Podcasts – What are they? 

Podcasts are a form of digital audio consisting of content that can be downloaded or streamed over the internet similar to radio shows except you can go back and listen to the episodes. Key characteristics of podcasts are: 

• Content: Typically focusing on specific topics or themes with one or more hosts discussing the topic with relevant stories, data, and intel. 
• Accessibility: Podcasts are available on different platforms such as Spotify, Apple Podcasts, Google Podcasts, and more
• Subscription Type: Users can subscribe to shows and receive automatic updates informing them a new episode is available to stream 
• Flexibility: Formats can differ in length and frequency, providing more variety than radio shows 

Ultimately, podcasts provide listeners with unique and convenient ways to engage with content based on their interests. Given the easy accessibility across multiple platforms, different content, and flexibility, podcasts have been a game changer in how listeners consume audio and information. 

Podcasts and Advertising – How do these overlap? 

As podcasts have gotten increasingly popular, their consumption has continuously grown over time with 135 million people in the U.S. tuning into podcasts monthly. Audience demographics range from with Millennials leading the way (32%) and Gen Z catching up quickly. Even older demographics (55+) are adopting podcasts at a rapid pace, growing by 22% between 2021 and 2023. Due to this, advertisers have leveraged running advertisements on podcasts to hone in on these audiences along with several other reasons: 

• Increased Engagement: Listeners gravitate towards host read spots as this provides a sense of authenticity. 63% of listeners trust podcast hosts recommendations. 
• Targeted Capabilities: Podcasts allow brands to connect with niche audiences based on specific interests or demographics, ensuring highly relevant messaging. This is done through a multifaceted approach such as:
  • Demographic Targeting: Age, gender, location, and language.
  • Interest and Behavioral Targeting: Listeners can be segmented by their interests, behaviors, purchase intent, and even lifestyle (e.g., fitness enthusiasts, parents, gamers).
  • Contextual Targeting: Ads can be matched to podcast content, keywords, or themes to ensure relevance and maximize engagement.
  • Predictive Audiences & First-Party Data: Advanced platforms use behavioral data and AI to identify and target listeners most likely to engage with a brand, all while maintaining privacy compliance.
• Multichannel Approach: Combining podcast ads with other media campaigns significantly boosts brand trust and recall.
• Cost Effective: Podcasts provide flexible pricing options through programmatic ads making advertising on podcasts relatively affordable for everyone. There are several placements for these ads with different costs associated. Those are:
  • Pre-Roll Ads: Placed at the beginning of an episode, pre-roll ads offer high engagement but shorter exposure, with average CPMs ranging from $15 to $50.
  • Mid-Roll Ads: Inserted mid-episode when listener engagement peaks, mid-roll ads command the highest CPMs, typically between $25 and $100.
  • Post-Roll Ads: Delivered at the end of an episode, post-roll ads are more affordable but have lower engagement, with CPMs averaging $10 to $30.
  • Sponsored Segments: Organically integrated by the host into the episode’s content, sponsored segments build trust and drive action, averaging $50 to $150 CPM

Overall, podcasts and advertising are connected through mass audiences. As podcast favorability continues to grow in the space, advertisers have the opportunity to increase their clients’ engagement with host read spots, target niche audiences, and increase their campaigns reach by being cost effective making podcasts the best choice when wanting to increase their client’s presence. 

Advertisement Types – What’s being leveraged?

Now that we know the overlap between podcasts and advertisers, let’s dive in deeper into what types of advertisements can be leveraged. There’s a multitude of advertising formats that can be utilized such as:

• Live Host-Read Ads: The host delivers a conversational endorsement live during the episode, permanently embedded in the content.
• Pre-Produced Host-Read Ads: The host pre-records an endorsement that can be dynamically inserted and rotated throughout episodes.
• Pre-Produced Voice-Over Ads: A professional voice actor records the ad, which is dynamically inserted into episodes like traditional audio ads.
• Custom Segments: The host integrates a brand message seamlessly into the show’s content, such as a sponsored interview or story.
• Presenting Sponsorships: An advertiser receives multiple host-read mentions and often exclusive branding across an episode or season.
• Branded Podcasts: A company creates its own podcast series to share stories, build brand authority, and engage audiences directly.

Overall, there is a diverse mix of formats that can be leveraged-from live and pre-produced host-read ads to custom segments, presenting sponsorships, and branded podcasts-enabling brands to connect authentically and creatively with engaged audiences. This variety allows advertisers to tailor their approach to campaign goals, while the continued evolution of ad formats and integration strategies ensures podcasts remain a dynamic and effective channel for brand storytelling and audience engagement

What’s next for podcasts? 

As investment levels increase for podcasts, it is estimated that by 2026, U.S. podcast ad spending is expected to surpass $3 billion, accounting for 35% of total digital audio ad spend. We’ll continue to see advertisers focusing on podcasts to reach niche audiences specifically through direct sponsorships and memberships. 

In conclusion, the growing popularity of podcasts in advertising marks a significant transformation in how brands connect with their audiences. By combining authenticity, precise targeting, and high levels of engagement, podcast advertising provides opportunities for businesses across all industries. As 2025 continues, podcasts are solidifying their presence and increasing their reach. We’re excited to see how podcasts continue to revolutionize the media landscape.