In a recent article, I explored why podcasting is a good option for marketers wanting to expand their reach and improve their audience engagement.
RAJAR, UK’s audio measurement company, released its latest listening figures, showing that 6.5 million people in the UK listen to podcasts in an average week. And whilst this is still only 12% of the adult population, it’s predominantly made up of young, well-educated adults on the upper end of the pay scale.
It’s no wonder then that so many businesses are seeing the potential for podcasts as a revenue stream in themselves. The audience is active, engaged, and relatively well-off.
I’ll explore some of the best ways you can monetise your podcasts, looking at how your small business can start making extra revenue right away.
Sponsorship is the most obvious way of securing an income from your podcast. Advertising space is a sought-after asset, and brands are always on the look-out for spaces to sell their products and services.
There are two ways of selling sponsorship. You can go down the traditional route where you sell direct audio advertising spots. Or you can choose referral sponsorship, which is slightly more informal.
Traditional sponsorship is essentially when you sell a spot, immediately before, in the middle, or immediately after your podcast episode, for brands to sell their products or services.
This advertising spot is filled with an audio promotion of a brand’s product or service, either in the style of a traditional advert or, occasionally, a promotion by the host him or herself.
They’re most frequently sold in a standard rate of CPM or Cost Per Mille (“mille” meaning thousand in Latin). So sponsors pay per thousand people who download your podcast.
However, some sponsors measure rates by CPA or Cost Per Acquisition, and pay for every sale or sign up that happens as a result of your podcast.
Traditional sponsorship is built on a pricing structure that depends at which point during your podcast episode you run the ad. It’s usually more lucrative during a 60-second ad mid-way through your show, and cheaper at the start or end of your episode.
Identifying your target sponsors
First of all, it’s worth noting what sponsors want to achieve from buying a spot from you. Most likely, they’ll be looking to sell their product or service and/or increase their brand awareness.
Start by brainstorming brands which fit into your niche, as well as which brands your listeners might be interested in. Do some keyword research to see what brands pop up. You could also try listening to other podcasts in your industry. Do they have sponsors? If so who are they, and what kind of ads are they hosting?
Working out your price
The industry standard for podcast sponsorship is as follows:
A 15 second pre-roll costs $18 (around £14) per 1000 CPMs (listens).
A 60 second mid-roll costs $25 (around £19) per 1000 CPMs (listens).
A 30 second post-roll costs $10 (around £8) per 1000 CPMs (listens).
So, let’s say you have a regular average listenership of 10,000 per episode, then you’ll receive:
14 x 10 = £140 for a pre-roll sponsorship slot.
19 x 10 = £190 for a mid-roll.
8 x 10 = £80 for a post-roll.
So, the total income for your podcast episode comes to £410. That’s not bad for a total of 1 minute 45 seconds of sponsorship time.
It’s worth noting that this pricing is by no means a blanket structure, and podcasters need to negotiate their own price plan with sponsors.
Deciding on the number of sponsors per episode
By the law of diminishing returns, less is more when it comes to selling sponsorship. Any more than around 2 pre-roll and midroll sponsorship slots will dilute the experience for everyone involved.
Your sponsor’s message will be diluted because the chance of listener action is shared with other sponsors.
Your listener is listening to your podcast because it’s free, on demand and unadulterated by commercials. Podcast sponsorship can be slightly different when you, the podcaster, is promoting a product or service. But the principles remain, to flood your podcast with endless sponsorship ads will lose the trust of your audience.
Lastly, you, the host will lose out too. You began podcasting to provide valuable, high-quality and engaging content for your fans. To dilute your content with sponsored ads will diminish your authority as a content creator, meaning you could lose listeners.
This isn’t to say that all advertising is bad. In fact, most people expect it (76% of consumers take action on audio ads, according to podcast company, Acast). It’s just worth being mindful of getting the balance right, and not cramming your content with messages from brands.
When to bring on sponsors
Finding the right time to source sponsorship takes a bit of maths.
First, you need to work out at what point you think you’re in danger of diluting your podcast. Every sponsored ad will of course dilute your audience to some extent – it could distract your listeners, send them off down a route outside of your podcast, or turn them off altogether. However, by spending time to select the right sponsors and getting a feel for the amount of advertising you should be hosting, you can deliver relevant advertising to your audience that won’t disrupt their listening too much at all.
You also have to decide at what point you’ll be earning enough from sponsorship whilst losing the least amount of listeners. Of course, you can tweak this in time, but it’s good to run some basic numbers before you begin.
Once you know your baseline number, then you’ll be in a better position to negotiate a price point with sponsors.
A well-crafted letter or email is generally the best way to approach a sponsor.
Remember, sponsors are going to want to know why they should pay you money to promote their product or service, so highlight those reasons:
- Include your numbers: How many listeners you have, your rate of growth.
- Detail your audience: Who they are, how they interact with your podcast, why they’d be interested in the sponsor’s product or service.
- Include some social proof: Have you been reviewed? Do you have listener feedback in comments or emails?
Here are some other things sponsors will be looking for in your podcast.
Alternatively, you can try using a company like Midroll, who match podcasters with advertisers. Their online calculator is a useful tool to start gauging how much you could earn by selling sponsorship.
Referral sponsorship is a good way of monetising a relatively new podcast with few listeners. You don’t need a minimum number of podcast listeners to begin, just a product you can recommend to your listeners via a referral link.
Referral ads work by building up a relationship with a brand and then discussing them, or their product or service, within your content. You then include an affiliate link on your podcast page, which sends your listeners to that brand. The sponsor then gives you a commision fee in cash, or in lieu of cash, they send you some free product samples.
Every brand has its own sponsorship structure so you’ll have to negotiate this when you approach them.
One of the benefits of referral sponsorship is that the ad link can remain active for months or years meaning the revenue stream could trickle on for a long time as your listenership grows.
Having sponsorship can also help build your credibility and referral schemes like this can help you to develop your network and place yourself amongst brand influencers.
The first thing to do is to make a list of the brands you’d like to work with. A quick Google of these brands will show you if they have an affiliate programme you could join.
You should choose brands that will complement your own podcast. So if, for example, your podcast is focused on the beauty industry, then you’d approach beauty products; if your podcast is about small business marketing, you’d reach out to start-ups who want to showcase their products.
Next approach your chosen brands in a similar way you would traditional sponsorship, showcasing your podcast and how it will benefit your potential sponsors.
You can also be more creative about your approach to referral sponsorship. You can try interviewing a product creator or brand CEO, talking to someone who’s used the product, conducting a product review on your podcast, or sharing some tips about how to use the product.
The main thing to remember is to include the affiliate link within your podcast blurb, making sure to introduce the brand you’re working with.
Sell your own products or services
Selling your own products or service is, essentially, a way of sponsoring your own podcast, just like the traditional sponsorship we’ve already discussed.
If your brand sells products or services, then selling these through your podcast is an obvious way of making money. It keeps control in your hands, for one thing, and it saves a lot of time in outreach, for another.
There are several tactics you could employ too. Depending on what your goal is (do you want to sell products, courses, event sign-ups, mailing list sign-ups etc.) you could try:
- Announcing free courses your audience might like to try, which then lead to products for them to purchase.
- Sharing paid for opportunities like events or courses with your audience, particularly if they relate to issues discussed in previous podcasts.
- Offering free downloads to someone who opts in and enters their details to your mailing list.
If your goal is to drive more traffic to your website, then you can encourage people to head there. This is most effective when you have a specific landing page or blog article that corresponds to your podcast so that your listeners can go somewhere to find out more about the subject. Some podcasts offer additional content around the subject, such as downloadable assets and extras like photos and videos. Simply sending your listeners to your homepage won’t add much value.
Or, if your podcast goal is to raise your brand awareness then you could take a more subtle approach. Simply by discussing your brand message and values throughout your podcast will encourage your listeners to find out more about you, and maybe even talk about you with their friends and family.
The value of sponsoring yourself is that your audience already knows and likes you; that’s why they’re listening. They’re less likely to feel the intrusion of an ad if it’s by the podcaster him or herself, and are more likely to take an action as a result of it.
Podcasting is a great way of creating valuable, engaging and high-quality content to raise brand awareness, drive traffic to your site, and increase revenue. But podcasting can also be a direct revenue in and of itself.
This article has explored how to make money by way of sponsorship and by selling your own products and services.
The bottom line when you’re considering monetising your podcast is this: Your audience should come first. Sponsorship may not be the thing for you, if you risk losing a large proportion of your fans.
That said, there are means and ways of monetising your podcast without intruding too much on the experience of your listeners.
It might simply be a case of trialing and testing what works best for you and your audience, and going with what your numbers say and what, ultimately, feels right.