Live read advertisements are the most popular way to make an income in podcasting, according to the vice president of podcast distribution platform Audioboom, while spot ads are expected to increase as the podcast ad market expands.
Speaking at a session on podcast monetisation for Audiotrain - a training and mentorship programme for creators run by trade association AudioUK - Audioboom’s vice president Mike Newman cited the latest IAB Podcast Revenue report showing a 61% year-on-year increase in the UK, with the industry delivering £54 million in revenue.
“The ad market has been tough but there is still a lot of growth in our industry,” he said.
According to the session, live read ads - either dynamically inserted or baked in - are the most common way to make money, with advertisers most likely to decide if they want to purchase a live read on a podcast based on its CPM.
Pre-recorded spot ads are recommended by Newman for increasing brand awareness rather than a call to action. They can either be directly sold to the advertiser or used programmatically to target a specific audience, the latter being more cost-effective. The Podsights Benchmark Report for Q4 2022 showed that dynamically inserted ads were proven to be the popular option with a conversion rate of 1.12% compared to embedded ads at 0.93%.
“Currently the host and live reads are utilised by the advertisers who are looking for direct response, so they expect you as a listener to take an action,” said Newman. “...Spot ads are generally utilised for more brand awareness, so they are your big household names that you expect to hear on the radio.”
“I think as podcast advertising grows, you can expect to see more [spot ads] in the market.”
Newman recommended that podcasters have a threshold of 10-15,000 listeners on average if they choose to do live read ads, while spot ads have a lower threshold of 5-10,000 listeners. This is based on the CPM, which for live reads is an average of £20-35 while for spot ads it’s £5-15.
Newman also advised podcasters to look at more than one source of revenue to make an income from their podcast, which can include subscriptions like Patreon, Spotify and Apple Podcasts, selling merchandise, and converting the IP to another entertainment medium.
The session also noted that the higher the listenership of the podcast is, the more revenue there will be, so it's important to take the time to build an audience before looking into monetisation strategies.
“It’s very much about building your audience, building that community of an audience around your podcast, and then looking at how you move into these different monetisation options,” Newman said.
