How to Make Money Through Podcast Sponsorships and Advertisements?
In the ever-growing world of podcasting, making money can often be a taboo subject. But new and veteran podcasters alike are always thinking about 'how to make money through podcasts’.
While there are a number of channels available for show hosts to generate some revenue, be it merchandizing or premium content, the real money is to be made through sponsorships and advertisements.
But how do you find sponsors for your show and implement ads without ruining the feel and flow of your podcast? Find out below.
✴ Understanding the Motives of Advertisers & Sponsors
Advertisers and sponsors will generally have two overall goals in mind - boosting brand exposure or selling their product/ service. There are some excellent metrics that can be used in the pursuit of each of these objectives.
CPM (Cost per Mille) determines how much advertisers are willing to pay for 1,000 downloads of your show, video views, or impressions on your content. As CPM has the main goal of boosting exposure there isn’t the same emphasis on demographics among other variables. In this way, both advertisers and the podcasts themselves has more freedom using this approach
Another metric used by advertisers is CPA (Cost per Acquisition). Since this method has the main objective of getting conversion, it encompasses all the sign-ups and sales that are received as a direct result of an ad. This is especially prevalent for affiliate deals, whereby a sponsor will offer you a referral bonus for each purchase your show generates.
Generally, podcasts that are successfully engaging and retaining their listeners will endeavor to use CPA as their metric of choice. It’s a great way to make money through podcasts and allows for exponential growth in revenue. On the other hand though, podcasts with high download numbers that may not have a high level of engagement might opt to go down the CPM route.
✴ Why Do Advertisers & Sponsors Use Podcasts?
Podcasts are an excellent medium for sponsors to advertise their products and services. By building an intimate relationship with listeners, hosts become a trusted voice that audiences can rely on even when it comes to purchasing decisions.
Due to the seemingly endless variety of shows, podcasts also have access to key demographics that advertisers want to tap into. In addition to this, podcast listeners in the U.S are typically wealthier than the general population according to recent data, which means they’re more likely to make purchases due to a higher disposable income.
✴ Finding Sponsors and Advertisers (H2)
The first step to make money from podcast sponsorships is to find an advertiser that's compatible with your brand. By analyzing common interests amongst your audience, you can build a well-defined ICP (ideal customer profile). This can then be used to highlight companies and brands that will appeal to your listeners.
Additionally, you can identify keywords and common themes in your own content and use them as search terms to find prospective sponsors. You can set up search alerts and save promising options, which will enable you to begin building a database of companies that you could potentially pursue.
✴ Pitching Your Show to Potential Sponsors
Pitching your podcast to potential sponsors is a relatively straightforward process. In its most basic form, a pitch could simply be an email that contains important information about your podcast.
Slide decks are an effective way to boost the legitimacy and appeal of your show as well. Not only do they make your entire operation look more professional, but they also offer an easy to navigate format for advertisers to see what you're all about.
Some of the most important things to include in your slide decks are highlighted below.
Title slide - featuring your show name and artwork.
About Us slide - including your show summary, average episode length, typical format, hosts, guests, and general subject matter.
Audience slide - covering audience demographics, download numbers, and content impressions.
Pricing slide - highlighting your current rates and partnership alternatives.
Team slide - with bios, pictures, and contact information for your team members.
✴ How Much Do Advertisers Typically Pay?
On average, advertisers and sponsors will spend between $15 – $30 on each person that eventually makes a purchase (CPA) and anywhere around $15 – $25 for every 1,000 listeners who are exposed to their ads (CPM).
There are different ways to determine how much of your audience will respond to an ad. Some of these methods are highlighted below.
✴ Prepare for a 1% Conversion Rate
A 1% response or conversion rate is a realistic objective for a lot of podcasts. This means that an episode with 10,000 downloads could see roughly 100 people follow through to the pre-determined outcome. By taking your number of downloads and multiplying it by 0.01, you can easily predict your expected number of conversions.
✴ Measure your Existing Rate of Engagement
Alternatively, you can predict your engagement rate by monitoring your current listener interactions. Whether you solicit audience responses or conduct polls and surveys, you can measure your engagement and estimate future conversions.
Simply take the number of responses you receive and divide it by your episode downloads to see the existing ratio of active to inactive listeners.
✴ Do you have the Potential to Make Money Podcasting?
Podcast sponsorships and advertisements are popular because they benefit all parties involved. The sponsors and advertisers are happy thanks to greater exposure and sales while the podcast owners welcome an additional revenue stream.
The key is to find sponsors that share similar values as you, with a potential overlap between your audiences as well. Thereafter, decide which methods to use when negotiating deals along with your set fees.
For more information on how to make money through podcasts, check out our free guide to podcast growth and monetization here.
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