If you’re looking to sponsor podcasts, you probably have questions about podcast advertising rates: How are costs determined? What does CPM stand for? Are dynamic podcast ads priced the same as traditional podcast sponsorships?

In this article, we’ll explain how podcast ad rates work with regard to podcast advertising costs.

How Podcast Advertising Rates Work

Podcast advertising is sold on a CPM basis, which means it’s sold by the thousands. CPM stands for “cost per mille.” (Mille means “thousand” in Latin.)

If a podcast’s CPM is $25, that means you pay $25 for every thousand listens an episode receives. (A unique download or stream counts as a “listen.”)

For example: X-Pod has 10,000 listens per episode.

Divide by a thousand, and multiply the 10 by the $25 CPM. This works out to a $250 cost per episode.

But with most podcast ads, you’re not charged on an exact number of downloads or streams.

Podcast advertising rates are often based on the consistent average downloads/streams that each episode gets within its first 30 to 60 days. (That seems like a wide range, but it’s not. Most podcasts hit over 90% of their downloads in the first few days of release.)

In the case of the above example, X-Pod charges $250 for each episode you advertise on and they’re sure it will get at least 10,000 listens (based on its normal audience).

Any listens delivered above 10,000 are a bonus for the sponsor, and this happens often. For instance, an episode’s listens can overdeliver significantly if the podcast books a big name guest. This means more exposure for the podcast advertiser at no added cost.

How Dynamic Podcast Advertising Rates Work

Dynamic or “inserted” podcast ads are maturing as a viable alternative to the usual style. With this method of serving ads, your spots are inserted into the podcast when downloaded or streamed. The dynamic element allows podcast ads to refresh over time, be geo-targeted by region, or even spread across entire podcast networks.

This is seamless to listeners–and you often can’t even tell it was inserted after the fact with host-read ads. (If it’s not host-read, it’s the podcast equivalent of hearing an ad on the radio.)

Dynamic podcast advertising rates also use a CPM to determine the cost to the sponsor. However, in this case you are paying for total listens and not per episode.

The benefits of these ads are that you can increase your exposure beyond a podcast’s new episodes. In many cases, you can insert new ads onto old episodes or across an entire network.

Using the example from above, X-Pod has 10,000 listens per episode. Let’s say its entire catalog receives 50,000 listens in a month. With dynamic advertising, you can run your podcast ads across all of them. At a $25 CPM it would cost $1250 to sponsor the month.

This way, each listener hears your company’s ad regardless of which episode of X-Pod they listen to during that time.

Geotargeted podcast ads are also a possibility, though often at a high CPM. While podcasting continues to grow, there are issues of scale when it comes to small markets or small podcasts. As it currently stands, location-targeted podcast advertising only makes sense for larger markets and across multiple networks.

There Are No “Industry Standard” Podcast Advertising Rates

There is no “industry standard” CPM to advertise on podcasts. Podcast advertising rates vary with each podcast, and so do the advertising formats.

Some podcasts offer prerolls or “top of show” ads. Others offer midroll or “mid-show” ads. A few offer postroll of “end of show” ads.

Podcasts either sell each type at a separate CPM rate, or a combination ad placements for a single CPM. Almost all podcast ads are delivered by the podcast host–although with dynamic insertion we are now also seeing radio-style spots come into play.

Depending on the podcast audience and ad format, you can expect to pay anywhere from a $10 to $50 CPM. Advertiser demand and the quality of audience dictates the exact amount charged and the podcast advertising cost.

For instance, a podcast covering true crime can have a very large audience with broad interests and a wide demographic. On the contrary, a podcast focused on software engineering has a narrower focus and much smaller audience. However, the engineering podcast’s listeners earn more on average. Not only that, but they’re also looking to make both personal and business purchases.

The total cost of sponsoring either podcast might work out the same, but the more attractive audience depends on what your brand or business is looking to advertise.

Each campaign is unique, and podcast advertising budgets vary per sponsor. Our podcast advertising agency can get you the best podcast advertising rates to reach your target audience.

For more information, contact ADOPTER Media to start the conversation.

And if you have any questions or suggestions for future articles, please do get in touch!