Taking Ads On The Podcast Report - Why? - The Podcast Report

For years I've been saying I wouldn't take ads on this show, and now suddenly, season four, I'm taking ads. What is up with that? This is Paul Culligan. This is the podcast report. This is episode 116, season 4, episode 2. Actually, in season 4, I started taking ads here on the show. I haven't taken them in the past and many of the reasons why I haven't taken the past are still there. But let's chat about them. Number one, I don't want to distract from the message. When you do a show about X and then you do an ad about Y, there's a disconnect. Is the juice worth the squeeze? All questions, I think the power of podcasting. I know the power of podcasting. You have experienced that. The power of podcasting has always been getting your message out there. And when you do something that distracts the message, you can have a problem. Another thing that I don't like, reason number two is simply many times an ad will get you off the focus of your true monetization strategies. We'll run the numbers a little bit later in this, but if your show is going to make money from X running ads in the background, you want to be careful that that doesn't distract, doesn't take the focus. Number three, the numbers often don't really warrant it for most podcasts, maybe the hobbyist podcast, but those you who are making a business out of your podcast is just not enough to pay the bills. Then finally, I'll be honest with you, I have been burned. I've been in this space since before itunes was in this space. As you know, the podcasting bible doesn't even mention the iPhone in it because, well, we didn't know about the iPhone when we wrote that thing. And there was this history where there was this dream, there was this fantasy that we would podcast our passion and the profits would follow. And, well, that just doesn't work. You need a strategy, you need a plan. And more often than not, advertising gets in the way. Show notes, links, conversation and more for this episode can be found@the podcastreport.com 116. You are the podcaster looking to do great business with your podcast and this is the show for you. Ads in podcasting, a lot of people do them. Not everybody understands even how they work. I've got Rob Walsh coming in in a future episode. He does the ads at Libsyn. He's going to set us straight, give us a bunch of truth into all this. So I'm going to Let the majority of the logistics of this come from Rob, but I want to give you an overview overlook of the idea so you can understand. Podcast ads are most often now, not always. And that's one of the great things about running your own business, running your own podcast is you can sell however you want, but they're generally sold in cpm. And CPM stands for cost per milliliter. It's an old advertising term and it basically means how much do you get per 1000 downloads? Now, that CPM rate lets everybody basically speak in common language. Obviously, a show with a more tight niche audience is going to have a higher value, but you still sell in cpm. Um, obviously the closer you are to the beginning of the broadcast, the more you're gonna be able to get for the cpm, because the more likely people are to listen to the ad, that type of thing. Remember, in podcasting we don't get these stats of how much they listened, how many times they listened, if they passed it around, or that type of thing. So the CPM model is a great equalizer to, or a great common language, if you will, to sell ads. And that's why it's done. Now, sometimes people will sponsor an episode regardless of how many downloads or people do different things. But a lot of times it is on cpm. And with that said and done, and with that whole comment, on the whole, you know, the earlier you are in, the more you can sell it for. Let's let me tell you about Fireside. Today's episode is brought to you by Fireside, Fireside's podcast hosting and analytics platform. Created by podcasters for podcasters, Fireside was started by Dan Benjamin, the founder of Five by Five. Taking everything he's learned since 2009 for making podcasts for a living, he's turned it into a platform for podcasters everywhere at any level of expertise. Fireside has it all. Unlimited uploads, unlimited downloads, massive amounts of real time and analytics about your unique downloads. Superfast CDN for the best download speeds, multiple podcast support, free one click podcast importing from platforms like Libsyn, Feed Press, Simplecast, SoundCloud, etc. Custom domain mapping, beautiful responsive website with your own artwork, hosts guest pages, tons of advanced features like sponsorship integration, chapter markers, bookmarks for links, auto posting of future episodes, timecode linking, and a lot more. You can try Fireside for free by seven days, during which time you can import your existing podcast for free, taking advantage of every feature Fireside has to offer. The unlimited plan starts at just $19 per month. There's no commitment or long term agreements to worry about. You can visit Fireside FM PodcastReport today, take the tour. If you use the code PAULSENTME, you'll get 20% off the standard plan for three months. Fireside buy podcasters for for podcasters. I thrilled to have these guys on as the initial sponsor. I did the interview with Dan for Fireside. We will have that out in episode four of season four here. It's a fascinating platform. Dan's a fascinating guy. I love what they've done, I love what they played with. And take a look. First seven days is free. You got the coupon code. Make it happen. In the podcasts I work with and in the, for lack of a better term, professional circle that I deal with, most of the podcasters except a few who kind of teach how to do this. So I don't know if that counts as much. Don't take ads. For many of the reasons that I spoke to earlier, they don't want to distract the message. The monetization strategies just are bigger in getting names and email addresses than they are in doing ads. So this is not a world that I'm necessarily familiar with. Now. What's funny is at the same time, a lot of my clients say, hey, Paul, I want to buy an ad on another podcast. What would be the podcast to buy the ads on? Because I want to get that client base. You know, we all know, we've spoken this in the past, that the podcaster already has the podcast religion. They already know how to get a show. They already know the power of podcasting. They already know these things. And so if you're going to advertise a show, it'd make a lot of great sense to advertise on another podcast. Or this way you don't have the knowledge block or the learning that you have to do. This is why the whole podcast interview industry is so tremendous, is because it's just a great way to get more listeners to your show. So I exist in a world few people are playing. In my world, the larger world, obviously there's a lot of people. It's a huge part of the industry. But in my world, a lot of them aren't doing it, although they want to know about ads for the show. So how did I get into this? I've got a new client. Massive numbers when this client launches where ads are going to be worth looking at. And ads was their monetization strategy. And unlike some of us that I spoke to earlier with these dreams of greatness this is greatness. This is decades of greatness. This is proven greatness. And out the door the downloads are going to happen. So I started looking at the industry, I started speaking to those in charge, I started getting the numbers, I started putting all these things together. What's interesting is that when I'm numbers are right, this becomes interesting. Now I've spoken in the past about shows. I spoke to, you know, Bloomberg with startup saying on that fateful episode, you know, good news, 1.5 million in revenue, bad news, 1.6 million in expenses. Even for this particular client, the ads alone wouldn't cover the cost. But what's great is this client's, it's an omnimedia play. The media is going everywhere. So those production, those issues don't come into play. And the entire program could pay for itself through ad insertion and could maybe pay for expansion as well through ad insertion. So it became interesting. And when I started to get to know the people in the industry, when I started running the numbers and that kind of stuff, it became interesting. At the same time, I've got a client who's looking at dynamic ad insertion and what that is. And it's funny, when we do the interview with Dan, you'll hear Dan from Fireside, you'll hear that he is not a fan of dynamic ad insertion. When we bring on Rob, you'll find out that Rob's got some crazy ad insertion technology. So it's not necessarily the end all, be all only option. But I got a client looking at ad insertion, starting running that. And what was interesting was just the tech of ad insertion is going to bring this client, whose monthly bill was far less than $100, to a situation where his bill probably in the next couple of months would exceed $1,000. So you got to pay for that, amongst other things. And looking at that. So I started playing in the space and I want to share with you what I've learned. So then Fireside approached me about advertising on the show. And what's interesting about their approach was that I don't make it easy to email me. I have purposely set up a system where it's easy to contact me, it's just not easy to email me. And that's done on purpose. Because when it's easy to email you, you get put on lists, you get a lot of bulk content, you get a lot of noise, and yet you want to communicate with your audience, you want to interact with your audience. But the second you make it just the tiniest little bit of a jump, you have to jump through. What happens is then the real communication comes through and those who have put you on a big list don't come through. So I open up Facebook one day and on the pro page there's a message from Fireside that they'd like to chat about sponsoring the show. So the first thing was the realization that this is someone serious. Not on a bulk list, not going to be bulk numbers, that type of thing. I appreciated it. Not the first time it's happened. First time it happened actually on Facebook, but I've gotten calls before. I actually once back in the day got a fax from somebody who wanted to advertise on the podcast, which I thought was absolutely hilarious. But this was a serious approach. And the conversation began. And what was neat was the desire was not. I got a lot of money to spend. I got an ad buy I have to get. I need an audience of this size. The idea was, hey, we'd like to reach your audience with the message of what it is that we're doing. Which is. Which is exactly what I want. Exactly what I'd like to see. They realized the niche of what I was doing. And it was never a question of, you know, we're going to pay you this much. It was a question of what would it take to reach your audience. And one of the things that happens in ads and one of the ways that I think ads will become more popular is if the dialogue begins to change out of CPM to some sort of metric for engagement or some sort of metric for interaction. I mentioned the term CPM cost per milli thousand. It's an old. Basically, it's an old newspaper term. But what's interesting is we can move to CPA cost per acquisition, where basically you get paid on an affiliate type of situation every time they gain a new customer. The beautiful thing about that is you can pay a lot more because if you get a new customer and you're making profit, you can pay for that. And you only pay when you've made the profit and that type of thing. But anyway, Fireside approached me. They it was a one off. It was because they realized the niche. It was because they realized the audience. And that intrigued me. Then it was funny, as I mentioned earlier, you know, I was looking at ads for one client, I was looking at dynamic ad insurgent for another client. I'm putting together the season four of the podcast report and I go, you know what, let's give it a try this season. Niches is why podcasting is so powerful. The broad podcast Is, you know, I mean, definitely the money coming into serial is not a bad thing, but those are the one offs. There's going to be a couple of dozen of those. You know, in the grand scheme of things, the niche podcast, the podcast that specifically relates to a specific audience with a specific message, that's where the future of this industry is. And the ads that can go to that in the future of this industry are really, really interesting. I have been approached already since Fireside with reaching this audience, realizing that the niche, this audience, you, the podcast, are looking to do great business with your podcast. This is an audience worth paying more than traditional to access. So make it about the niches, think about the niches and it becomes interesting. Now, what I've learned so far, some talking points, if you were to this industry. Number one, there's a big spectrum of what you end up taking home. You know, there's the old adage, it's not how much money you make, it's how much money you keep. I mean, the fact of the matter is there are organizations out there who will do your ad repping for you because you don't want to be making the phone calls, you don't want to be doing the negotiation, you don't want to be doing these things. And you know, it's an agent, just like a book agent, just like a movie agent and that type of thing. There's a big range of what people will take. I've heard large organizations from 50% to 20% and you know, I mean, that's a significant chunk of change. Of course, in the Fireside situation, they came to me directly, so nothing went to an agent, which certainly made things interesting. But the spectrum of people who will rep you is pretty huge now. Be careful. Well, that's why I'm only going to rep myself. I get that idea. But many of you, your editing is being done by someone else, your marketing is being done by someone else, your websites are being done by someone else. Your ad repping should be done by someone else. Your purpose as the podcaster is to reach your audience with the message. Anybody who can help you do that, A, deserves to be paid, but B, you definitely want on your team big spectrum of what people are willing to rep you. People are willing to bargain, people willing to negotiate, you know, on the smaller things, obviously, if it's an audience who's like, you know, if it's a client who's like, Well, I got $10,000 to spend on podcasts, I want to get as many as I can for that money, A, I don't even necessarily know if that's a big deal, but B, you're not going to get negotiation there. So think about that. Play with that. That's very, very interesting. And then the other thing that I've learned, and this is really important, is for a while I've been saying, maybe even complaining, and I'm going to stop that, you know, that the other side has to have more realistic expectations. Well, here's the thing. The podcaster has to have realistic expectations. Well, both sides really need to work on managing the expectations in the ad game to do something that is truly the win win. You know, if you are in charge of your message, if you are in charge of your market, if you are in charge of your media, you need to be in charge of the way ads are done. But then again, at the same time, the person who's putting the ad on your show, certainly. Well, first of all, don't be the guinea pig. Only deal with people who know what works. Be in a situation as to where, you know, you meet their expectations as well. And it can be at an interesting place. Some of the ads out there, some of the services, you know, kind of claim, oh, just sign up your show and we'll throw in ads and it'll make sense. No, be careful with that. Market to message match is absolutely key. Both sides need to manage expectations. Okay, Paul, so what's the end game here? What are you doing? The podcast report has always been about examining the industry, learning from the great. Some of the interviews that we have coming in future episodes you're going to love. I will have learned as much as you will have learned. And that's part of why I do this show. We test technologies here, we test mechanisms here, we test ideas here. And definitely in season four, we're going to be testing advertising. I promise. I will share with you my thoughts when all this is over with. We'll probably close season four with a the good, the bad and the ugly, if you will. And if you're listening to this in the past, jump ahead to whatever the end of season four is. And that can be fun. But I'm intrigued here. The tech is here to do some interesting things. The money for the niche, which is where you are, which is where I am. That certainly makes it worth looking at. And we're at an interesting place now. One of my most successful episodes, one of my most talked about episodes, one of my most intriguing episodes. I don't know what the right term is. You want to use the metrics for this show and its success are obviously very different. But was the show I did with Ed Rush about buying an audience, how Ed Rush spent some money, bought an audience for his fishing show and then immediately didn't build it, didn't spend time growing it, you know, bought it. And that's an interesting place. And here's the thing, if you put ads on your show, you know how much the show makes. It's an easy metric. And here's the thing. If you can buy people, if you can buy listeners to your show for less than you can make from your show, this game gets to be really interesting and becomes a very, very interesting product of arbitrage or that type of thing. Certainly an element of the industry to look at as well. Now, I want to be very careful and I want to very specifically say that you cannot buy people into a niche. This is not a game of manipulation. This is not a game of convincing people to take something they don't want to take. This is a game of if you have a market that you've got a message that is going to make you money through the media of podcasting, you definitely want to find as many people as you can in that market to listen to your show, because that's where the money is going to come from. So spending money on that makes a great deal of sense. Now, of course, forcing someone into your niche, forcing someone into your message who's not there to learn it is going to be a waste of time for you and it's going to be a waste of time for them and is something that you should just not ponder and not even think about. But I definitely want to explore this idea of buying an audience, and we'll be exploring that. And part of that is knowing the value of the show and this interchange. Some interesting things that you can do. I mentioned this earlier. I'm going to do ads through the end of this season. We'll see what it looks like. If you're interested in getting your ad on this show, you can email the podcast reportoutlook.com or you can contact me through any of the social ways that we do this. Now, this is your first show. I would definitely recommend your first episode. Definitely recommend going back to episode 115, which would be the podcastreport.com 115, to see what's doing there. I would love to hear your thoughts on this. So let's give out all the numbers. Thepodcastreport.com 116 for this episode, there's a place to leave Comments there, you can go to the podcastreport.com Facebook, Twitter, those are the two main social ones that we're on. If you want to interact with me there, that's a great place to do it. Would love to hear your thoughts, would love to further the conversation about this. And if we start that conversation, let me know what kind of numbers you're looking at. Because if your numbers are really, really low, if you're, you know, you're going for the deep impact but not the deep downloads, then ads gotta pay really, really, really deep and be interesting. It's definitely gotta be part of the equation. So ads this season, at the very least, as a means to establish value, as a means to get more revenue, as a means to figure out what you're doing. That's what we're going to play with here. What's interesting is in my model of market money, sorry, market, message, money, media, all too often the money is not going to come from ads. It's going to come from how you serve that audience. So the money from ads takes one of two roles. The money from ads comes from, will it help you serve your audience? Now, what's interesting is with Fireside. Got a comment on Facebook. Hey, Paul, I'm intrigued with Fireside. I want to take a look at it. I'm helping podcasters do great business with their podcast. Well, look at this. We're at an interesting place and they have got a chance to try something. I made an introduction, I made a couple of bucks. I do more and more of this and we could be at a really interesting place. However, if I distracted them from what it is they're trying to do, if this person is one of these ones who jumps from host to host to microphone to microphone and never launches, I've actually done a disservice and I'm not quite sure where it's going to go, how it's going to be, but that's kind of the approach here. So join me on this journey. I have not jumped in full force. Ads are now the future. I'm just seeing the benefits. I'm seeing the opportunities. I'm seeing the power. So I wouldn't be a good reporter of this industry if I didn't give you the honest truth on what's going on and if I didn't explore it. So thank you for listening to the podcast report. My name is Paul Colligan. ThePodcastReport.com 116 for all the good stuff. You can reach out to me by email atthepodcastreportlook.com or through all of those social interactions between now and next week. By the way, next week we've got Michael Stelzner from Social Media Marketing World. He killed the show. One of my most popular episodes in the past was when he added the show. Well, they actually killed that show and I thought it would be key, vital to bring him on to talk about what happened there and then we'll chat a little bit about what he's trying to do with Social media Marketing world this year and I think that should be fascinating. The week after that we've actually got Dan Benjamin for Fireside which should be fun. And then episode number five, I've got Ed Dale, old friend boy. He's going to bring a contrasting model to podcasting that I think will set a lot of you abuzz with ideas and concepts for doing great business with your podcast. So between now and then do some great business with your podcast. We'll chat next week by.