4 Ways to Monetize Your Podcast
Podcasts drive revenue in two ways: directly and indirectly. Most of our full-service clients are large brands that understand a podcast’s value as an indirect revenue driver. They know that a podcast will raise brand awareness and/or employee engagement, which will bring in more dollars in the long run.
When someone is already selling a product, service or idea, a podcast is second to none when it comes to building a loyal following, awareness, and support.
But that’s an investment many large brands have the luxury of making. On the other hand, when you’re a small business owner, passionate enthusiast, or a thought leader, immediate revenue spells the difference between being able to make a podcast or not. Which is what leads to the burning question we so often hear: “How can I make my podcast pay for itself or even turn a profit?” In other words, you need your podcast to result in direct revenue in order to justify your investment in it.
Most podcasters think the only way to make money from their podcast is by finding advertisers, but we believe we’re in a new era of monetization that extends beyond the legacy advertising model.
And that’s because the traditional ad model is often not favorable for podcasts with monthly downloads below 10,000 (most of us). In this new era, podcasting is amplified and supported by more inventive sponsorship models.
Which is why we developed a few ways to monetize your podcast that rely on the quality — rather than mere quantity — of your podcast’s audience base. These models form mutually beneficial partnerships and brand alliances to maximize revenue (for you) and returns (for your partners) by making the most of shared audiences, messages, and purposes.
Keep reading FRQNCY’s guide to monetizing your podcast below to see what we mean.
Presenting Sponsors
Ideal for: Social media influencers, authors, thought leaders/consultants, niche podcasters
Description: A presenting sponsor is one entity or brand that covers the production costs for the entire series. In exchange, they get the exclusive rights to be the show’s co-branded sponsor.
Benefit: This partnership is high value for the brand because they’re not competing with any other brands on your show. However, it’s a harder sell because one brand fronts the whole bill — but they essentially get a podcast without having to do any of the work.
Who to pitch: Look at your direct network to find which brands are most closely aligned with your target audience, as that’s who will be most receptive to the message. Make a Venn diagram of the brands most closely associated with your content, those trying to reach your audience, and those with whom you’ve already built a positive relationship. The brands in the middle are the ones you should approach first.
Keep in mind: You can approach this model however you want. So if you prefer not to have an exclusive sponsor, it’s perfectly fine and a great idea to have two or more sponsors who cover the cost of production and the time/effort it takes you to make and market your podcast. For an example of this, listen to The 2X CEO podcast from Launchpad2X.
Split Sponsorships
Ideal for: Nonprofits, social enterprises, political candidates, museums, donation-based organizations
Description: This kind of sponsorship allocates one part of a sponsor donation to an organization’s programming and the other to the organization’s podcast production budget.
For example, you may decide to create $2,000 sponsorship package in which 70% of the funds from each package go to support your nonprofit’s annual food drive, and the remaining 30% support the production of your podcast (which helps to build awareness of and participation in your annual food drive).
Benefit: The brand not only gets to be called a sponsor on the podcast, but they can also be referred to as a wider organizational sponsor. This allows for multiple sponsors to engage in a very effective marketing channel that ends up being a built-in promotion for their brand, all while knowing their funds are supporting an ecosystem of their cause/programming.
Who to pitch: FRQNCY created this sponsorship setup for groups that rely heavily on fundraising, donors, and/or sponsors. Make sure you present your potential sponsors with a development plan that outlines how supporting the podcast will benefit them, as they want to know you’re approaching the podcast with strategy and intention. (If you’re short on time, sign on with us as a full-service client so we can handle that for you.)
Keep in mind: You choose how to set up the packages in a way that best supports your organization’s goals, whether your sponsorship packages allocate donations evenly (50 percent to programming and 50 percent to podcast production) or whether the bulk of your donations go to fund either production or programming. Understanding your target donors’ preferences should influence this decision.
Media Partnerships
Ideal for: Lifestyle bloggers, video bloggers, freelance writers, authors, thought leaders, radio personalities, social media influencers, media companies
Description: A mutually beneficial relationship between your organization and broadcast, digital, or print media.
Benefit: The media outlet doesn’t have to invest in making and running a podcast, but rather can pay you (someone they trust and whose audience aligns with theirs) to do it with their name attached.
Who to pitch: If you already have connections in the radio or publishing industries, it’s a natural sponsor opportunity because you’ve already established your credibility. If you work with FRQNCY (either with a podcast production package or as a full-service partner), you can tout working with the same production company that has produced shows for Coca-Cola, Apple, the Statue of Liberty-Ellis Island Foundation, and others — so sponsors can rest assured it’ll be done right.
Keep in mind: As an added benefit, the media company can include your podcast as part of its advertising portfolio. This helps expand and elevate the value they can provide to advertisers.
Advertisers
Ideal for: Podcasts with over 10,000 downloads per month, celebrities, media personalities, mega influencers
Description: Companies buy 15- to 60-second spots to advertise their brand in your episodes.
Advertisers know that podcast ads get their messages into the ears of a highly targeted and engaged audience. This may be a lucrative option for the few podcasts that have broken into the zeitgeist, but this old-school model is historically not the strongest approach. (We’ve all seen how well this is going for the publishing industry.) Industry-wide rates are $25 for a 60-second ad CPM (cost per thousand), which means you make $25 per 1,000 downloads. If your podcast gets 10,000 downloads per month — numbers obtained by a small percentage of podcasts — that’s $250 per month. If you think about how much work it took to produce your show, is that revenue worth it?
To be clear, we’re not trying to slam anyone who goes this route, but we are trying to enlighten those who are trying to understand monetization for their podcast.
Who to pitch: If you (or your media sponsor) want to include ads, refer to the Venn diagram in the Presenting Sponsors section above. Look for brands who fit into that sweet spot in the middle. Your advertiser should support and see value in your podcast’s mission.
Keep in mind: Consider which ads benefit your listeners the most. The most effective ads serve your listeners’ interests and needs, which means you need to truly understand your audience. If you don’t feel well acquainted with your listeners, our online course will help you feel more in tune with who they are.
Also, host-read ads — when a host records their sponsors’ ads — are more effective than ads that use someone else’s voice. One study found that host-read ads were 3.5 times more efficient from a cost-per-acquisition standpoint.
As you can see, there are several ways to generate direct revenue with your podcast. (Remember: podcasts are extremely effective at driving indirect revenue.)
No matter which approach you choose or what your focus is, we’re excited that you see the value in podcasting and that you’re ready to give your voice a platform.
We’re always here to help, whether that’s via a course that teaches you how to make a podcast, a podcast production package that gives you access to super affordable, high-quality production, or full service podcast production that takes all the hard work off your plate.
Which monetization models or strategies have worked for you? Comment below if you have any tips to add to this list.
Originally published at http://frqncy.media on July 4, 2019.
