As an association considers a podcast, we often here the question before they choose to implement : “How much revenue can a podcast make?” They want to know what the reward will be before they invest their time and energy growing a podcast audience.
So how much revenue can associations make? To be frank, most make $0. In fact, many podcasts have negative cash flow because they spend money buying equipment and paying hosting fees before they earn a single dollar.
Creative work like podcasting doesn’t make any revenue until people choose to listen to you or you leverage the power of sponsorship. It can time for listeners to decide you have value. So if you’re looking to start a podcast because your associations needs a paycheck this week, you should find another way to earn non-dues revenue.
But if you put in the work to make amazing content, publish new episodes consistently, and engage your audience, you’ll eventually build a show that rakes in revenue each episode.
In this article, we’ll explain how podcasts make revenue and then we’ll review how the highest earning podcasts earn their incomes
How Do Podcasts Make Revenue?
There are actually a lot of ways to monetize a podcast. The most successful podcasts use several monetization strategies so there’s revenue coming in from a lot of different places.
Why should you diversify your revenue? For safety. Imagine if all your revenue comes from one sales channel and then suddenly you can’t access that channel anymore or your organization decides to move away from a relationship or platform, you’re sunk!
Here we’ll go over the top four methods: Sponsorships, direct support including premium content, affiliate sales, and complementary products.
- Sponsorships
Sponsorships are the most common way associations make revenue. This is when the podcast promotes the sponsor during the show.
How much you earn from a sponsor depends on the number of downloads your episodes earn. Sponsors pay on a cost per mille basis (mille is Latin for “thousand”). Rates range from $18 to $50 CPM, though hugely popular podcasts can pull in a lot more.
You can price your ads differently depending on where you place them within your episode. Pre-roll ads run at the beginning of the show, usually for about 15-30 seconds. Post-roll ads run at the end of the show, also for 15-30 seconds. They are worth the same to advertisers.
Mid-roll ads are more valuable because the audience is captive at the time. Sometimes the sponsor will give you a script to read. Other times the sponsor will give you more flexibility.
When you first start pitching advertising, we recommend asking for $15 for pre- and post-roll ads and $20 for mid-roll ads.
- Direct support including premium content
Direct support is when you simply ask your fans to send you revenue to support your show. If your content and personality are good, there are plenty of people who will help support you a few dollars so you can keep producing episodes.
A great way to get your audience to support you is to compensate them with premium content. You could charge them for early access to episodes, bonus episodes, downloadable resources, live chats, or access to newsletters and Facebook groups.
- Affiliate sales
Affiliate sales are similar to sponsorships, but instead of getting paid by the download, you get paid based on what you sell for another company. The other company pays you a commission for each sale.
If you monetize with affiliate sales, make sure the company gives you a simple link that’s easy for you to say and your listeners to understand.
- Complementary products
The fourth common way to monetize a podcast is to sell complementary products. This might include merchandise, courses, consulting services, books, or access to live events. Associations usually have a store set up and this makes a unique addition.
Popular Advertising Networks
There’s no doubt that podcast sponsorships are the most lucrative way shows make revenue. They’re also one of the easiest revenue streams once you finalize a deal with the sponsor. All you have to do is read your ads on your podcast recording according to your agreement.
In fact, sponsorships are the most lucrative way to make revenue from your podcast. According to IAB and PwC, advertisers spent $678 million in 2019 and will spend more than a billion in 2020.
Where do you find sponsorship deals? You can negotiate a deal with any sponsor, but most new associations start with sponsorships by going through a broker. Here are a few places to find sponsorship deals:
- Ad Results Media
- AdvertiseCast
- True Native Media
- Midroll
In the beginning, you won’t have the leverage to demand your own rates. Once your really starts to perform, however, sponsors will begin to reach out to you and you will have more control over what you get.
So How Much Revenue Can Associations Make?
We hear the question “How much revenue can associations make” all the time. As you can see, there’s a big range. While most associations make very little in the beginning, podcast and can be a lucrative career if you stick with it, engage your audience, and consistently create quality content.
