How to Start Making Money with Your Podcast
OK, it’s probably the question I get most as Head of Content at Omny Studio: when can I quit my 9-to-5 and start earning some sweet dollars from my not-quite-soundproof Podcast garage? Well, I’m here to do my best and answer it.
But before all that, some hard truths…
It’s a Numbers Game Baby!
Just like high school, this is unfortunately a popularity contest. Advertisers spend money to reach people — until you can help them reach a lot of people in one go, or reach specific people they find particularly valuable the cheques you’re clearing won’t be much more than a coffee or a 6-pack. No matter which strategy you pursue of my options below — it generally boils down to a “revenue-per-listener” kind of calculation — the higher the number of listeners, the more money you’re going to get.
If you popped a champagne cork at 100 downloads, you may be a little premature. Keep concentrating on growing your audience and check back later. There was probably a time where even Ira Glass had 100 listeners (it was probably 30 seconds after publishing his first episode). However, if you’re entertaining a large engaged audience consistently with your show, it’s time to kick things up a notch.
Also, the money flowing into the audio on demand space is very small, comparatively speaking. According to the Wall Street Journal- this year in the US, advertisers are expected to spend $36.1million on Podcasts. While this may sound incredible to you currently making content for free, by comparison in 2015 advertisers spent $17.6 billion on radio. This means, if everyone’s crystal balls are accurate and more and more listeners are going to flow into internet audio- then we’ve got a lot more of the pie coming our way.
So, now to the question at hand. How can YOU get money for your Podcast?
Option #1: Direct Listener Support
If you’re brave enough, you can ask your listeners to part with their hard earned cash and give it straight to you instead. This usually takes a few different forms:
- Paywalled content: extra episodes or bits that only paying members can hear.
- Paywalled archive: for example, last 30 days are free, to hear the entire back catalogue- you have to pay.
- Straight out donations: Basically crowdfunding content.
- Merchandise: Buy our wares!
I haven’t heard of any Scrooge McDuck philanthropists just chucking gold at Podcasters, encouraging them to “follow your dreams”. It’s a question of value — is your show good enough to pay for? But hey, if you never ask, you’ll never know.
Platforms that do this:
Omny, Patreon (donations), Libsyn (Paywalled archive), Bandcamp (Paywall), Podbean (crowdfunding), Redbubble (Merchandise)
Bonus Idea
Some Podcasts are toying with the idea of Live Shows that audiences pay to see recorded. That way, the Podcast is for free and you can even hear the live show eventually, but to see it being created in the moment… you need a ticket. Just be wary — ask anyone who has produced a live show and they’ll tell you engaging an audience in a room for an hour is no easy feat. Best to get some performance chops up before you deploy your Podcast in this context. Hecklers can be mean.
Option #2: Programmatic Ads
Progra-wha? A Programmatic ad just means you put a little marker in your Podcast episode where you’re happy for an ad to go — and a computer puts a commercial in there for you. The advertisers book these ads according to a few factors:
- Where your show is downloaded (Geography)
- How much they know about your show (Quality, Topics)
- How many listens your show gets (Impressions)
I’m not going to beat around the bush here — advertising rates are measured in a Cost Per Thousand impressions. It’s called “CPM” in the biz. Programmatic ad-insertion in Podcasting CPM’s are some of the worst rates the advertising industry has ever seen. Anything where the advertisers are not buying a product directly (this includes Facebook ads, YouTube pre-rolls and unfortunately Podcasts), they generally can get these ads for very cheap. However, it is an option — and at scale — if you’re getting $2 per thousand listens — it can eventually generate some coin.
However, there’s a lot of value being taken out before it gets to you — the content maker. For example: advertiser books 30 second spot and gives ad platform dollars — ad platform connects to hosting platform — hosting platform takes out some dollars — ad plays — Podcaster gets what’s left.
Who are the ad-platforms in Podcasting?
Triton and Adswizz are the big 2.
Which hosting services connect with these guys?
Omny, Audioboom, Acast, Art19, Soundcloud, Probably a bunch of others…
I’ll go into why these numbers are so bad another day… For now, I hope my tone is conveying that it’s not a very good option unless you’re getting millions of listens and you just want to generate some revenue without much thought and effort.
The Best Option (#3): Premium Host-Read ads
This, roughly speaking, is a sponsor for your show. You read out a little message of their choosing (and if they’re cool they’ll let you do it in your own inimitable style) and you get paid. Once again, the more people who hear that message, the larger the cheque on offer is. These generally attract a higher CPM, because it’s not AI insertion of 30-second pre-recorded spots — these are a live endorsement, from the host, about the advertiser’s Product or Service, directly to the shows audience.
If this sounds good- the next obvious question is “where can I get these ads to read?” Well, you can either go out and get them, or somebody else gives them to you. In the advertising world these are called DIRECT and AGENCY sales.
A little while ago there were some advertisers that freely let you read their ads on your Podcast, and they paid you every time somebody signed up for their service. Remember those ads like “use the codeword Serial to get a month free Squarespace” or “say Osher to get 10% off your clothing order”? That’s called cost per conversion (CPC or CPA) pricing — and companies felt great about offering money for “referring” paying customers to their services. Often, when a new advertising option presents itself, these type of advertisers move in first. Fortunately, Podcasting advertising has matured enough that these don’t exist much these days. It’s now more of a “we have the ears, so you have to pay to reach them” attitude, which is great for content makers.
Now there’s a problem with every Podcaster knocking on a sponsor’s door asking for advertising dollars DIRECTLY:
PODCAST A: Hey Coke, I have 1000 listeners, want to give me $200 to reach them?
COCA COLA: CPM of $200, sounds good as you do have everyone’s favourite Soft Drink related Podcast!
PODCAST B: Hey Coke, I’ll give you my 1000 listens for $150 if you spend your dollars here instead!
COCA COLA: CPM of $150 bonanza! Hey Podcast A, take a CPM of $120 or I’ll go to Podcast B instead.
PODCAST A: I’ll take it!
PODCAST C: You can have my 10,000 listeners for $100!
COCA COLA: Deal.
Look it’s not Oscar worthy, but you get the drift. Everyone selling their Podcasts directly quickly becomes a “race-to-the bottom”.
What we need is certain influential people to come together and hold out Podcasting as a valuable product for advertisers to buy. This requires time, patience and boring meetings. We know in our heart why it should be valuable: people elect to hear a Podcast (they choose to download it), our listeners are loyal and don’t mind an ad if it means it pays for the product that they love. When it is read in the voice of the trusted host, it can be the most engaging advertising money can buy. In fact, an internal Midroll survey of 300,000 listeners found that 63% bought something they heard advertised on a podcast.
However, there’s a few arguments advertisers can lob back — mainly an industry wide problem of measurement. Just because a Podcast is downloaded, doesn’t mean it was listened to. How we can fix these arguments with better technology is a subject for another article. But believe me, richer deeper analytics on who’s actually listening are the key to getting those CPM’s up.
The agency approach is generally better, and at the moment that push seems to be coming from Podcast networks who want to sell ads across their entire collection of shows.
Who is fighting the good fight?
Omny, Midroll Media, Podmatcher, Podcast One, Slate, Gimlet, Earwolf, Whooshkaa (Australian), Adopter.media
Option #4: Someone pays you to make it
Aaah commissioned content! This is an exciting area to be in. As the “publicity wave” around Podcasting continues to grow- people who usually pay to make audio content (whether it’s a radio station, the government or even brands) are now commissioning Podcasts to be made.
This space is growing now but a few notable examples:
- Panoply works with brands to make Podcasts (i.e. “The Message” which was a Sci-Fi narrative Podcast paid for by General Electric). This space is called “branded entertainment” or “native advertising” and we expect to see much more of it in the coming times.
- ABC Australia has “First Run”, WNYC has the “Podcast Incubator”, Radiotopia has “Podquest” — all radio networks running competitions/commissioning “online first” shows.
- Arts funding can be extended to Podcasting.
- Podcast networks are always looking for new shows that they can represent and monetise.
- Magazines and Newspapers are regularly seen extending their brands into the Podcast space.
The more listeners that join us here, the more chance we have for media companies to commission shows to fill the space. Quality is key — if you’re consistently producing good stuff — someone will find you eventually.
What an exciting time to be alive!
Look, to be honest, I wrote this pretty much off the top of my head. If I’ve missed any companies playing in this space I would love to hear about them (email me! matt@omnystudio.com). I think in the next 1–5 years this space will look completely different to how it does today (prediction: Audible will do something big — maybe a subscription method for a collection of shows we’ve barely seen).
If you’re ready to take your Podcast to the next level, and use a powerful set of tools to do so, check out Omny Studio!
We get that earning an income from your Podcast is what a lot of people want to do, that’s why we’re working hard to build all the tools that Podcasters need to get to the money-making stage.
