Picture this: You and your best friend are chatting over drinks after work. For the past 2 hours, you’ve been analyzing the latest movie from your favorite franchise. The theories are so good! The conversation is so fun! And you say, “Other people should be hearing this! We should be sharing our ideas with the world.”
Your friend says, without missing a beat, “We should start a podcast…”
Fast forward 5 years.
This past December, Amanda McLoughlin the Founder and CEO of Multitude Collective, a New York City podcast collective, was named Forbes 30 Under 30 for the impact she has had on the podcasting world.
She launched her own show with her best friend, Julia Schifini, while she worked at a big finance company. Eventually, she left the job to do podcasting full time, and has helped several other shows to grow and monetize along the way.
So, how does a Forbes 30 Under 30 Podcasting CEO grow and monetize a podcast?
Step One: Build an Infrastructure for Listener Support
The journey towards monetization can start before you record your first episode.
Amanda and her cohost started a Patreon account to build an infrastructure for audience support before their show, Spirits, even launched.
“The fact that people think they have to wait until they’ve earned an audience or earned a right to ask for money, I get where they’re coming from,” Amanda says. “You shouldn’t stand in your own way if [your audience wants] to express that with financial contribution.”
The best part about Patreon is that you can integrate the rewards into your existing workflow. For example, Amanda’s show would publish their notes and bloopers, which didn’t require a ton of extra steps outside of her usual process.
If your podcast is meant to support a business, then a Patreon isn’t necessary – but you do want to have some way for your listeners to become customers from the very beginning. That can be in the form of a lead magnet, booking a time for a discovery call, or purchasing your product or service.
If this sounds like you, then setting up an infrastructure should be in the form of a really clear and easy call to action that leads your listeners to your shop or website.
Once you have the infrastructure in place for your listeners to support you if they want to, the next step is to start thinking about brand partnerships.
Step Two: Land Cost Per Acquisition (CPA) Sponsorships
As your podcast grows, you can start to think about finding businesses to sponsor you. A great way to go about this is through Cost Per Acquisition (CPA) marketing.
CPA is the amount of money that a sponsor will pay to get one sale or one sign up. CPA deals are also sometimes referred to as affiliate sponsorships or CAC (Cost to Acquire a Customer).
Pro Tip: Define your audience as specifically as possible in order to make yourself more attractive to potential sponsors.
Let’s say your podcast is a show that shares stories about motherhood, and your audience is made up of first-time moms. You reach out to a company that makes adorable baby bibs, and you make a deal! Here’s how the sponsorship will go down:
- They’ll give you an ad to read that includes a special discount code or link just for your listeners.
- Your loyal listeners, who trust your opinion, will go to the advertiser’s website and purchase bibs using your code.
- The bib company reports back and tells you how many bibs your viewers bought.
- You get paid a percentage of each sale the company made from someone who used your code.
The best part about CPA sponsorships is that there’s no minimum audience requirement. That means that you can start earning money from sponsorships.
“For businesses, it doesn’t matter if they advertise to one person and then one person bought [their product], or they advertise to one hundred thousand people and one person bought it,” Amanda says. “They still have a cost per purchase that they’re looking for.”
So, you have affiliate deals and your audience loves them. At the same time, your listenership has been growing and you’re looking for additional, consistent ways to earn.
Now, you’re ready for CPM deals.
Step Three: Explore Cost Per Mil (CPM) Sponsorships
CPM means Cost Per Mil, which is one thousand in Latin.
CPM sponsorships are very straightforward: Advertisers pay a certain amount of money per thousand downloads of your podcast.
The average price that sponsors pay for this type ad is $25 per thousand downloads, though if you serve a demographic that has a notorious amount of disposable income, or you have an especially loyal audience as Amanda does, you might be able to ask for more than that.
What makes CPM attractive is that the income is fixed. It doesn’t rely on your audience to make a purchase or visit a certain website. All they have to do is listen to your podcast, and you get paid. However, because CPM sponsorships are measured per thousand downloads, they usually aren’t worth it for newer podcasters who are still growing their listenership.
Which Form of Monetization is Best?
The podcasting industry loves to think of CPM ads as the end goal of monetization and the best way to make money. Here at Grow the Show, however, we don’t believe there is only one “best way” to build your podcast. CPM might end up being perfect for you, but it’s important to remember there’s more than one avenue to reach your financial goals.
If you’re somebody who still believes you need 10,000 downloads per episode to make any money on a podcast, this is going to blow your mind. We’re going to have to do a little math though, so stick with me.
Grow The Show Accelerator student John Strohmeyer hosts “5 Star Counsel,” a show for Lawyers who own legal practices.
According to Google Ad Words, the average CPA in the legal industry is $120. Meaning, a business that sells products to lawyers is willing to pay on average $120 to get one new customer. For demonstration purposes, let’s say that 5 Star Counsel has a modest audience of 500 listeners, or 500 lawyers (I just made up this number).
With the average $25 for every 1,000 downloads CPM rate, John’s show could make $13 per episode. But, what if John did a CPA deal?
Knowing that the average CPA in the legal industry is $120, John could approach a business that serves law firms and say, “Hey, your CPA is $120, why don’t we run a CPA ad on my show, and you give me $100 per customer?”
The business is going to be thrilled! They save $20 on the acquisition of those customers, AND there’s no risk for them! They don’t pay unless they get customers! So, John runs the ad on his show.
Of his 500 listeners, 1%, or 5 of them, become customers of John’s sponsor, which means John just made $500 off of 500 downloads.
If John listened to standard industry knowledge and pursued a CPM deal, he would need to hit 20,000. downloads to make the same amount of money.
In Conclusion…
You do not need 10,000 listeners to monetize your podcast, but you will not reach 10,000 listeners unless you monetize because the show needs to pay for itself to grow. It will not become a thriving business off of your passion alone. You need to start now, and with a good strategy.
As you embark on your monetization journey, remember that above all else, successful podcasting is all about what works best for you. Don’t be afraid to break industry norms and try brand new ideas!
Listen to my full interview with Amanda McLoughlin to learn all of her tips and tricks, including how to barter with businesses and how to pitch your podcast to potential sponsors.
Resources Mentioned:
Multitudes’ Free Resources and Templates for Podcasters
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