Podsights just dropped its Q1 2022 Benchmark Report, and it answers many questions brands may have about podcast advertising. The report pulls data from over 3,500 campaigns, 7.8 billion impressions, close to 900 brands, and $300 million in ad spend. Let’s dig in.
The Proof Is In The Data
When in doubt, look at the data. Our strategy team knows that better than anyone. Here are some of the highlights from the report that we found the most intriguing:
- The average conversion rate for Q1 2022 is 1.42%. There was an uptick in average conversion rates in Q4 2021 compared to Q3 2021. Nonetheless, the conversion rate is still low.
- More brands are advertising on only one network or platform. Based on the data, brands saw up to a 33% improvement in conversions when they diversified their podcast advertising to more than one network.
- Podsights recommends keeping ad frequency between 2-5 ads per episode for optimal performance. For the first time, the recommended ad frequency reached 5. That is quite a lot considering the low conversion rate.
- Mid-roll ads (ads in the middle of a podcast episode) tend to yield higher conversion rates.
- The gambling and professional services industries saw the highest conversion rates for dynamically inserted ads.
- Embedded ads provided high conversion rates for various industries, especially automotive and travel brands.
Measure The Medium
When reviewing the ROI of a podcast, it’s essential to measure the medium accurately based on its purpose as a tool. Podcasts are much more effective at engaging highly targeted audiences than broadly generating direct revenue. The evidence is in the abysmally low conversion rate of podcast ads – currently at 1.42%. And rather than finding new ways to monetize, Podsights’ report is telling us that brands are instead choosing to max out a podcast with as many ads as possible.
And yet, consumers are more skeptical of ads than ever. They (ahem, we) are bombarded daily with sales pitches asking for their time, attention, and dollars, so they have learned to either tune them out, skip them, or find podcasts with fewer (or no) ads.
Podcasts intrinsically foster authentic connections with their audience in a way that’s more intimate than any other medium. They are designed to deliver carefully crafted yet authentic branded messages directly into the ears of their listeners. When you add advertising into the mix, that relationship may shift from an authentic connection to a more transactional one, which could ultimately impact one (or all) of those all-important measures of success we mentioned above: brand affinity, community, and trust.
Optimizing On Options
Simply put, a podcast presents the opportunity for you to share your brand’s mission. Independent podcasters and brands can try implementing ways to build community, ignite a movement, or start a conversation, which will all likely lead to measures of success that go way beyond a 1.42% conversion rate.
For example, comedian Phoebe Robinson doesn’t take any advertising dollars because she uses Black Frasier, a self-invested podcast, as a platform to lift up artists, creators, small businesses, and non-profit organizations that she believes in. She uses the air time that would have been used for ad placements to let her listeners know how they can support these businesses or causes. In return, she has built her brand authentically, opening doors to bigger monetization possibilities than ad placements. Talk about ROI.
Discover more in-depth insight on some of these options in our blog post 4 Ways to Monetize Your Podcast.
Your Brand’s Priorities
Let’s be clear. FRQNCY Media does not condemn podcast advertising. We love an industry that diversifies its revenue streams. We want to help you expand your definition of ROI when it comes to audio. Because the data is showing us that the old, one-size-fits-all way of doing things isn’t well-suited for a medium that offers a nearly infinite way of sharing your story.
After all, why shouldn’t podcast monetization be as innovative and multifaceted as podcasts themselves?
On The Wavelength
Discover our work and listen to the fantastic podcasts we produce. Ride our wavelength for more insightful blog posts by subscribing to our newsletter. If you’re interested in working with us, learn more about our full-service audio strategy and production or get in touch.
FRQNCY Media is the audio production company for Jane Goodall, Diane von Furstenburg, Coca-Cola, and small businesses alike. FRQNCY is a one-in-a-million blend of innovation, passion, and joy. We offer tailored audio production support including integrated services that take (super-skilled) care of content strategy, market research, production, editing, and marketing.