Breaking Down The Value Of Podcasts
Podcasts are truly taking off in the digital space, which offers a huge opportunity for brands to tap into these unique, niche audiences. Many podcasts aren’t even offering advertising options yet because they’re so new, but there are still hundreds of more established podcasts that are. This means that pricing is very competitive right now and it’s a good time to get your foot in the door as an advertiser while the market is less saturated.
The great thing about podcasts and the advantage for advertising on a podcast is that you can present your ad in an authentic and conversational way to an audience who is tuned in.
What do I mean by this?
Podcasts aren’t like radio where you’re bombarded by obnoxious, overly-loud, and long strings of ads one after the other that most people just mute or tune out. Think about it; who reads the ads on radio/tv? Not the radio host (usually) or the tv cast. Who reads ads on podcasts? The host. It’s actuallycoming from the mouth of the person they are tuning into, the person they believe in. You already have a leg up.
Often times podcast hosts are very selective in who they want to advertise. Radio networks, not so much – it’s all about moolah. A podcast host might only be interested in working with brands on their podcast that they have used themselves. We actually see this more often than not. This really lends to the authenticity of the host and credibility with their audience. If you’re thinking, well why is that – doesn’t everyone just want to make money? The answer is yes and no. Yes, they want to make money, but ultimately the reputation of a podcast lies entirely on the host. With radio or tv, an ad isn’t directly reflected on the host or tv show. Podcast hosts are also reading the ads, so it lacks the degree of separation that radio and tv has.
In order for a podcast to be successful, the host has to cultivate a captive audience. They do this through sharing their personality. The best ones do this by sharing the highs and the lows in their life. When you have an audience hanging onto your every word – podcast listeners are committed – you need to share things you support and believe in or you run the risk of alienating and confusing your audience. They’re smart and will see right through a salesy, off-brand ad.
Podcasts are unique in that they typically feature one advertiser per episode and often times a max of only three if there are more than one. This means that people are far less “annoyed” by the interruption on a podcast than radio, and far less likely to tune out or mute the ad.
Podcast ads are also not “jingles.” Most people can tell right away on the radio who is advertising or when to turn off the volume for an overly-orchestrated ad where it’s overtly sales-driving. A podcast ad is more often than not a testimonial or conversation the host is having with the audience. Since podcasts ads are often times natural and conversational, they’re more appealing and engaging to the listeners and come across as less salesy.
Ad copy ultimately depends on the brand and how they want to be positioned, but we always highly encourage our clients to give the host some freedom with ad copy and advocate for an ad lib style. Ad lib means that there is room for interpretation within certain elements of the suggested ad copy, which is typically bulleted. As an advertiser you would send the most important talking points indicating which points must be included, while providing other ad lib ideas. On the other end, a scripted style does read as that – a script – where it’s less conversational and more salesy. Giving the host some freedom to add their own flare is more natural!
Now that I have you convinced that your next advertising route is going to be podcasts, let’s talk measurement. If you’re considering diving into the world of podcast advertising, you should determine how you’re going to measure the performance in phase one.
Defining Podcast Goals
To understand why you need to measure podcast performance, think about the goal of podcast advertising. The first goal is brand awareness. To recap, podcasts can reach an audience that can be very niche and is highly-engaged or tuned in. Ultimately, you have the opportunity to introduce your brand and educate the audience on your unique selling propositions. The second goal, of course, is to generate conversions – either sales or leads.
While podcast ad pricing is much more cut and dry than, let’s say, social media influencer pricing (it’s the wild wild west out there), it can get confusing and is a big financial commitment for some brands. One great thing, is that podcast ad spots are often measured on a CPM basis, meaning the cost per thousand impressions/downloads. This is usually anywhere from $25 CPM to $50 CPM.
This means that the more impressions you are looking for, the larger audience you reach, but the price is based on the CPM. It also means it’s easy to compare podcasts more apples to apples. They might have similar or the same CPMs, the only difference in what you pay is based off of the number of impressions. If you have a small budget, go for less impressions, or smaller podcasts. If you have a big budget, the sky’s the limit. If you see an incredibly high CPM, then that’s a red flag. If you see a low CPM, then you may have hit the jackpot.
Contrasting this, with social media influencers you’re looking for brand awareness and sales as well, but one influencer with the same reach and engagement might charge nothing, while the other charges $1,000 for the same post. Podcasts are more consistently priced (usually) so they are easier to compare.
Measuring Your Goals: Brand Awareness And Conversions
Measuring brand awareness comes down to the number of overall impressions, while measuring conversions means tracking dollars. In more detail, here’s your key measurement tips.
Always Use a Coupon Code
The number one way to track sales from a podcast is by offering a coupon code and tracking the number of redemptions and value in Google Analytics. You can see the number of people who used the coupon and how much money in sales it generated.
When using coupon codes, there are a few things you should keep in mind to make sure the coupon will entice action on the consumer end. The first is to make sure the offer is compelling. If you’re offering a five or 10 percent discount, it probably won’t make a huge impact on the audience unless it’s a big ticket item. They can probably get this discount another time and don’t think it will save them much money.
However, if you’re able to offer an “exclusive” 40 or 50 percent discount, then they will be much more likely to take action. Also, if your business is a service or subscription-based, try offering a free trial. Thrive Market is one example of a brand that offers a discount for purchases as well as a free 30-day trial. Another way to entice purchase is through offering free shipping. Free shipping is an easy way to get a customer to your website and ultimately gives a better value add than just offering a discount.
In terms of coupon positioning in your ad copy, make sure to always have the host mention the discount offer or CTA in the beginning of the ad after the brand has been introduced. Sometimes people will listen to the beginning of an ad spot and skip through the rest, so make sure you’re hitting the CTA at the beginning, middle, and end of the ad copy to lend to repetition and to make sure you’re reaching anyone who might be skipping through.
Know Your Lifetime Value
Determine the lifetime value of your customer to see if you will get a return on investment long term. You can’t measure podcast ROI strictly on the value of the coupons that were redeemed. Instead, you should determine if these customers have a lifetime value where you made part of that value in the first sale and they will come back and continue to be a customer. For example, if you are selling a supplement that requires a monthly purchase and you determine your lifetime value is $300, then your look at ROI shouldn’t be solely based on a $20 coupon code redemption, but the full lifetime value of $300. Ultimately, this isn’t an exact science and there are always ebbs and flows to customer lifetime value, but it’s a good starting point.
On this point, don’t look at the first few days or even weeks of a podcast and think that it’s not working based off of low coupon redemption. The great thing about podcasts is that they have a much longer listening lifetime than other platforms like social media. If you pay to advertise on three podcasts over the span of two months, you could see coupon redemptions coming in even six months later. Like binge watching Netflix series, people discover new podcasts and start from the beginning.
Utilize Linking Whenever Possible
Another way to utilize linking is if the podcast can add a link to your website in a blog post or social posts promoting the episode. This can often come as added value when negotiating pricing for the podcast ad spots. Make sure you create UTMs for blog posts, newsletters, and social posts, so you can see where the traffic is coming from specifically and then check in GA to monitor the volume of traffic and key metrics like time on site, pages per visits, and any goal completions. Did they sign up for your newsletter? Did they fill out a contact form? Did they convert, and if so, how much did they spend? You can get all of this insight when using links.
Ask for Listener Metrics
You can ask for the number of downloads the episode has gotten and determine a rough estimate of how many people heard your ad. This is how you can determine the reach and the brand awareness you generated. Keep in mind that not every single person who downloaded the podcast will listen to your full ad, but it gives you an estimate. Often times someone will hear your ad and it will serve as the brand introducer, generating awareness. Down the line they may convert, but ultimately the podcast ad introduced your company.
What Are You Waiting For?!
If you’re thinking about jumping into podcast advertising, then first determine how much value you can give the listeners and what kind of listener would be the most receptive to what you’re trying to promote. Spending money on an ad spot that is not aligned with your branding or target audience isn’t going to show you an ROI. You can get a sense of podcast pricing through tapping podcast networks and putting the feelers out for podcasts that appeal to your target audience and demographics.
The ultimate fail of traditional advertising methods and traditional PR is the lack of measurement. Since we can’t just rely on general brand awareness anymore, make sure you’re taking every step to encourage conversion and track it to the best of your ability.