How Podcast Networks Charge a $250 CPM For Advertising Products People Cannot Buy

Any given week, my phone automatically downloads an average 30 podcast episodes. I am an aspirational subscriber, which means I subscribe to more that I can listen. In fact, I listen to an average of 6 episodes per week. Let’s pause here for a second and insist on one of the main issues with podcasting:

“Downloads” does not mean “listens”

In my case, downloads = 5*listens. Four out of five podcasts I download are never listened to. This would not be very important if downloads were not the metric used to sell ads. When a podcast network sell ads, they price them per thousand downloads, and they charge a healthy 25 to 100 bucks for those thousand downloads. That cost per thousand downloads is called a CPM

I am going to assume that brands want people to listen to those ads, and not just download them to have them deleted. This means that in my case, brands are paying 5 times the amount they think they are paying. If we assume a CPM of $50, the real CPM these brands are paying to reach people like me is actually 250$. Now let’s add the second problematic issue:

You cannot target podcasting ads

One of the advertisers on Gimlet Media’s Startup is Hiscox Insurance, a company whose products cannot be bought in Europe. Since podcasting is a technology designed to download stuff to your iPod back in 2004, the ads cannot be targeted according to geography or demographics, not even by continent. For every thousand people like me, listeners of podcasts outside the US, the good folks at Hiscox just wasted 250 bucks.

Think about what 250 bucks can buy you on Facebook. You can get 500 clicks to your website from a demography you can tune with a great degree of precision. Am I the only one who thinks this podcasting ad business model is doomed?

Thanks for reading,


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