Seasonal Programmatic Revenue Expectations

Regardless of your hosting platform and its particular solution, programmatic advertising is an excellent way to supplement the revenue earned from direct deal host-reads. While some podcasters are especially cognizant of their show’s ‘listener experience’ (understandably so) and consequently choose to forego these types of ads, it’s hard to imagine a podcast maximizing its earning potential without at least considering some programmatic opportunities. After all, the overwhelming majority of podcasts – even the most popular shows on the planet – still have some impression avails that go unfilled each month. 

Despite the prospective financial reward of incorporating programmatic advertising, there are still a few things to be aware of when projecting future earnings. This article is intended to fill you in on some of the nuance associated with programmatic ad payouts. 

Unfortunately, podcasters often make the mistake of assuming that monthly programmatic payouts will remain consistent – or even grow -- from month to month. This line of thinking is flawed for a variety of reasons; 1) even the most listened-to podcasts do not always experience linear growth month-over-month (and increased downloads totals are typically the quickest path to higher earning potential), and 2) advertisers/media buyers most certainly do not allocate the same level of spend to each month of the year. Let’s start with the premise that programmatic advertising is just like any other form of advertising, including podcast host reads. Advertisers have a finite budget to spend over a particular period of time, and those budgets will typically be larger at certain points of the year (e.g. most advertisers spend a healthy amount of budget in November/December, as they know consumers are more likely to spend during the lead-up to the Holidays). Let’s also assume that programmatic ads do not exist/run in a vacuum. They, like their host read counterparts, will be affected by outside influences such as economic stagnation (it stands to reason that advertisers do not spend as much during periods of economic downturn, knowing they’re unlikely to see the same type of return from consumers). In terms of month-to-month spend, the following graph illustrates the typical ups and downs of any given calendar year.

*The graph above illustrates the average monthly breakout of programmatic revenue – expressed as a percentage of the yearly total and numbers are an approximation from 2021 to 2023.

A few key callouts to be aware of; December is without question the best month of the year for all forms of advertising, including programmatic. Advertisers want to increase awareness of their product or service, knowing consumers will pounce if the price is right. During this time, programmatic ads afford advertisers a great opportunity to spread their message to a very targeted listener group, based on show genre, demographics and even behavioral categories. Conversely, January is not a high-yielding month for advertising revenue. Advertisers know that consumers will curb their spending dramatically, following a month in which they were purchasing freely for family and friends -- so it stands to reason that they too will pull back on promoting their product or service (with some rare exceptions, like gyms and other fitness related services that tend to boom following the new year). Because of that, programmatic payouts to podcasters will almost always be significantly smaller in January than they were in December. Even if your show continues to grow its audience/downloads – which is obviously a great trend in the long run – it will still likely see a downturn in programmatic revenue from December to January. The graph above also illustrates some of the less dramatic ups and downs seen from month-to-month that podcasters should be aware of. And remember; every year is different. While network reps do their best to provide accurate revenue forecasts, it’s impossible to know what your payout will be with 100% certainty until the final numbers have been tabulated each month.

Other Factors Affecting Payouts

• CPM: the average CPM of your payouts will rise and fall based on a variety of factors. Obviously the goal of all programmatic ad providers is to secure the highest CPM possible for their shows. That said, economic factors, advertiser budget and basic supply-and-demand will contribute to what the advertiser ultimately pays for their campaign (and your inventory). Some months may produce a high volume of ads at a lower CPM, while others will do smaller volume but at a higher CPM. Consequently, your payout could actually be comparable in both scenarios.

• Fill Rate: This term simply refers to the number of dynamic ad breaks that were filled relative to the overall number of avails. As an example, let’s assume your podcast places four dynamic ad markers per episode, and over the course of one month, you saw 20,000 unique downloads. Hypothetically, that would indicate 80,000 possible opportunities to serve a dynamic ad, however, we must remember to account for listener drop-off, skipped ads, downloads that have yet to be listened to, etc. So let’s assume the number of possible opportunities for an ad to be served is closer to 60,000. Of those 60,000 opportunities, perhaps 35,000 impressions were actually served/consumed, equating to a 58% fill rate (60/35). Your fill rate can and will vary from month to month, based on a variety of factors. While you want the highest possible fill rate, keep in mind that an ad served at a lower CPM is still better than no CPM at all (i.e. letting the ad slot go unused). As such, higher fill rates typically help you maximize your revenue potential.

• Category Restrictions: With most programmatic marketplaces, you have the option to opt in or out of several advertiser categories. While it’s completely understandable as to why a show would block certain categories, it also stands to reason that the fewer restrictions you have in place, the more likely you are to see a higher fill rate. As an example, let’s assume ABC Beer Company has purchased a programmatic ad campaign in May, as they ramp up their ad spend for the summer months -- which tend to produce higher revenue for that industry. If your show blocks ads tied to alcoholic products – a common practice for shows in certain genres – you would obviously miss out on any potential impressions coming from this campaign.

In closing, programmatic revenue can be affected by a variety of factors, but often follows a somewhat predictable trend, month-over-month and year-over-year. While we encourage you to consult those trends, be advised that nothing is guaranteed due to the number of variables at work.