The State of Podcast Advertising: CPMs Are Dropping, But Engagement Is Rising

The podcast advertising market is sending mixed signals. On one hand, the IAB's annual podcast advertising revenue reports have consistently shown the industry generating billions annually and growing year-over-year. On the other hand, creators who have been in the game for five or more years will tell you that the CPM rates they can command for host-read ads have softened from their 2021 peaks. Both things are true simultaneously.

The explanation is straightforward: supply has grown faster than demand. Millions of new podcasts have launched since 2020, adding enormous inventory to the market. When there's more ad space than advertiser dollars to fill it, prices fall. The shows feeling this most acutely are mid-tier shows that relied on programmatic advertising, the automated, algorithm-placed ads that pay by the impression. Programmatic podcast CPMs have declined sharply.

Host-read ads, however, tell a different story. When a trusted host reads an ad in their own voice and from personal experience, recall and conversion rates remain consistently strong, often dramatically outperforming digital display and social video advertising. This is the data point that keeps sophisticated brands in the podcast space even as they pull back on programmatic buys. The relationship between a podcast host and their audience is genuinely different from any other media relationship.

For independent creators, the takeaway is to lean into what makes podcasting uniquely valuable: authentic host-brand relationships. Pitch to brands you actually use or believe in, offer live reads rather than pre-produced spots, and show potential sponsors your completion rates and listener demographics rather than just raw download numbers. In a softening CPM environment, the quality of your audience relationship is your most defensible asset.