2023 Started Off with Improved Podcast Ad Performance

May 30, 2023

Podcast ads’ average conversion rate grew on a year-over-year basis during the first quarter of this year, and lead conversion rates from attributed visitors also climbed, according to the latest quarterly report [download page] from Podsights.

This is good news for an industry for which advertisers lack confidence in the effectiveness of their spend relative to other channels.

The report shows that the average conversion rate for site visitors (measured as visitors ÷ household reach) was 1.21% during Q1. Though this trailed the rates set in the second half of 2022 (both exceeding 1.3%), it was an improvement from the year-earlier period (1.1% in Q1 2022).

The improved result may relate to better ad frequency, which measures the number of times a household was exposed to an ad. Podsights recommends that advertisers keep frequency between 2-5 for the best results, and in Q1 the figure stood at 4.55. That was down from almost 5 in Q4, and a much higher 6.32 in the year-earlier period of Q1 2022. The analysts note that a decline in frequency has the effect of “improving the listener experience and driving better performing campaigns overall.”

The purchase conversion rate (measured as purchases ÷ reach) for podcast ads was one of the only metrics to not improve in Q1. At 0.043%, it was within the 0.037-0.045% range set in the previous 4 quarters, though it trailed the Q1 2022 mark (0.045%). Still, the average purchase conversion rate from attributed visitors (measured as purchases ÷ visitors) did grow. At 5.35% in Q1, it was up for the third consecutive quarter, and also outperformed the year-earlier rate (5.29%).

Meanwhile, the lead conversion rate (the number of sign-ups or email captures ÷ reach) was unchanged on a quarter-over-quarter basis at 0.1%, though that marked a year-over-year improvement (from 0.08%). The lead conversion rate from attributed visitors rose for the third consecutive quarter to 14.41%, well above the year-earlier rate of 12.13%.

Finally, install conversion rates (installs ÷ reach) – which refers to mobile app installs – jumped to 0.23%, far outperforming the previous quarter (0.16%) and year-earlier rate (0.15%). The analysts argue that the rate signals that “podcasts can effectively drive app downloads.”

In other highlights from the report:

  • Pre-roll ads, which have grown in popularity among advertisers, continued to have higher conversion rates (1.24%) than mid-roll (0.99%) ads.
  • The Gambling (2.44%) and Parenting (2.35%) verticals had the highest average conversion rates in Q1.
  • The Education (0.07%) and Beauty (0.06%) verticals had the highest purchase conversion rates.
  • The Pharma vertical enjoyed the highest purchase conversion rate from attributed visitors (8.01%).
  • The Education vertical rose to the top in lead conversion rate (0.15%), though Pharma was way ahead of the pack in average lead conversion rate from attributed visitors (14.41%).
  • The Financial Services and Arts, Entertainment and Media verticals shared the highest average install conversion rate (0.27%).

For more, download the benchmarks here.

About the Data: The results are based on an analysis of 10 billion impressions across 4.5K campaigns, 1K brands, and $790 million in ad spend from Q2 2022 through Q1 2023.

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