Understanding Podcast CPM Rates: Why You Won’t Make Money From Ads and How to Monetize Instead

Today, Eric is dropping knowledge on a critical topic for any podcaster, the reality of making money through ads. He also gets into why trying to monetize through ads is TOUGH unless you have a huge show. Regardless, understanding ad-based monetization is important, especially if your show is still growing its audience.

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What is a Podcast CPM?

When listening to this episode it’s important to understand the concept of CPM—Cost Per Mille, or cost per thousand downloads.

This metric is essential as it determines the amount you earn from ads per 1,000 episode downloads within 30 days. While host-read ads generally fetch a CPM between $15 and $25, programmatic ads typically offer less, under $10.

Eric navigates through some real calculations to illustrate potential earnings based on your show’s downloads and discusses the implications of dropping ads into your show if you only have a few hundred listeners. He also uncovers alternative monetization strategies that could be more lucrative than ads.

Podcast CPM Deep Dive

  • Understanding CPM Rates: CPM stands for Cost Per Mille, indicating the revenue per 1,000 downloads. Knowing this helps gauge potential ad earnings.

  • Calculations for Different Download Scenarios:

    • 1,000 downloads: At a $20 CPM, you earn $20.

    • 2,000 downloads: At a $20 CPM, this doubles your earnings to $40.

    • 200 downloads: With the same CPM Rate, the earnings drop to just $4.

  • Host-Read vs. Programmatic Ads: Host-read ads generally offer higher CPMs than programmatic ads, which are automated and may not align perfectly with your audience.

  • Alternative Monetization: If ad revenues are low, consider selling your own products or services directly to your audience for potentially higher returns.

The Best Way To Monetize Your Podcast

One of the best approaches is selling your own products and services directly to your listeners. This could include anything from coaching services related to your podcast’s theme to online courses and workshops.

By advertising these on your podcast, you directly control the content and keep all the revenue, bypassing any middlemen.

Additionally, creating exclusive content for platforms like Patreon, offering Q&A sessions, or hosting meet-and-greets can significantly enhance listener engagement and open up new revenue streams.

These methods not only provide financial benefits but also strengthen your connection with your audience, positioning you as an authority in your niche.

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