Podcast Monetization - The Direct Method - The Podcast Report Episode #43

Podcast Monetization the Direct Method it's the podcast report episode 43 show notes, links, conversation and more@the podcastreport.com 43 it's the podcast report with Paul Colligan. And here's Paul the big idea for this episode, or at least one of the big ideas, is it's your audience. Don't outsource it. This is the Podcast Report. My name is Paul Colleague and I'm a podcaster author. Right now I've got a book out called how to podcast 2015 that's doing pretty well. Many of the audience has it. If you don't, you might want to take a look. If not. Either way, regardless, we've got a podcast to do. I've been part of podcasting since the beginning. I love this industry. I have since day one. The avatar for this show. My audience or podcasters looking to make their podcast real business or do real business because of their podcast. This is not a massive play. You'll never see this on the top most downloaded podcast list, but it's a deep one. I love it. I love my audience. Welcome new listeners. A number of you have joined on the last podcast monetization episode. Did well. Some of you have come on as a result of different efforts. We're doing welcome, welcome. We've got a whole back catalog. I've kept all of them online for you. This one's going to be a little bit longer than normal episodes. There's a lot of content to cover here, but it'll be a good one. And welcome for those of you whom it is your first time. Why this topic? Well, you're interested in monetization. I know that as a podcaster looking to monetize their podcast or looking to do more business with their podcast, monetization is a huge topic. All the shows I've done about monetization have seen much more downloads, much more interest, much more interaction, much more requesting of things such as transcript and show notes. At this point, I might as well say if you want the show notes from today's episode, go ahead and text EP4.3 to the show hotline at 5:03-897-1290. But the industry is looking at monetization. We all are. My take is different. My take is not based on hope, not based on theory. My take is what I've seen work and a little bit of logic and gosh darn it, an eye for longevity. Being in this for 10 years. I've got some stuff that I can share with you that maybe the the short timers can't. Now, direct monetization is the other side of indirect monetization, which we chatted about last week. Indirect monetization is, is revenue, is money that comes in because of your podcast, not directly as a result. So these are things like consulting contracts or speaking gigs or free stuff, that kind of thing. If you want to head back to podcastreport.com 42, we've dedicated a whole episode to it. Direct monetization is podcast that you can draw a direct line to directly responsible from the show. And essentially direct monetization comes in one of two categories. You sell yourself, you sell your own products, you sell your own services, or you sell someone else someone else's products, someone else's services. You've been on it. A lot of podcasts advertise audible or 99 designs or there are definitely some people out there who have shown themselves to be friendly to the podcaster. Space Squarespace is one of them. And for all of you who have done that, thank you so much. But let's run the math. And I think this is really important because you know the overall message that I said, outsourcing your audience. I mean, if you're doing a podcast about X and then you introduce advertisements to other websites or other products or other services, you're, let's admit it, you're sending people in that direction. You are outsourcing your audience and it's something you want to think about. And obviously you got to pay the bills and you have to see a revenue stream for this. But. But what can we do about this? Well, the first thing we could do is we can run the numbers because so few do this and it's so sad. And part of it is stars in the eyes. Part of it is they've heard rumors, they've seen things, they've heard things. They have idols who are doing well and well. We're on the numbers. So John Lee Dumas and I have a link to his report and you can see it@thepodcastreport.com 43. I've got a link to this. He has a whole section on sponsorships. Let's just use his numbers. According to John, a 15 second pre roll can get you about $18 cpm and a 60 second mid roll can get you about $25 cpm. What that means is that's how much money you get per thousand downloads. And so if you look at the math of 211-5160, you're basically getting about 33 cpm or and this is the way I like to think of it. You're getting about 3.3 cents per podcast download. John does a couple of pre rolls, couple of mid rolls and so he's getting a $66 cpm or a six point cent per download money. Now that's not bad. That's the model. A lot of people are doing this, but I want to compare it to different models. I want to run the math and the first thing I'm going to compare it to is my model. My two big things are a $997 course or a consulting day. Now, to generate $997, if I do the 33 CPM, which is about as much as I could do, I just couldn't put four ads into one of my shows. If I were to do the 33 CPM, I would have 30,212 downloads. If I were to jump all the way to the 66 CPM, I'd still have to get 15,106 downloads. If I can't get someone to buy my course after 15,000 downloads, let alone 30,000 downloads, there's something wrong with my course. If I can't get someone to buy a consulting day after 30,000 downloads or after 15,000 downloads, even after 10,000 downloads, there's something wrong with my consulting days. I mean, let's face it. And that's one comparison. We're going to do some others here. But you want to run the numbers. So couple things about ad insertions, couple things about sponsorships. Number one, there is that outsourcing element. I mean, if your show is about X and you introduce a product that does, yes, you are outsourcing and you are sending your audience in another direction and you're telling them to go to another place. And I don't know, it sits a little bit weird with me. Some other experiences, I have a hard time taking any more than two ads per show. I know others do it, but I personally, part of the thing is a podcast for many or at least for me is a single thought, is a single big idea. My big idea here. I don't want you to outsource your audience, or at least I want you to consider the cost of outsourcing your audience. And if I send you multiple ads to multiple places, it just kind of goes against the whole flow in the formula. That's my take. I'm sure some of you will have something to say about that. I'll give all sorts of information about how to contact below. But Obviously the podcastreport.com forward/43 will take you all the stuff for today's episode. Daily shows, you know, you know, John, one of the things that John's does that's amazing is, is John gets out seven shows a week. And, you know, think about it. If you make X amount per show, well, seven shows is seven times better than one show. Doing traditional math, in my experience, and I'm going to stress that this is my experience, just because you do more shows doesn't mean that you're going to get more downloads. If I were to do, you know, let's say I've got, you know, let's say I've got 100 downloads per episode. The podcast report. If I did the podcast report twice weekly, that doesn't automatically mean that I get about 200 downloads. That mean, really, I'd probably get about 130, 135 downloads. And of course, if I were to do three, it certainly doesn't mean 300 downloads. It would mean probably about 150, 160, you know, going proportionately with my numbers. And just because you got a daily show doesn't mean that that automatically increases your downloads. Just something to think about. You got to run the math, obviously, on that. You got to run the test. The one thing that a daily show does that's incredible. And John has done this in ways that nobody else has done, and gosh darn it, it' of his success and it's part of why he's doing so well. You do a show a day, especially when you've got interviewers, you've got people every single day marketing and promoting your show for you. You've got something to talk about on Twitter every day, something to talk about on Facebook every day. And that's incredible. So there are reasons to do more shows per week, but they're not necessarily monetary reasons. And I just want you to run the math through that. Now, obviously this varies. Obviously this is different based on who you are, who your audience is. But the big thing is it's just simply run the math for you. Does the math for what you think you're going to do, work on your podcast, or are you waiting for the big break? In my case industry, I spoke to this earlier. You know, I got to get about 30,000 downloads to make in revenue what I can make from one course or a consulting day. I'm going to sell courses, I'm going to sell consulting days. That's just how I'm going to go. That's my math. What's what's your math? Okay, John gives. And I've got links to this in the show notes. John gives his. His financial report. And what he did was. I mean, in March 2015, John made $212,000 in. In. In. In revenue. 212 and change, which is amazing. Good job, John. Amazing. But if you look at John stats and you look at his income report, only $75,442 of that with sponsorship income, that's only 35.5% of his revenue from the month came from sponsorship revenue. So almost exactly a third. John is selling his own stuff as well. And just the numbers. When you run the numbers, he's making more money selling himself than he is with sponsors. And he's run the numbers. He knows how it works. I recommend that you do the same. The last thing I'm running the math is nobody ever thinks about the time associated with negotiations, the cost associated with negotiations, bringing in sponsors. A lot of times, if you're dealing with a podcast network, you have to give them half for finding it, including it, the technology, that type of thing. So, anyway, run the numbers. Okay. Strategies for direct monetization. Big downloads don't always equal and mean ad insertions. There are people out there who are doing tremendous download numbers who aren't putting ads in their podcast, and they're doing that on purpose. I've got one client I've spoken to before, just looked at the stats today. 1.56 million downloads. You know, at the lowest possible numbers, this would be $49,500 in revenue. Um, this person isn't even selling this person's own particular product. It's all a game, and it's all a play to build brand awareness. But the funny thing is, just from traditional ad insertion, if I offered this person 49, you know, and change. Heck, if I just said 50k to put ads on your next 1.56 million downloads, this person was going, no, that's not why I'm doing this podcast. So don't always assume that the big numbers equate big downloads. I'm another client. I'm working with 1.48 million since the reboot of the show they had hosted with a. Oh, a bad host that wasn't giving them good stats. They sent. They moved to Libsyn. Since the move to Libsyn, 1.48 million downloads. I'm gonna guess 3 million downloads total. But, you know, half of that's conjecture based on not having good stats. And of course, the logic for that is good. Stats, they as well are doing this, the majority brand building. Now this particular client has a $10,000 product and a $25,000 product, you know, 1.56 million downloads. The other one 49,000. They just need to sell their $25,000 product twice. And they've made more money than they would have made an ad insert. So big downloads don't always equal ad inserts. Key strategy, next strategy. What kind of podcast are you building? What do you want to be when you grow up? Are you ad supported on purpose? And there are some shows out there that are ad supported on purpose and they're doing a great job and God bless them. One of the ones that comes to mind for me is Back to work by 5 to 5. Any of the shows on the 5 to 5 network, they're doing a great job with that insertion. Leo and Twit is doing a great job with, with ad insertion. But, but they knew that they, they knew that's what they wanted on purpose. They were that from day one. And they've always sold ads up against that. Sadly, a bunch of podcasters, they want to put this up and, you know, we'll pay for it with ads. Is that the game? Is, is, is that the number strategy? Have you, have you considered other options for monetization, even direct monetization? Let's take $40 CPM as a model here. If 40 CPM is your number, what if you got $5 per episode donors? Okay, so you're making $40 per CPM is what you're looking for in ads. And I know a lot of shows that do less than that. Let's say you were just looking for $5 per episode donors. You only need one out of every 125 people who download your show to think it's worth it. Only one out of every 125 to give the donor. Paul, does that work? Well, I did some research. PBS. 61% of the viewers to PBS have donated to PBS. I've got the research to that report@the podcastreport.com 43. You could take a look at that yourself. But you know, 61%, that's, that's more than one out of every two. All you need is one out of every 125. Something to think about. Taking the 60, the $40 CPM model. That's, that's, you know, let's say you're doing a thousand shows a week. That's $160 per month. You know, could you get 16, $10 a month club Owners. That could be a Patreon kind of thing. That could be an inner circle kind of thing. Lots of options there for direct marketing. And another way to think about is affiliate marketing. Affiliate marketing is essentially online paid commission sales. Instead of getting, you know, $38 every time 1,000 downloads of an episode happen, I get a piece of the action when, when a sale happens. And in the niching that's podcasting, I like that model more. I'm more comfortable with that model. A recent campaign I did, I was selling a product that was selling for a percentage of the competitor and they were truly better than the competitor. I generated $450 and 35 cents on 913 clicks, which is essentially. Well, not essentially. It is 49.3 cents per click. Okay, that would have had to have been 13,674 downloads at a 33 CPM show. Easier for me to generate 913 clicks than it is for me to generate 13,674 downloads. Just a thing to think about. When you do affiliate marketing, a large part of that comes from the mailing list that you build from it and what not you do there. All right, some more strategies and again, going longer here, but a lot of stuff here. Selling your own content versus selling someone else's content. When you sell, you know, your own stuff, you know, there's sometimes a 50, 50 split when you're selling somebody else's stuff. When you sell your own stuff, there's nothing. Once the credit cards are done, maybe 5% they take, you get to keep 95. Digital delivery is almost free. Don't be nervous to pay admin fees if you've got a, you know, a membership site, software, something like that. But man, you keep your own, you keep a lot more. And I'll tell you this, the power podcasting is in the niche. The power podcasting has always been in the niche. And the niche is higher level products of sale is higher revenue options, especially if you're selling your own stuff. My opinion, Wait till next week for more. All right, what can you do? What do you do with this? Well, first of all, just run the numbers. A lot of people don't run the numbers. A number of you are going to just take this, grab a spreadsheet, run the numbers and realize that you're never gonna make the money you're looking to make, even at the best of download situations. And you gotta do something else. And sending your audience somewhere else always kind of creeped you out. And well, now you send your audience to your own place and you do better run the numbers, consider the options and then really key and really important is just decide what you wanna be when you grow up. Decide what the monetization option is for your podcast. Start building that right now. Hey, we're at Social, all over social, the podcastreport.com, twitter, Facebook, slash all the rest. We'd love to have you at Facebook. We'd love to have you at Twitter. You can comment on Today's episode, the podcastreport.com 4043 and you can text hashtag ep4.3 to 503-897-1290 to get a mind map and a transcript of today's episode. Links at today's website, a link to my podcast book, a link to John Lee Dumas sponsorships guide, a link to the PBS report on what their downloads were, a link to my indirect monetization episode, and a link to John Lee Dumas's March 2015 report. All good stuff that back up my numbers here, just run the numbers. The numbers I gave you. How the numbers work for me. The question is, how do the numbers work for you? If this is your first episode and you've not subscribed to the show, or even if this is your third, fourth or fifth episode and you've not subscribed to the show, subscribe to the show. 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