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Almost 8 in 10 podcast listeners ages 18-49 don’t mind ads or sponsors in podcasts they listen to regularly, as they know they support the podcast, per results from a Nielsen study [download page]. Roughly three-quarters also feel that that the sponsors fit well with the content of the show, per the survey. Moreover, fully 83% agree that the host is authentic and natural in delivery the ads.

Host-Read Ads Perform Best

As part of its study, Nielsen divided its 7,000 podcast listener respondents into two groups: one that listened to a 10-minute podcast clip (including ads), and one that watched a comparison video experience that included pre-roll advertising. It then conducted a post survey to measure lift across brand measures.

The results indicate that more than two-thirds exposed to the podcast ads agreed that the ad experienced made them aware of new products and services. More than 6 in 10 agreed that the ad made them consider new products and services, and 62% likewise recalled the brand advertised in the podcast.

All told, a majority (57%) of the 46 podcast ads tested – or 26 – outperformed the pre-roll video ad.

What’s interesting is that the podcast ads that were host-read (which constituted the majority of those tested) were significantly more likely to be described by respondents as authentic and believable, and less likely to be felt as forced.

A separate study confirms that host-read ads outperform dynamically inserted ads (pre-recorded), at least for direct response measures.

Ad Results Media examined a sample of its largest clients in Q3 2017 that bought both baked-in (host-read) and dynamically inserted ads, finding that on average, baked-in ads were 3.5 times more efficient from a cost-per-acquisition standpoint.

Ad Results Media notes that despite some disadvantages to baked-in ads, “an authentic-sounding ad that lives forever in content is very powerful from a direct response perspective.”

In a sense, podcasts follow radio in this regard, in benefitting from authenticity and listener relationships with hosts. Research indicates that one of the key reasons that radio listeners tune in is due to liking particular DJs, shows, or hosts.

Previous research has found podcast audiences receptive to advertising: last year, the IAB reported that almost two-thirds of adult podcast listeners in the US claim to be more willing to consider products and services after they learn about them on podcasts. Also in that study, a slight majority (52%) agreed that they believe that the hosts of podcasts they regularly listen to are actual users of the products and services mentioned on their programs. And respondents were more likely to respond positively to mentions of products and services discussed by hosts (55%) than to pre-recorded ads from a brand, company or sponsor (34%).

In response, marketers and agencies have been warming to the idea of advertising in podcasts. Podcast advertising spending grew by 72% year-over-year in 2016 to reach $119 million, and is expected to grow by another 85% this year to hit $220 million, according to a report released earlier this year by the IAB and PwC.

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