My Tried-and-Tested Tips to Monetize a Podcast
When you first started your podcast, what was your motivation? Was it to make money, share a point of view, grow your reach, or something else? When I started The Practice of the Practice Podcast, it was to grow a reach beyond my website. It was also a place to share what I was learning about the business side of private practice, and position myself to potentially make money through a different stream and monetize a podcast.
What Studies Show When Monetizing a Podcast
The problem with monetizing a podcast is that the way to actually do it is different than most advertising models. According to a Buzzsprout 2020 study, the top 50% of podcasts get 98 downloads per episode. The top 10% have 982 downloads per episode. Only 1% of podcasts have more than 15k downloads per episode. With advertisers paying $20-$50 per thousand (the official term for this is CPM “cost per mille”) listens that means if you are in the top 10% of all podcasts with around 1,000 listens per episode, you’ll only make $20-$50 per episode, despite being in the top 10%!
Forget CPM if You Want to Monetize a Podcast
That’s why I have thrown CPM in the trash heap. Honestly, if you have a niched podcast I have found you can get about $.50 per listen per episode. That means that if you have 1,000 listens per episode and do four episodes per month, you should be making a minimum of $2,000 per month from those listens, not the couple hundred dollars that CPM would pay.
So how the heck do you make $.50 per listener instead of chump change?
3 Main Ways to Monetize a Podcast in 2021
- Your own products
- Direct negotiated sponsorship
- Affiliate products
You may have heard these methods before, but what I’m proposing is different. I’ve talked in previous articles about falling in love with the pain and the people, before you pitch a product. That still applies here. So let’s break down how to do this.
1. Selling your Own Products Through a Podcast
If you can’t sell your own products through a podcast, then it’s going to be terribly difficult to pitch to sponsors. Let’s think about why people buy anything, it’s to solve a problem, avoid pain, or get things done faster. What are you teaching on your podcast and other free content to help this happen before anyone gives you money?
Most podcasts are scattered in their application, teaching, and focus. Stop for a second and think about one problem your audience deals with. Is it how to build their business, grow their marketing, or feel better about life?
What does your audience accomplish through listening to you?
Good products can do some or all of these:
- Take away the need to search for information
- Provide information and implementation
- Speed up steps to succeed
- Provide accountability
- Give clear steps when stuck
- Get things done faster through an intensive
- Give access to a network of people
- Reduce worry
Harvard Business Review has a great resource to think through this, just Google “HBR Pyramid of Value.” You might provide individual consulting which is high touch and high cost, an e-course that is cheaper with more of a self-paced approach, or a membership community that helps provide access to others working on similar goals.
New podcasters can expect to make $500-$1,000 per month when they first get started with this approach.
How to Directly Negotiate Sponsorships and Monetize a Podcast
Sponsors want a ROI on their investment. That’s the bottom line. So if there is a website company that charges $59/month for their service, they’ll be looking at a few things. What is the lifetime value of a client? If that $59/m person stays an average of 30 months, that value is $1,770 assuming they don’t refer anyone of upgrade services. That means that if they pay $500 for you to promote them on one episode and they get two new clients that’s a $1,000:$3,540 meaning that their $1,000 investment in two podcasts brought in two sales with a lifetime value of $3,540.
This is the value of a niche. My podcast specifically focuses on counselors, psychologists, and coaches in private practice. As a result, it’s easier to negotiate with companies that have that ideal customer. Thus, I have 100% of their ideal clients as listeners and I can charge more than a general business podcast with the same numbers.
How to Promote Affiliate Products
Of the three primary ways to make money from a podcast, affiliate products are typically the least lucrative. However, if you can identify items that your listeners will purchase whether or not you recommend them, that is where you can build out an effective affiliate marketing plan.
The first step is to think through items that are needed to implement what you teach. If you’re helping with business strategy this could be website hosting, website development, SEO services, logo design, automation tools, phone services, virtual assistants, and marketing services. These are all opportunities to partner with affiliate products, consulting, ecourses, and tool.
When we have a new affiliate partnership, we set up a redirect with an easy-to-remember / with our website. For example: /llc /host /grasshopper
That way, whenever I’m having a discussion, on a podcast, or typing, it’s easier to include the link.
The last ninja move here is to include these within your automated email sequence. If you have an email about the importance of having a LLC, include a resource you like. If you’re writing about SEO, give great tips, then give your recommended provider. The more you can help your listeners to speed up progress, the more they will spend.
Lastly, let’s look at how this all comes together. You have around 2,000 regular listeners per episode. Based on my minimum calculations you should be making $1k per month off your podcast.
Here’s a projection for someone just getting started:
- One new 1:1 consulting client: $300/m for a 45 minute session, with email support: $300
- Sponsor for four episodes: $150/episode x 4 = $600
- Affiliates: Three people sign up for hosting x $75 = $225
- Affiliates: Three people sign up for a phone service you recommend x $50 payout = $150
This very conservative plan would yield $1,275 per month in new income.
Remember as you create this plan, go back to your listen’s pain and try and make it easier! Let me know how it goes!
Joseph R. Sanok, MA, LLP, LPC, NCC
Joe Sanok is a private practice business consultant who has the #1 podcast for counselors in private practice, The Practice of the Practice Podcast. His podcast, social media channels, and blog help over half a million private practice owners per month. For over 30 FREE marketing tools, resources, checklists, e-books, and other downloads.