Thinking of Buying Podcast Advertising? Here’s a Metric to Watch
Podcast advertising is tremendously effective due to loyal and committed audiences. Largely, this advertising is “live read” by the host whom the audience trusts. Programmatic insertion via platforms such as TAP from Triton Digital is growing at a significant pace (see figure below).
Regardless of your ad-delivery method, live or programmatically-inserted, podcast advertising is based on a CPM associated with total downloads. These rates vary from approximately $12-$45 per thousand with a variety of factors contributing to the range, including: demand, popularity of the program and hyper-targeting.
If, for example, a program has 1 million downloads per month, and you are planning for one “pre-roll” host read ad, is it safe to say you have 1 million impressions? Certainly not everyone that downloads a program is going to listen to the episode, but the good news is that in the podcast world that number is really high. According to Edison Research, 88% of all podcast downloads are listened to within a week of downloading. This download-to-listen ratio is usually factored into CPM at the outset.
So now you have a base rate. The Podcast ad rep is pitching you 1 million downloads of a particular program for a $---x CPM and you know that rate accounts for the 12% of people that may never listen to the program. Beyond the standard considerations such as, “Are these bulk impressions, targeted impressions, hyper-targeted or geo-targeted impressions, etc,“ here are some other considerations when determining “value” of impressions and thereby “setting” the CPM for a buy.
Adjusting the CPM based on Reach (The Unique/Total Download Ratio)
Compare the “unique audience” figure with the “total downloads” of a program or publisher. Here is an example from the September 2017 “Podcast Publisher Rankings” provided by Podtrac of the most popular podcast publishers.
The number in yellow represents the Unique Monthly Audience while the number in white represents the Total Downloads, giving This American Life a unique listener to total download ratio of 25%, whereas How Stuff Works has a ratio of only 12%. Clearly, if one of the goals of your campaign is reach then This American Life would be worth a higher CPM by 12%.
Example: (rates used are not real - example only)
You want to place a buy across all programs for one month. One of your campaign goals is reach.
How Stuff Works: $25 CPM X 38,600 = $965,000
This American Life: $28 CPM X 19,091 = $534,548
Even with a higher CPM, This American Life delivers a far lower “cost per unique person” rate.
How Stuff works Cost Per Unique = $0.22
This American Life Cost Per Unique = $0.12
Among the top 10 podcast publishers, the average unique-persons-to-total-download ratio is 16.2%. Beyond the obvious factors that affect CPM, such as bulk purchasing and targeting, using the unique-persons-to-total-download ratio to guide your CPM and impression value appraisals will certainly improve your success rate for reach-based digital audio campaigns.
