Podcasts are exploding in popularity and it doesn’t look like they’re going to slow down any time soon. They’re relatively inexpensive to make and they’re fun to listen to. Plus, they can make you cheddar! That begs the question, “How do podcasts make money?” right? Well, here are the 7 most popular and effective strategies if you’re looking to get in on the grind.
Before I sell you the clouds, I’m going to sell you the dirt.
As a podcaster who has actually made a lot of money from his podcasts, which is not the norm, I feel like I have a responsibility to give it to you straight.
YES, podcasting is pretty easy once you get over the initial learning curve (and I’ve got a badass free guide for how to start a podcast if you’re interested).
YES, podcasting is fairly inexpensive (at least to get started).
YES, podcasting is hella fun.
BUT, and this is a big but…don’t think you’re gonna pick up a mic, start a podcast, and start raking in the bacon.
Podcasts can make money. Sometimes big money. But the cold hard reality is that most podcasts don’t do shit.
Most people who start podcasts with the hopes of making money end up looking like Elephant Man from repeatedly smashing their face into a brick wall of failure and frustration.
I’ll be publishing an article on how to make your podcast successful soon. If that’s of interest to you, make sure you’re on my list.
Okay, so now that you’re properly motivated and mentally positioned, here’s the 7 most popular and effective ways that podcasts make money…
Strategy #1: Podcast Sponsorships
Podcast sponsorships are a form of paid advertising. Listen to the Joe Rogan Experience podcast for example – all those ads he reads at the beginning? Those are sponsors.
Sponsors pay you for access to your audience. This is the same strategy that businesses use to get in front of website traffic using banner ads and such, except podcast sponsorships are far more effective since podcast listeners are highly engaged and tend to be very attached to the podcasts they listen to.
There’s really no difference between podcast sponsorships and radio advertising, except that podcast sponsorships are less produced – they’re usually just simple ad reads.
How much do podcasters make off sponsorships?
It’s all over the map. The main factors that determine how much you can make from sponsorships are:
- How many downloads you average per episode (current rates for podcast advertising tend to be $15-$50 per 1000 listeners for a 30-second spot).
- How many ad spots you offer (more ad spots means less exclusivity and more audience annoyance).
- The placement of those ad spots (pre-roll, mid-roll, or post-roll – with mid-roll typically being the most expensive since they’re the most effective).
Most podcasts don’t have a big enough listenership to be interesting to advertisers. If you wanna pull in good ad revenue, you need to have a big audience. Or, you need a highly engaged audience in a smaller, more specific niche.
Doing six-figures in ad revenue is not unheard of and many of the top shows do millions a year. Rogan has the most popular podcast as of this writing and is most likely doing 8 figures in sponsorships and that doesn’t include the ad revenue he gets from publishing his episodes on YouTube.
If you want to go the podcast sponsorships route, I would highly recommend this post by Entrepreneur on Fire. It’s the best breakdown of podcast sponsorships I’ve seen.
But let me take you back out of the clouds for a second. There’s over half a million active podcasts in the iTunes directory. The percentage of them making six figures off sponsorships is very, very small.
Thankfully, it’s not the only way to make money…
Strategy #2: Donations
Donations are far and away the most popular podcast monetization strategy and podcast listeners are surprisingly willing to dole out cash to support the shows they love.
It started with good ol’ PayPal, but platforms like Patreon have come along as of late and changed the game of accepting donations.
If monetizing with donations is your thing, I would definitely recommend going the Patreon route which encourages subscription-based donations.
Instead of just getting one-off contributions from people, Patreon sets “patrons” up on a plan to pay a fixed amount either per month or per episode. This makes revenue consistent for you as a podcaster where one-off donations result in very sporadic revenue.
It’s also helpful to entice people to contribute by offering them exclusive bonuses. Patreon makes that easy to do as well. One of those bonuses is yet another monetization strategy in itself…
Strategy #3: Premium Content
Most podcasts are 100% free. Some are 100% paid. And some are hybrids.
The bottom line, though, is that hiding at least some of your episodes behind a paywall is a solid monetization strategy.
In this way, the podcast itself becomes the product rather than simply a channel for acquiring attention.
While there aren’t a ton of shows putting all their episodes behind a paywall, one of my predictions for the future of podcasting is that this will become far more normal. This is especially true for highly produced shows like Serial, assuming they would stand to make more from paid subscriptions than they do from ad revenue.
Now, if you’re new to podcasting I wouldn’t recommend this route because having 100% of your content behind a paywall means there’s not much you can do with it to get exposure in the first place.
Part of the power of making a podcast free is that it’s easy for people to find, easy for people to listen to, and easy for people to get attached to. That’s why, if you’re going to monetize with premium content, I’d recommend the hybrid model.
To use the hybrid model you can either make certain shows exclusive or simply make your archive exclusive. For example, allow the 10 most recent episodes to be free and everything else is paid.
It’s a solid strategy that many are finding success with.
Just keep in mind that this strategy will absolutely harm your download numbers which can make landing podcast sponsorships difficult. Plus, people who are paying for your episodes probably don’t want to listen to ads, so this isn’t a good strategy to use if you’re also planning on selling ad spots.
Strategy #4: Self-Promotion
This strategy, and strategy #5, are the only two podcast monetization strategies I’ve used (and very successfully).
In my Ultimate Digital Marketing Strategy Guide I explained just how effective podcasts are at building an audience and getting engagement.
Since all my podcasts have been attached to brands I was building – brands that had their own products – my philosophy was very simple: use that attention to sell my own stuff.
That’s why I started my podcasts in the first place. It’s an inbound marketing channel, plain and simple. And it’s a grossly effective one at that.
My podcasts easily generate mid five figures in revenue each year simply through mentioning my own products and services within the episodes along with the natural trickle of traffic that will visit your website after finding your podcast.
This isn’t just theory. I’ve tracked where the sales come from. When I ask buyers how they found me, the podcast gets mentioned time and time again.
If you already have a business or a brand that has its own products, starting a podcast to attract your target market and sell them your stuff is one of the best digital marketing strategies in existence right now.
Strategy #5: Affiliate Marketing
Imagine you have a digital marketing podcast for a moment and let’s say your podcast gets 5000 downloads an episode.
Now imagine that there’s this web hosting service that you love and really believe in (like Flywheel – read my Flywheel hosting review here). And the company that provides this hosting happens to have an affiliate program – a program you can sign up for where they give you a special link (URL) and award you a commission on any sales that come through that link.
So you join the affiliate program and you get your link. Next, you create a redirect from your own website to that URL, something like https://go.digitalambition.co/flywheel/ this makes it easy for you to remember and to dish out to people.
Now that your redirect is all setup, you go on the podcast and mention that you use this hosting company and you recommend that other people looking for website hosting give it a shot. Of course, you tell them to go to https://go.digitalambition.co/flywheel/ when you do that.
Let’s say that company gives you $50 every time someone signs up and you get just 1% of your listeners to purchase hosting with them. That’s 50 sales. $2500 smackers.
Congrats! You just engaged in affiliate marketing and successfully generated some serious cash from your podcast! Easy right?
Strategy #6: Premium Guest Exposure
I’ll be super up front with you – I hate this monetization model unless it’s explicitly known that a podcast is all about paid exposure for guests (in which case I won’t listen).
Here’s how this model works – a guest pays the podcast host for the opportunity to come on and get interviewed. In that interview, the guest typically pitches something to the audience.
Now, this might not seem like a super out of bounds thing to you at first, but I personally think it breaks the entire spirit of what podcasts are all about.
Traditionally, guests are invited to come on the show and shows work very hard to find compelling guests. This is what makes the show great.
When people pay to become a guest, there’s no real barriers to entry. The host isn’t vouching for the quality of the guest or the value they may or may not provide. Instead, anyone and everyone can come run their mouth to the audience.
To me, it cheapens the show. I want to hear from guests who were hand-picked or who have enough authority to be invited. I don’t want to hear from people who had to pay their way on.
Think about it. Are the Gary Vaynerchucks and the Seth Godins of the world paying to be on people’s podcasts? Fuck no. People are clamoring to have *them* come on. They probably turn down 10x as many requests as they say “yes” to.
That’s how it should be, not the other way around. By charging guests, you end up giving a voice to the people who can’t get on shows otherwise.
I don’t know. IMO it’s a bad model. If you think otherwise you can try to convince me in the comments.
Strategy #7: Podcast Network Inclusion
A podcast network is a collection of podcasts who all publish under the same parent banner.
Typically, the owners of a podcast network monetize the entire network with advertising sponsorships. The network model allows them to attract a lot more advertisers because they produce content in a range of markets and have a much larger overall audience.
By being part of a podcast network, you get a share of revenue that the network makes. It’s still fundamentally a sponsorship play, but you don’t have to cut the deals yourself. The network does the work and all you have to do is focus on creating a popular show.
In the case of Rainmaker.fm, I believe they use their network to promote their own products and services – stuff they sell via Rainmaker Digital and Copyblogger Media.
The bottom line is that having a network of shows pulling mad attention, you have lots of options.
Most podcasts don’t make money off just one strategy.
Obviously, there are pros and cons to each strategy. Thankfully, there aren’t any rules. You don’t have to rely on one singular strategy to monetize your podcast (or to monetize your website in general).
Also, keep in mind the opportunity that’s available based on the size of your podcast. If you’re starting a new podcast, you’re unlikely to be able to score sponsorships, right? So focus on affiliate marketing or donations in the early days and then add sponsorships when you get to a certain size.
As long as you know what your options are and what the pros and cons are, you’re golden. And, as usual, diversification makes for greater security.
Are you thinking about starting a podcast? Drop a comment and let me know what your podcast will be about and what form of monetization you’re going to try and use!