Alright, so I want to talk about something that bothers me when talking with other podcasters, reading podcasting forums, and seeing advice given out around monetization. It revolves around getting sponsorships for your show.
I’ll just be blunt: I think sponsorships are the worst strategy of podcast monetization.
Now I’m not exactly sure why getting a sponsor seems to have climbed to near the top of the wishlist of many new podcasters above other easier, more effective, and more profitable monetization models. My best guess, however, is that it has to do with the very nature of ads.
They’re loud, obvious, unavoidable, and to some people, annoying. Simply put, they can’t be missed.
What’s more, the podcasts we hear ads on are for the most part big shows with thousands upon thousands of listeners. It’s easy to get the message that sponsorships are inherent to podcast success.*
* [Spoilers] They’re not…
I have a ton of issues with this whole illusion however, and after I’ve had some time to vent about why I think chasing sponsors is a waste of time (at least at the start), we’re going to go over some better, easier options that you can actually start on for your next episode.
Why Sponsorships Aren’t Worth Your Effort
I have a client who has a podcast that averages between 500-750 downloads per episode. Solid, but not spectacular, right? I’m sure many of you are getting the same or greater downloads for your show.
They’ve been putting out their episodes consistently now for about 9 months, but it was only 6 months in that they did their first big product launch (it happened to be a high-value course).
That launch as it turns out, was a 6-figure launch.
Just as a thought experiment, let’s assume that they made exactly $100,000 off of that course launch 6 months into their podcast with let’s say, 625 consistent listeners.
Now let’s look at the number of listeners they would have needed to make the exact same amount of money through sponsorships over a 6 month period.
We’re going to use the industry standard rate of $25/thousand listeners for a 60-second midroll ad*
* I have ALL kinds of issues with these supposed “industry standard” prices that everyone quotes as fact, but let’s finish our thought experiment first.
Now they release on a weekly schedule, so in that six month period, they released 26 episodes.
When you do the math, it turns out that to make that same $100,000 over those 26 episodes purely through sponsorships, they would have needed to average almost 154,000 listeners per episode. That’s 246x the size of the audience they had…
I’ll also mention that they were starting with pretty much zero audience, and podcasting is their primary source of content creation. They DID however have affiliate partnerships, run some serious FB ads, have a small but active FB group where they do webinars and Q&As. But really, you should be doing or at least looking into all of those things to some extent regardless of how you’re looking to monetize your podcast.
Interesting story huh?
Let’s look at a few more reasons why securing sponsorships should not be at the top of your list of podcast goals.
- You need a minimum audience size to attract interest from sponsors.
Now I don’t completely buy into this, but there is some basis of truth here.
There’s this persistent myth that your show needs to have 1000 listeners per episode before you start approaching sponsors. I don’t know where this comes from but it’s complete bullshit. I know many podcasters who have got sponsorships with well under 1000 listeners, and others who struggle to get sponsorships even with audiences of 2 or 3 thousand listeners!
The thing is, if you have a 200 person audience, it might be possible to get a sponsor, especially if your show is extremely targeted, but it won’t be easy. Many shows never get to a point to attract mainstream sponsor interest, but that doesn’t mean they’re not possible to monetize (and in a BIG way) by other means.
Even if your show does grow to a point that it attracts sponsors (let’s call that x-number of listeners). It might take you a year or two to grow to x-number of listeners. Wouldn’t it be great to be monetizing your show during the entire stretch leading up to that time?
Yes. The answer is yes, it would.
- You’re not in control of the revenue stream.
This is one of my biggest problems with sponsorships, that you are not the one ultimately in control of that source of income. The company who is sponsoring you now could choose to end the agreement and you might not be able to find a replacement.
This could happen for any number of reasons, but the result is the same, you’re now back to square one.
- The return for the audience size is not worth itAs demonstrated in the story above, chances are, if you have an audience that’s large enough to attract sponsors, you could be making a whole lot more money through different monetization strategies.
Sure, other strategies might initially sound like they require a lot of upfront work to get things set up, but most people who don’t have a sponsor underestimate how much work goes into communicating with sponsors and potential sponsors, reporting stats, etc.
- You need a minimum audience size to attract interest from sponsors.
I’ve got plenty more reasons why I feel like sponsors are not worth the effort when you’re starting out, but these are the three biggies.
Thanks for letting me get that off my chest. I’m feeling a whole lot better and I’m actually ready to say something nice about sponsorships now 🙂
Sponsorships: It’s Not All Bad News
Ok, so I know I’ve said a lot of negative things about sponsorships, and you’re probably thinking that podcast sponsors killed my father or something and that I’m now on an epic quest to bring them all down and exact revenge.
It’s not like that at all.
I think getting a sponsor for your podcast is great. I mean it’s pretty much free money, right??*
* Wait a minute, who is this guy…
The problem is that I see way too many podcasters who seem to feel that sponsorships are the only or best way to monetize their shows, and that just aint true.
I think sponsorships are really great when used in accompaniment with various other monetization strategies that are in your control, that you can start with immediately upon launching, and which have the ability to make vastly more money per listener.
If you look at many of the biggest shows out there, it may not be obvious (as the ads are the noisy bit that’s meant to stick out), but they’re using many strategies besides sponsors to make their shows profitable.
So let’s look at some of those other strategies, shall we?
Non-Sponsorship Methods of Monetizing your Podcast
If you’re not aware of what affiliate marketing is, it’s basically where you promote somebody else’s product or service, and for every one of your listeners that signs up (often by clicking a link or using a promo code you mention on the show), you make a percentage of that sale. Depending on what you’re promoting, those commissions can range from the single-digit percent range all the way up to a whopping 75%!!!
These can often sound like ads, but the difference is that the podcaster is paid a percentage of each sale, rather than a rate based on the number of listeners (none of whom might actually buy the product, or maybe all of whom buy the product, either way the price is the same).
The big advantage of affiliate marketing is that there are a ton of companies with affiliate programs, and many of them you can simply sign up for, meaning you can start recommending highly targeted products or services to your listeners from episode 1!
You can also include links to the products for which you’re an affiliate in your show notes and email newsletters, further increasing your chances of making affiliate sales.
Pat Flynn is one of the masters of affiliate marketing, and you should definitely check out his strategies!
Self Sponsoring Your Own Products or Services
Ok, so this, in my opinion, is the very best way to monetize a podcast, although be warned, it’s not necessarily the easiest.
The idea is to treat products or services that you offer as a sponsor to the show. You could take a break at the start/middle/end of the show and give a quick spiel about something you’re offering and why your audience would benefit from it.
While you first have to create the product or service offering, there are some reeeeaaally great upsides to self-sponsorship.
- You own the product or service and take home 100% of the profit. It is reliable and consistent and while one offering might fade in appeal, you can (and should) always come up with a new offering.
- You can (and should) tailor this offering specifically to your audience right from it’s inception, making it highly targeted and increasing your conversion rate.
- Selling your own products or services is probably the best way to make BIG money podcasting. You might not start out with a $1000 course, but there’s nothing stopping you from working your way up to (and beyond) that.
- This is something you really care about, and since you know your audience and designed the offering specifically for them, you can feel good about promoting it and will probably work harder to do so across your entire content and business ecosystem.
Again, putting in the work to create the product in the first place is where the real work takes place. You’ll probably want to get to know your audience and find out what they would really benefit from before putting in the hours of creation. BUT, a well-done product can bring you income for literally years into the future, with very little, or even no work involved!
To me, it seems that podcasters haven’t fully tapped into the opportunity that is Patreon yet. But that day is coming soon.
Patreon is a web platform that allows “Patrons” to sign up for an often small monthly contribution, to support your work. In exchange, they generally get additional benefits that are not open to the public, maybe behind the scenes videos, extended podcasts, the ability to submit questions to guests on the podcast, direct access to you as the host, and really anything else you can dream up.
Keep in mind that it will likely be a small percentage of your overall audience who sign up as patrons, but don’t underestimate the generosity of your fans. Often even a small audience can add up to more than you might think. The key is getting creative with your bonuses and letting people know that the community exists.
If you’re reading this the week it comes out, we’re having an Expert Q&A in our free Facebook community, Cut The Bullshit Podcasting aaaaalllll about how to effectively use Patreon for your podcast.
One of our group members Evan Bourcier, host of the Super Secret Filmcast is going to share his experience and answer questions about how he’s bringing in more than $2000/mo through his Patreon account!
If you’re reading this in the future, first off hello from the past! Secondly, the recording of that Q&A should be up in the group for you to check out 🙂
A Few Other Monetization Options
The above three strategies (4 if you include sponsorships) are the big ones for the average podcaster to focus on when starting out, but a couple of other options might include
- Group coaching, mastermind sessions, or retreats
This could also fall into the “service” category but seems slightly different to me. You’re probably not running these right out of the gate, but they can be a hugely impactful experience for everyone involved if you can get to that point and it makes sense for your audience.
- Speaking engagements or virtual summitsAgain, probably not something that’s going to be open to you starting out, but these types of events can do wonders for your brand and show.
- Auctioning off one of your kidneys (or other organs) to your audience
This is definitely not a beginner strategy, but it can be highly lucrative if executed properly and with the right audience. You might want to check the legality of this one as well…
The Best Strategy For Monetization
As with any business, (yes, your podcast is a business) it’s best to diversify your sources of income and have as many eggs in as many independent baskets as possible.
Keep in mind however that you don’t get there overnight. It takes time and a lot of hard work (just look at these top podcaster’s workflows) to get to the point where you have a decent sized audience with multiple ways of monetization.
Starting Strong From Ep 1
If it were up to me, every podcaster would start their shows with an entry level product or service of some kind already made and ready to go, something in the sub-$100 range, along with an awesome freebie to both provide a ton of useful information to their listeners, while also getting them onto your email list, from which you can continue the funnel towards that product you’re offering.
In addition to that product funnel, I would ALSO be using well placed, and extremely relevant affiliate products to market to the audience as well.
These two strategies are 100% doable for your very first episode. No need to build your audience to attract sponsors, and both of those streams are completely within your control.
So if it’s really that easy, that begs the question, what are you waiting for? Get out there and create something, or find something someone else has created that your audience would EAT. UP.
I don’t care if it brings you in $3 this month, I want to see some money rolling in, something to tweak and grow and build on until that $3 is $300, and then $3000!
Seriously. It doesn’t take a huge audience to get there, but you do need to get creative, and you do need to put in the work.
I’d really love to hear what you’re working towards in terms of monetization, and if you even realized there were other options besides sponsorships. Also, I’m sure I missed some strategies, so let me know what those are if you’ve got any!
Oh, and once again, be sure to come check out our Expert Q&A on Patreon in the Cut The Bullshit Podcasting Community
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