How Do Podcasts Make Money? Digging Into Podcast Advertising

SONY DSC
SONY DSC

Serial’s recent revitalization of podcasts certainly piqued the ears of countless advertisers. Especially with how much premiere placement a select email provider got, even if its name ended up occasionally mispronounced.

538 recently crunched some numbers alongside Marketplace on advertising in podcsts and came up with some interesting numbers.

A few key takeaways from the article:

  • 87% of podcast advertisers were brands that acquire their customers almost exclusively online. Think MailChimp, Squarespace, and other similar type companies.
  • Of the 186 podcast ads that 538 analyzed, only one was produced by an actual ad agency.
  • In order to track podcast advertising success, most will provide listeners with a specific coupon code related to some savings. This type of tracking also allows the companies to track the approximate ROI on their ads.
  • The top companies advertising on podcasts are Squarespace, Stamps.com, Audible, MailChimp and Dollar Shave Club.
  • 38% of podcasts analyzed don’t have any advertising at all.

So where are podcasts trending?

Nobody really has podcasts figured out quite yet. No advertiser has really drilled down the best way to capitalize on listeners’ attention, and even following the massive success of Serial, despite several followup attempts, nobody has quite had the same magic of that standout.

While Serial’s second season will certainly get a lot of attention, many people have expressed an interest in finding other popular podcasts to fill the time between now and then. And while many other great podcasts exist, such as This American Life, TED Radio Hour, The Tim Ferriss Show and more, it feels like there is still opportunity for more players in the space.

As these podcasts tend to specialize in specific topics, it also seems likely that brands looking to advertise to listeners most interested in their products will be able to find a podcast covering a related topic. So the money will likely start flowing more freely as podcasts fill in each category of interest, but how much revenue a podcast can earn might remain an unsolved mystery for a bit longer.

[Photo credit: Rolling Stone, Elise Bergerson]