This really addresses my question directly. Thank you. It makes a lot of sense.

I wonder if this ad insertion happens for downloading directly from RSS feeds as well. Typically, there is a link in the RSS feed directly to an .mp3 file, and I don't know if it would be possible to set the RSS link to a URL which would custom "build" a new mp3 for each download with dynamic ads injected. Is it just the case that some podcasts do not have "public" RSS feeds? I don't know if i've come across any...