When a listener requests an episode of any podcast hosted on Megaphone the Megaphone Ad-server looks at the IP address and User agent string of the listener to determine the most appropriate "ad load" to insert into the episode. At a high level the delivery waterfall of advertisements is as follows:
Spotify Audience Network Ads
VAST (if enabled)
Direct-Sold Ads are created in the Campaigns Library and have their own set of priorities (1 to 10) that can influence whether or not an "Order" gets inserted.
Spotify Audience Network Ads are sold by the Megaphone Ad Ops team. Only podcasts that have explicitly opted-into the Spotify Audience Network (this requires a contract addendum) will have Spotify Audience Network ads inserted into their shows.
VAST Ads are tags that connect to a third-party ad server and deliver creative into your podcasts. Read more here.
Promos are similar to Orders in the Campaign Library but are designed for in-house, unpaid advertisements that are only inserted if no Direct-Sold or MTM Ads are available.