There are two types of sponge filters: the ones that stick on the side of your aquarium via a suction cup and the ones that stand alone in your tank. Both have a little nozzle that the airline needs to connect to. It sounds like you're using the one that sticks on the side when you mention the periscope, if so, that is where the air bubbles will escape from. There should be a small nozzle near that that you hook the airline on to.
The above shows a stand-alone sponge filter but this layout is the exact same for ones that stick on the side of the aquarium, too. Your air pump is connected via airline to a gang valve that controls the air output of the filter (these often come with the air pump but sometimes have to be purchased seperately), the gang valve is then connected to the sponge filter via more airline. If you want, you can install a non-return valve before the gang valve to stop water backtracking down the pipe and into the air pump. Non-return valves are usually dirt cheap and are highly recommended.