The Traditional Route To Monetization
At some point in your podcasting journey, you’re likely going to want to monetize your podcast. While it’s not easy, it IS possible. But, it takes a while, so you’ve got to be patient. Unless you’re already an influencer or have a built-in fanbase in your niche, it’s going to take some time, and trial and error. The first step is to focus on building a community. Once you have a community, you can plug them into your ecosystem and begin selling them on your products or services.
How do you build a podcast community?
- By actually adding value to your industry
- Consistently releasing episodes
- Building credibility and trust
- Interacting with your audience and listening to them
- Offering freebies
- Helping others get to where they want to go
These are just some ways to build a community and grow an audience. This is an ongoing process, and in time, if you’re consistent, you should see results. Putting out great content is currency these days.
Once you’ve started building a following you can begin your journey to monetization. In this article, we’re covering the traditional type of podcast monetization, sponsorships, aka, ads.
If you’re an avid podcast listener, you certainly heard ads playing in some of your favorite shows. When podcasts have big enough audiences they can garner the attention of advertisers. Traditionally, how do podcasters work with advertisers? By joining podcast advertising agencies.
Podcast Advertising Agencies
Podcast advertising agencies focus on matching advertisers with podcasts that align with their branding and mission.
These agencies are all set up a little differently. Some have full-time sales staff that buy ad space for shows in their network. Others serve as a marketplace where advertisers shop around for pods that are a good fit. The money generated from these ad sales gets split between the podcast and the agency. 70/30 is a common split in the industry, but, 60/40 splits aren’t unheard of. Podcasters receive the majority of the split.
Acquired by SiriusXM in 2021, MidRoll, is a podcast agency that represents some of the biggest shows in the game. Their client list includes Conan O’Brian, Mark Maron, Rachel Maddow, Jay Shetty, Ed Mylett, Heather McDonald, and other popular hosts. MidRoll has a large sales team that sells advertising. However, MidRoll won’t sign anybody to their network. The exact criteria for acceptance aren’t listed, but you can expect that you need tens of thousands of downloads per episode, to get signed. If you’ve got some name appeal that could also help you get accepted.
AdvertiseCast sells ad inventory to over 2,500 podcasts. It functions as a marketplace, where podcasters can add their shows to the platform, for free, to start unlocking monetization. AdvertiseCast helps podcasters determine ad rates for their shows, but ultimately it’s up to the podcaster to determine what an ad spot on their podcast is worth. The download requirement for AdvertiseCast is 200 downloads per episode in a 30 day period.
True Native Media
True Native Media touts itself as a matchmaking company that connects podcasters to advertisers. Like MidRoll, True Native has a sales team that sells ad’s for the shows on their roster. TNM is a smaller more boutique agency, that’s client oriented. They provide a more personal approach and will handle ad campaign guidance from start to finish. If you’re looking to sign with True Native Media, you’ll need to have 1ok downloads per episode, in a 30 day period, to be considered.
Another big dog in town is Ad Results Media. They sell ad’s across various platforms, such as podcasts, AM/FM radio, Satellite radio, YouTube, and others. Their goal is to forge intimate connections between brands and listeners. A few of their partnerships include Spotify, NPR, PodcastOne, Audacy, and iHeartRadio. Once plugged into their system they’ll create a custom plan for you and manage your campaigns from soup to nuts.
Types of Podcast Ads
There are 2 main types of podcast ads. These are host read ads and pre-produced ads. If you listen to shows with large followings, it’s likely that you’ve heard both.
A host read ad is an ad read by the host of a podcast. In this situation, the advertiser sends the host written copy to read. Sometimes the advertiser will also send the actual product or a sample of the product to the host. Typically the advertiser will make a note for the host to either read the copy verbatim or adlib the copy based on provided bullet points.
Pre-produced ads are read by someone entirely different, typically by a professional VoiceOver actor. These sound like traditional radio spots. Often times these have music or SFX mixed in.
Podcast Ad Formats
There are two types of podcast ad formats, baked-in and dynamic.
Baked-in ads are locked into an episode’s audio file. This means that if you listen to episodes that are several months, or several years old, the ads will still be in the episodes.
Dynamic ads are pre-recorded and inserted into episodes by podcast hosts. To set up dynamically inserted ads, you’ll need a podcast host that offers dynamic ad insertion. Podcasters will then create time-stamped ad markers in their episode’s audio files. The marked timestamps are where these pre-recorded ads will get inserted.
Ads that are inserted dynamically can be host read or pre-produced. The beauty of dynamic ad insertion is that these ads can be removed at any time. If your campaigns only run for a specific amount of time, dynamic ad insertion is key. With dynamic ad insertion, you can also target different demographics and people in different locations. Real-time targeting is also possible with dynamic ad insertion. YouTube has already been doing this for years. Different people in different locations may watch the same video, but see different ads play. Pretty sick huh?
Podcast Ad Placement
There are 3 main places ads air in podcasts. The top of the show, the middle of the show, and the end of the show. Also, depending on the ad load of the show, more than one ad can play in the pre, mid, or post show slot. It’s common to hear back-to-back ads play in any of the three ad slots.
A typical ad load for a large podcast could follow the two-three-two format. That’s two pre-rolls, three mid-rolls, and two post-rolls. The ads in these slots don’t HAVE to play back to back, but it’s more common than not.
Pre-Roll – An ad slot at the top of the show. Pre-Rolls are usually on the shorter side and are less expensive for advertisers to purchase because research shows that people tend to skip ads at the start of shows.
Mid-Roll – The mack daddy of ad placement, the middle of the show. Mid-Rolls are often 60 seconds and are more in-depth spots. Statistically, they have a higher completion rate, so they garner more money.
Post-Roll – You guessed it. These ads air at the end of shows. Honestly, most podcasts don’t even air these, because most people don’t listen all the way to the end. If you do happen to hear a post-roll play, it’ll probably be 15 seconds and be a pre-produced spot.
How Much Can I Expect To Make From Advertising?
There are industry standard rates for determining how much podcasters can charge for ads. It’s all based on a CPM model. CPM stands for “Cost Per Mille”, or cost per 1,000 listeners. Apparently, “Mille” is Latin for 1,000. It’s a stupid way of putting it, just latch on to “cost per 1k listens”, and “cost per 1k downloads”. This should help you remember the meaning.
CPMs range from about $15 – 25. The CPM for your podcast depends on the topic of the podcast, its marketability, a podcaster’s reputation, and how long the podcast has been running.
Also, 30-second ads get a lower CPM and 60-second ads get a higher CPM.
Let’s Break This Down, Shall We?
Advertisers look at how many downloads episodes are getting in their first 30 days after release. That’s the metric advertisers use when they’re looking to buy ad space. This is accepted industry wide.
So, let’s say your episodes average 10,000 downloads in a 30-day period. Let’s also say that an advertising agency negotiates that your show is worth a CPM of $20, and they’ve sold one mid-roll ad for you.
To calculate the revenue that ad will generate, you’d divide 10,000, by 1,000 (remember, its cost per 1,000 downloads). 10,000/1,000 = 10. 10×20 (because you’re getting a CPM of $20) = $200. That ad spot will generate $200.
Now, let’s say the agency was able to sell two mid-rolls for you in that episode, instead of one. You’re now at $400 for that episode.
On a different show/episode, let’s say the agency sold a pre-roll spot for XYZ podcast at a CPM of $15. Remember, pre-roll ads get skipped over more frequently. Thus, they get a lower CPM allotted to them. We’re calling it $15 in this scenario.
Each of this shows episodes rack up 30,000 downloads in their first 30 days of release. This pre-roll spot would generate $450. 30,000/1,000 = 30. 30×15 = $450.
Based on this, it’s easy to see how podcasts with large audiences can generate a lot of ad revenue. A weekly podcast with downloads in the hundreds of thousands can make some serious cash.
The Wrap Up
Obviously, you need a fair amount of downloads to get started with this traditional way of monetization. But, don’t let that discourage you. Keep plugging away, keep putting out great content, and keep promoting it. If your show is good and you’re consistent, you will slowly build a following.
F*ck The Gate Keepers
Don’t have “big” download numbers. Don’t fret, in our next article, we’re going to be outlining how to take monetization into your own hands. Podcasts are by the people, for the people. You don’t need to get in bed with these corporations to make a little scratch. We’ll show you the DIY approach to monetization, which we prefer anyway.
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