as opposed to just like, Hey, here's a huge cross-section of the U S population. I'm just going to talk to all of them. That's going to be a different audience. And so you can compare CPMs in terms of how much you are paying to reach that market.

[00:03:35] But we also have to look at who it is that you're reaching, and that's why CPMs are really kind of a great equalizer when it comes to trying to look at marketing campaigns. So as we approach podcast advertising from a CPM mindset, that works really well if a podcast is a certain size, if your podcast is over 5,000, 10,000, 20,000 downloads per [00:04:00] episode, then a CPM pricing model might make sense.

[00:04:02] If you were 5,000 or under you know, and this goes if this is your podcast, or if you're purchasing ads on a podcast, a CPM model, really isn't going to make sense because I'm not going to pay $15 to reach a thousand people on a podcast that has a thousand listeners, right. 

[00:04:21] It doesn't make sense for that podcaster to run an ad for $15. So that's when I think the pricing, in some ways, can almost get more challenging because we know that it's easy when we're looking at the bigger shows, we can apply CPMs. And we can say what makes sense and why does this make sense? But when we get into the smaller shows, it gets definitely more challenging.

[00:04:48] So, as we're looking at trying to create pricing for shows, especially who are 5,000 and less, we want to look at a few elements. So the first element that we want to look at is who that audience is? Who exactly am I reaching? Am I reaching an attorney? Am I reaching a doctor? Am I reaching, you know, someone in perhaps like a specific industry, someone who's a fan of a certain product that maybe I'm selling, the more direct your audience is, the more targeted your audiences, the more you can charge for it. 

[00:05:22] If you are reaching an audience again, that is a comprehensive cross-section of any population, that is not going to be worth as much as speaking specifically or directly to someone. So really, looking at our audience targeting is important. 

[00:05:38] The other thing you need to look at is how big the overall audience size is? So we've got the podcast, and we have to be realistic about how many people you are actually reaching. If a podcast has 500 listeners, it will be pretty difficult for most companies to create a lot of traction with an audience that size. Now I have spoken with [00:06:00] advertisers who, you know, just actually someone on the live said that they had advertised to an audience with 500 downloads per episode and had reaped $4,000 in sales from that. 

[00:06:11] So there definitely can be tractions created with smaller audiences. But I do think we have to be realistic about the size of the audience. And if your audience is too small, it will be really challenging for you to create traction. So that's something to think about. And then you also really need to look at what kind of engagement does your audience has?

[00:06:33] So, if you're looking at a smaller audience size, you need to be realistic about that audience's engagement. So are there ways that we can maybe take into consideration? What kind of engagement this audience has? And that could come through ratings and reviews. I know that you know, in some ways, that a lot of people game those, and maybe they're not all totally truthful reviews, but certainly a decent percentage of [00:07:00] reviews I think are.

[00:07:01] And I feel like it's been so interesting lately for us at True Native Media when we get shows that come through. And we look at the ratings and reviews, like shows that come through for representation. And when we see that, gosh, every other comment is complaining about this host voice and the show's production quality.

[00:07:21] That's going to give us some indication that we need to be concerned. Or if we see that, um, there are lots of complaints about different things. Those, you know, those are not people that are there in paid to give you a review. So if you look at a podcast that doesn't have good ratings and reviews, I think you should listen to it.

[00:07:40] Now, of course, on the flip side, if you open a podcast and it's all five stars, and everybody is giving short one word like this is the best show. How much credence are you gonna put into that? So, I mean, there are different ways to look at it. So when we're looking at audience engagement, I think it's important to look at ratings and reviews and see what kind of messaging is [00:08:00] coming through that. Does that host have a social media platform, and what kind of interaction is happening on that platform?

[00:08:07] And you as a host, if you're looking at how engaged your audience is. Run a survey. We should be running surveys, period. But if you can't get people to respond to a survey request that you have, that means your audience probably isn't as engaged as you want them to be. 

[00:08:22] So, just coming back, we want to look at the audience size. We want to look at how targeted the audience is as well as how engaged the audience is. 

[00:08:29] um, And I think that those three principles could carry through whatever size your podcast is. But, as far as smaller shows, I think those are the ones that we struggle pricing the most because as an advertiser, you don't want to overpay for a small show, but also as a host, it has to be worth your while because you don't want to get paid a hundred dollars for 10 hours of work, you might as well, you know, do something else at that point. So, it's important with smaller shows that we look at a flat [00:09:00] pricing for shows, and we deviate from any CPM model.

[00:09:03] I also think that it's essential for us to look at packaging that podcast. If you are buying a smaller show or a host of a smaller show, let's look at social media. Can we include, include some social media assuming that there's an audience there? Do you have an email list that could, you know, there, there could be some inclusion in? Are there opportunities perhaps on a website or other places where you might be able to get some traction? So looking at packaging something together can be an excellent way of creating greater traction for the campaign and pricing it in a way that makes sense. 

[00:09:43] One of the things I think is really important if you're an advertiser or a podcaster is to look at the advertiser's goal? What kind of a return are you looking to receive? Are you doing a direct [00:10:00] response campaign? Are you actually looking to get buys, or are you looking at a branding campaign? 

[00:10:04] The other essential thing is looking at the lifetime value of a customer. If you are advertising and you have a deficient lifetime value of a customer. You're going to have to sell a lot more. You're going to have to get a lot more customers in where, you know, whereas if you've got a higher-priced value of that customer, you don't need to get as much traction. So it might make sense to go into a package and pay $1,500 for a thousand downloads and social media posts and e-newsletters and websites, you know, banner ads and things, because maybe you don't need to get that many customers to get a return on that investment. 

[00:10:42] So when we're thinking about pricing, it must be a win-win situation. The podcast host has to feel validated in what it is that they are doing for that advertiser.

[00:10:55] And the advertiser needs to know that they're actually going to get something out of the campaign. I do recommend thinking about the idea of creating affiliate relationships. Suppose you are looking to either advertise on smaller shows or a host with a smaller show. Affiliate relationships can really create nice win-win situations for both parties. So that can be an option to look at.

[00:11:20] Now, as we're looking at bigger shows, maybe that 20,000. 10,020,000 download plus per episode, of course; that's where CPM pricing really comes into play. That doesn't mean that there can't be additions to social media or other things to help bolster a campaign. But in general, that's when we're really going to really just hit that flat CPM rate.

[00:11:41] And as we're looking at CPM pricing, we need to realize that there is a different structure around CPM pricing depending on the type of ad you have. And that was one of the questions presented within the live that I [00:12:00] did. One of the listeners asked if there is a price range or price difference between announcer-read dynamic ads, host-read embedded ads, or even custom long-form segments. And yes, there definitely is going to be a difference in pricing for those. So when we're looking at embedded ads, typically, we're using the CPM pricing as a guideline. So let's say that we have an audience of 10,000 downloads per episode in a 30 day period.

[00:12:30] And we're going to charge, let's say, $25 CPM. That means you're gonna be $250 for that ad. Now we are not doing true CPM pricing on this because we are presuming that the show will get about 10,000 downloads within a 30 day period. But that doesn't mean that's the exact number. You might get 10,000; you might get 9,500, you might get 11,000 or 12,000.

[00:12:56]  The other thing with embedded ad reads is that you're going to [00:13:00] continue to accumulate downloads after that window. that we are estimating that number. So really, when we're talking about embedded or baked-in ads, it really is flat pricing that you've agreed upon. Now it is based on a CPM model. We're backing that price up with a CPM basis, but we're not charging you on a true CPM basis.

[00:13:22] When we look at dynamically inserted ads, they absolutely should be priced on a CPM basis. Meaning that we've decided, what is that CPM? And at the end of that specified period, oftentimes it's a four-week period; how many impressions were delivered within that four-week period?

[00:13:41] And then based on that CPM pricing, what should the price of that campaign or run be? And that's really when we're looking at a true CPM model. Because we can forecast with not a ton of accuracy, to be honest, how many downloads do we think are going to happen within a four-week [00:14:00] period? Um, I'm sorry, how many impressions do we think will happen within a four-week period. Still, really there is no great way of knowing exactly how many impressions can be delivered until we get to the end of the campaign. 

[00:14:13] So we do our best to project based on history, but at the end of that run, we're going to have to look and say how many impressions were actually delivered. And then, based on the impressions that were delivered, we're going to charge a CPM pricing to get to the ultimate pricing of the campaign. 

[00:14:30] Now, certainly, host-read dynamically inserted ads may have a different CPM pricing than an announcer-read ad. But there are a couple of things to consider here. They both have a lot of value.

[00:14:46] The first has a lot of value because it is a host-read ad. And that host-read ad is really bringing that influencer marketing, which we know is very powerful. The second thought is that programmatic piece, which is the announcer-read ad. And oftentimes, there is, I have seen, a fairly high price placed on those based on the fact that there can be much greater targeting that is done. So when we're talking about those announcer read ads that are programmatically inserted, the advertiser is purchasing them from a geographic, demographics, and several other, you know, perspectives of targeting for that campaign.

[00:15:29] So they're very different types of campaigns. And I have found that there can be a greater range in CPMs for programmatic ads, from a $2 CPM all the way up to a $50 CPM. So it depends a lot on the company that is doing the placing of the ads. And it also depends on how targeted those ads are. So the more targeted they are, typically, the more we're going to pay. 

[00:15:53] The other piece that happens with programmatic is that we do have a lot of remnant ad sales that go on. [00:16:00] Remnant, meaning we've got all of these open avails. If somebody doesn't place an ad, then we're not going to get any money for it, right. Even if that impression happens today and an ad is not served, that impression is not one we can get back.

[00:16:13] And so is it better to buy that at a $2 CPM and have something coming in, or is it better to have nothing coming in? So it just depends on the perspective that you take. So those are kind of the ranges that happen. As for any custom segments, we definitely have done a number of those at True Native Media.

[00:16:35] And that can oftentimes be where the brand is actually going to come on the show, and we're going to create content all around that particular advertiser for an entire episode or an entire segment. And of course, when we were creating content like that, where it is truly sponsored content, you have to be really careful that it's not an, you know, it is an advertorial, but it's not a 30-minute ad. Cause no one [00:17:00] wants to listen to that. So what we're doing is we're really trying to say, how can we tell an intriguing story around this company that the listener will be interested in? And I have found that they are all over the board in terms of those segment pricing.

[00:17:18] It really does depend a lot on the type of content that you're going to be creating for that particular advertiser or that kind of content that you're receiving. And again, it goes back to a win-win situation. Another piece to consider when you're talking about sponsored segments is whether that episode has any external ads in it or it will be ad-free because that could change the segment's cost.

[00:17:44] So those custom segments are definitely tricky. The minimum we have ever sold a custom segment for has been $1,500, and it's gone all the way up into the thousands of dollars. So it just really depends on the type of [00:18:00] partnership that you are creating. 

[00:18:02] The other question that I had and alive that I wanted to address was that someone had asked about my thoughts on 15, second ads and how to leverage the correct pricing for shorter ads essentially.

[00:18:16] Now, my opinion on shorter ads is that it depends a lot on the type of ad you're doing. If you were doing a scripted ad that is 15 seconds long, that is not what I would put into the influencer marketing category. So when we're talking about host read endorsement ads, it is nearly impossible to create that in 15 seconds because we are looking for your experience with that product?

[00:18:44] What makes that person interesting and relevant and something that, that, you know, the audience is going to be wanting to purchase? That is not going to happen in 15 seconds. Now, if you wanted to create a campaign where maybe there was a 15 second, like a teaser, like, Hey, stay tuned later in the episode, we will be talking about one of my favorite brands for recruiting; ZipRecruiter. Make sure you go check them out. 

[00:19:09] That's very different than an actual ad. So I'm not typically a fan of 15-second ads. At True Native Media, we usually sell 60-second ads. And most of the time, they go over 60 seconds. Because again, we're really pushing that influencer marketing. So we need to think about the ad's positioning and what it is that we're trying to deliver.

[00:19:34] Now, if I'm doing a scripted 15-second or even 30-second ad. That is definitely doable, but you're going to want to price that, I would say, very differently. And I would certainly take that at a lower CPM basis, probably around that $15 or like sub $15. Uh, that would be my input on deciding the length of the ad and the pricing.

[00:19:59] [00:20:00] So really, to summarize what we've covered in this episode. Certainly, there are CPMs that we want to use as guides within the industry. When we're looking at larger shows, CPMs make sense. When we're looking at dynamically inserted ads, of course, we're going on a CPM basis. If you're looking at any ads that are sub 5,000 downloads per episode, really want to look at that package pricing and see what you can do to bolster the buy by adding in additional elements to increase exposure and make it a win-win all around. So I hope that this episode has been helpful for you. I am very excited because we are working on getting our YouTube channel up and running. 

[00:20:42] There isn't a lot of content on YouTube about podcast advertising. And so we are working on trying and getting that up and running. So please go over to YouTube and search for True Native Media. We would love for you to watch our videos there. And if you have any questions or comments for me, I am [00:21:00] very active on LinkedIn.

[00:21:01] Please head on over there and send me a message. I would love to connect with you. Have a great day, and we'll talk to you again next week. Take care.