So, you’ve launched your podcast, and you’re starting to see some growth in your monthly listens, downloads, and subscribers. At some point, you should start considering getting a sponsor on board. 

Plenty of popular podcasts in the industry rely on brand sponsorships to generate income from their work. To your listenership, it can be a sign of growth. The trouble is figuring out how much to charge sponsors and how to strategize ad placements.

In this guide, we’ll cover different advertising types you can have on your podcast and the range of rates you can charge your sponsors.

Table of contents:

• The standard cost for podcast ads
• Types of podcast ads
• Average ad rates for podcasts
• Variables in podcast ad rates
• Is podcast advertising effective? 

The standard cost for podcast ads

According to AdvertiseCast, the average podcast CPM (cost per mille, a.k.a. per thousand listens) for 30-second ads is $18, and $25 for 60-second ads. But you’ll need to adjust this average depending on the type of ad you’re providing, along with your audience size and level of engagement.

Types of podcast ads

If you’re an avid podcast listener, you’ll notice that your favorite podcasts often have ad spots in different places, along with a varying ad length. Length and placement dictate how much ads cost, since longer ads in places where listeners are likely to still be listening are worth more to advertisers than shorter ads where listeners may have already dropped off. 

Here’s a rundown of the various ad opportunities you can offer on your podcast:

Pre-roll ads

These ads play within the first 10% of the podcast episode’s runtime. They’re usually about 30 seconds but can be shorter or longer.

Mid-roll ads

These ads play in the middle of a podcast episode and are typically about 60 seconds long — prime time. Depending on episode length, some podcasts have multiple mid-roll ad spots.

Post-roll ads

Ads at the end of an episode are called post-roll ads and are usually around 30 seconds long. As you might guess, these ads aren’t always the most desirable, because listeners often drop out before the end of an episode. Still, those who do listen to the end are usually the most engaged audiences, which are usually more likely to buy from that sponsor.

Paid interview

Brands will pay a hefty premium for this content since it can take up a whole episode. Brands pay podcast hosts to interview someone related to (or working for) the brand. It’s an excellent option for both brands and creators since brands get more opportunities to build awareness and trust, while the creator doesn’t need to source a guest or come up with an episode topic — just craft unique interview questions.

Product placements

A simple type of ad, particularly if your podcast is also visual (if you’re optimizing your podcast for YouTube, for example). You can charge to either have a brand’s product in the shot or briefly mention them during the episode.

Dynamically inserted ads

Dynamic ads are recorded separately from the episode and put in later via the podcast hosting platform. The advantage of these ads for creators is that you can put them anywhere in any episode and replace them with new sponsorships later.

Baked-in ads

These ads are the opposite of dynamic ads because they’re recorded or “baked in” to the original episode. That usually means that they’ll remain there as long as the episode is available for download, which could be years. Naturally, this is a better option for brands, and they’ll pay more for this option.

Sponsored content

Podcast sponsorship differs slightly from sponsored content (confusing, I know). But sponsored content means a brand has paid the podcast creators to talk about a topic related to them (but doesn’t mean the host have to promote the brand), and that the hosts will need to mention that the brand sponsors the content.

Host-read ads vs. announcer-read ads

On top of the length, type, and location of a podcast ad, there’s the element of who reads the ad. Host-read ads are read by the podcast host, and are generally seen by listeners as more believable and authentic than announcer-read ads, which are read by a voice actor hired by the brand or marketing agency. 

Any of these ads may also use a direct-response approach, where the ad includes a promo code listeners can use when they buy — and that advertisers can track to determine the effectiveness of their podcast ad. 

Whatever ad style and placement you use, you’re bound to make some sort of advertising revenue — but how much? Check out the average rates below.

Average ad rates for podcasts

The market for podcast advertising is growing. The Interactive Advertising Bureau (IAB) reported that despite a struggling economy and pullbacks on ad spend, podcast ad revenues grew 26% year over year to $1.8 billion in 2022 and are expected to double by 2025. 

That means you can be comfortable charging a fair rate for access to your podcast audience — brands are willing to pay for it. So let’s look at average rates specific to the type of ad. Given mid-roll ads are generally considered the most premium spot, we can use them to calculate the rates for other types of ads. (Remember, CPM stands for “cost per mille,” or cost per 1,000 listens). 

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These figures are a suggestion based on the average CPM rates for 30- and 60-second ads and the desirability of ad placements. Individual experience varies: some Redditors reported getting CPMs of up to $29 (with a 50/50 split toward their advertising network fees for choosing dynamically inserted ads). 

While CPMs are one of the most common ways to monetize a podcast, there are other approaches. You can also try something like affiliate marketing and give a CPA (cost per acquisition) rate or even a fixed rate per episode.

Variables in podcast ad rates

Your podcast sponsorship pricing should be based on several factors unique to your show, which will give you some wiggle room on the average podcast advertising costs above. Here are some of those factors:

• Audience size. The most significant variable factor for your rates is your audience size. A bigger audience equals higher rates (in most cases). But this also depends on the brand’s target audience: if you have a smaller audience, you may be able to compensate for that if they’re niche or specialized in a way that makes them a more desirable audience for that advertiser (for example, a company selling scrubs may prefer a small audience of listeners in the medical field over a large audience of mostly office workers).
• Audience demographics. It may not come as a surprise, but podcasts with an audience in the West (U.S. and U.K., for example) generally command higher CPMs than those in other countries. If your audience is primarily U.S.-based (or in any location that makes them the right audience for the sponsor), you can factor that into your pricing.
• Your niche. A general bodybuilding podcast will have a lot of competition and a relatively broad audience of people interested in fitness. Compare that to luxury watch collecting, which would have a much smaller, specific audience. There’s nothing wrong with a broad niche, but a specialized niche audience can command higher prices.
• How many ads you include. If your episodes are pretty short, it makes sense to have one or two ads. That’s good for brands because it means they don’t need to compete for attention with other sponsors — and they’ll pay a premium for the privilege. Longer podcasts (e.g., one hour or longer) can fit as many as four or five ads and will likely charge a little less because of the competing attention.
• Your overhead costs. You may need to charge a little more to cover the costs of your time and labor, your equipment, licensing fees on music for your podcast, and any paid advertising you use to promote and grow your podcast.

It’s worth remembering that your audience isn’t usually limited to your podcast listeners. Chances are you also have some presence on social media to help promote your podcast and maybe even a newsletter audience. Factor these platforms into your audience size.

Is podcast advertising effective?

For podcast creators, monetizing via advertising is the most popular way to build revenue from your podcast. It can also be pretty easy: dynamically inserted ads (also known as programmatic ads) are simple to add to your back catalog to ramp up your revenue from day one.

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If you’re worried about ads ruining the flow of your podcast for your listeners, don’t be. 

Listeners are used to them, and according to some academic findings in December 2022, podcast listeners have positive attitudes toward podcast ads. In particular, they favor host-read ads, and they often enjoy buying products they hear about on podcasts.

But be considerate — you don’t want to stuff a 20-minute episode with three 60-second ads, for example. This would be great brand awareness for your advertisers but a terrible listening experience for your audience.

We also published a whole article on podcasting by the numbers detailing some astounding statistics from the podcasting industry. One of the most interesting ones was that podcasts were more effective at eliciting purchase intent from potential customers than other forms of media, according to 58% of respondents in the Sonic Boom WARC study.

Not only that, but the WARC study also stated that digital audio’s average engagement levels are 14% higher than TV, 18% higher than social media, and 23% higher than terrestrial radio — great metrics for potential podcast advertising campaigns.

All this data shows that not only is podcast advertising effective, but it’s just as (if not more) effective compared to other methods of advertising and generating revenue for creators. 

Feel confident charging sponsors for ads on your podcast 

Charging fairly for your worth can feel intimidating for many people, but knowing how much the average podcast charges and the variable factors for podcast advertising should help you grow more confident in setting your prices.

Of course, growing your show into a chart-topping podcast series with serious ad revenue takes a lot of time, effort, and, in most cases, luck. An app like Descript can help you streamline your podcast workflow and save time you can spend on finding higher-paying sponsors — while making an engaging, professional, brand-attractive podcast in the process.