How to Price Your Podcast Advertising Options

0:01
Most podcasters want advertisers for their show. But are you really prepared if an advertiser were to approach you? What type of advertising options can you offer? And perhaps more importantly, how do you price these options, so works for both you and the advertiser. If you feel a little confused about how advertising works with podcasting, then this is the episode for you. Take it away, Mr. radio man. Podcast Your Business.

0:38
Hey, everyone, and welcome to today’s show. This is Podcast Your Business. And I am Sunny Gault. I’m a podcast coach and mentor and I’ve been podcasting for 17 years. I’m also the founder and CEO of a company. It’s called Independent Podcast Network. Please check us out the website is https://independentpodcast.network. And we help all types of podcasts. We have a ton of free content on our website. And we also help podcasters get advertising deals. Today, I am here to help you create amazing podcast specifically for your business. And we do this by mastering the five Ps of podcasting. Yes, if this is not your first rodeo, and you’ve listened to episodes of podcast your business before you hear me talk about this, in every episode, the five Ps this is something that I created, and helping brand new podcasters learn how to podcast because I believe if you master these five P’s, then you’ve mastered podcasting, and you should be able to make your podcast successful. So what are the five P’s? We start with prep? This means asking yourself some tough questions. Should you even start a podcast? Why are you doing this whole podcasting thing? Why did this even cross your path, right? And then plan? What is the look and feel for your podcast? What’s the overall format for it? How often are you going to release episodes, that whole thing, produce is creating content, whether it’s audio or video, and all the little minut details that are involved with that promote is telling everybody about it, because you could have the most amazing podcast in the world. But if no one knows about it, I say this all the time. It’s like it doesn’t exist. And then finally, the final P is profit. And that is making money with it. Whether you are working with advertisers, which is something we’re going to talk about today, or perhaps you’re using this to draw in clients for your business, it just needs to make money. Maybe this is an advertising tool. So you can mark it up in the advertising column in the marketing column for your business. That’s fine, too. But we need to be making money somehow with our show if this is tied to our business. So Mr. radio man, what are we talking about today? Profit.

2:53
Ooh, did you hear that little cha ching. That’s right. We’re talking about making money today. But before you can make money with your podcast, you need to know exactly what you’re offering. Advertisers, like I said earlier, think this through, you will also need to figure out how much you’re going to charge advertisers for whatever it is that you’re offering. And you also need to know where you stand on your pricing options. Are you firm? Or are you flexible? So here’s some of the things we’re going to talk about today. First of all, I kind of want to provide an overview for you guys, of the amount of money that is currently spent on podcast advertising, as well as a forecast. Now as you know, things can change. But you need to know where the market sits right now. We’re also going to talk about common ways podcasters make money with their show what works, what maybe doesn’t work as well. And then we’re gonna get into the pricing, how do you price things like podcast ads, and some of the other advertising options we’re going to talk about? And then I’ll give you some tips for meshing these together into what I call packages and grouping them together. Because that is another way to kind of hook advertisers you could ever, you know, offer everything ala carte, sometimes that doesn’t work, right? We’re trying to make this as easy as possible for advertisers. And then I just have some general tips on how to secure podcast advertising deals. So we’re gonna get going on all this right after this quick break. So how much money is actually spent on podcast advertising? In the past, you guys have heard me talk about a group. It’s called the Internet Advertising Bureau or ay ay b. And they set a lot of standards for internet advertising. Okay. And it’s the name in podcasting. You hear it referred to a lot when they’re creating rules around what constitutes a download or an impression that’s been kind of a hot button issue in podcasting. So you’ve heard me talk about them before the IAB. So I have some stats for you based on information from the IAB in 2022 because right now we’re in 2023. I can’t quite give you firm numbers. Right, we’re only halfway through 2023. But in 2022, the podcast industry saw a 22% increase in advertising revenue from the previous year. So from 2021 to 2022. So the next question is, okay, well, what’s gonna happen this year? What are what are we seeing happening right now, I wish I could paint a rainbow, magical land for you guys where there’s unicorns and cotton candy everywhere. But that is not personally what I’m seeing in 2023. When the economy is down, and when people are concerned about money, they pull back on their spending. And if you’re a business, a lot of times, what happens is you end up pulling back on your advertising revenue. So personally, what I am seeing so far this year, and I really hope there’s a turnaround, but I am seeing less money in the space. Now. That’s my own personal experience.

6:03
But if you look at the numbers from the Internet Advertising Bureau, they are saying that it is going to increase this year, I’m a little doubtful that that’s going to happen unless we have a bang up, you know, third and fourth quarter, then maybe it’ll change my mind. But right now, I don’t see that. The IAB is predicting a $2 billion advertising spend for podcasting in 2023. That’s a lot of money. And then they’ve even projected out a couple more years. So this year, they say is going to be 2 billion. In 2024, so next year, 3.2 billion, and then in 2025, 4 billion. How are they coming up with these numbers? I have no idea. You know, is it like a wing and a prayer, maybe I like to think that they have a little bit more oomph behind their numbers, but I don’t know the criteria that they are using. But I do know that everything is dependent on the now okay, things can change. So whatever factors that they were considering, just know that life changes, things happen. Wars happened. And you know, governments go belly up like this is a very real thing that is happening all around the world right now. So this is their projection. Do I believe it? I want to believe it. I am cautiously optimistic. Let’s put it that way. Okay. So that’s where the industry is right now. Now, just a little caveat here, you don’t have to work with advertisers. There’s a lot of different ways you can make money with your podcast, we did an episode on that. But today, we’re specifically talking about advertising. So you know, I don’t want to discourage anybody, I just want to be very real with what we’re seeing right now. But those are the projections. Now, let’s talk about some ways podcasters make money with their show. Okay, that was specifically with your podcast, you can do a bunch of other things. But I’m really talking about your podcast here. You can do podcast ads. Yay, you guys already knew that. Right? That’s the first thing people think of. And there’s some different factors here, right? We talk about dynamic ads versus baked-in ads. Dynamic ads are inserted dynamically through some sort of technology or tool and they can be removed at any time. You’re baked in ads, you record them usually into your podcast, you can record them later, but you edit them in so you can’t really remove the ads unless you physically go in there and edit the episode again. So those are your options when it comes to podcast ads, and then within. So it doesn’t matter if you’re doing dynamic or baked-in ads. But within your episode, you have pre-roll ads, you have mid-roll ads, and you have post-roll ads, pre roll ads happen usually before the show even starts. Those aren’t quite as long. You know, they’re about 15 to 25-30 seconds, your mid-roll spot. So this is the coup de gras. When it comes to advertisers. Most advertisers want their ads embedded in your content. Because people are listening, they’re kind of caught up in what you’re saying they really like you. And then they hear an ad. So advertisers think that that’s the best way usually for their content to be heard. So they are willing to pay a little bit more for that. And those ads are usually longer. So in mid roll spots, they’re usually 30 to 60 seconds. If you’re working with an outside agency, usually it’s 60 seconds. I have had a couple of ads, where I’ve worked directly with advertisers, no third party people involved just the podcast and the advertiser. And that’s when I’ve been able to sell the 30 spots, the 32nd spots. And then you have post rolls which is kind of no man’s land because not a lot of advertisers want to do post rolls. A lot of times when When people are listening to a podcast, they’re not going to listen to the very, very, very end, right? Because you’re kind of wrapping things up, they think they know what you’re going to say. And then they check out. So I have seen some programmatic companies run ads and post rolls. But like I said, it doesn’t happen all that often I, I’ve never heard of a direct sales advertiser saying, I want a post-roll ad. But let’s just throw it in there. Because I know, programmatic, some programmatic companies do the post-roll ads. Okay. So those are your podcast ads.

10:35
You can also have an advertiser on an episode, that may not be what works for your format. There’s a lot of podcasts on our network, that when those kind of advertising opportunities come available, they always turn them down, because it just doesn’t work for their format. Now, with my parenting shows that I typically produce, it works pretty well, if the advertiser is a good fit for new and expecting parents. So we have had diaper companies on, we’ve had prenatal vitamin companies on and if the company is big enough, sometimes they will have their own expert. And it’s really easy to just kind of insert them into your show, you know, so for example, we had a baby bottle company that had a lactation consultant that was on staff. So it was really easy to invite the lactation consultant on the show to talk not only about baby bottles, but how breastfeeding works, while you’re also sometimes feeding your baby with a bottle. And we just we made a work where it was very natural, right. So again, some of the bigger companies you could get experts on, it’s a little bit easier, but people will pay for that. So that’s one side of it. I have also seen podcasts charge for every guest opportunity. In other words, you’re not getting on that podcast, unless you’re paying them some money. Okay, I definitely have an opinion about this. I’m not a big fan of that model. And I think it’s because deep down, I believe podcasting should be free to audiences, you know, you pay for everything else in life, I just feel like podcast should be free. And there should be other ways that we make money. I don’t know, I just I feel like it’s a little shady. I’m just going to say it, I don’t completely agree with it, I know that there are some podcasts that make a lot of money doing it that way, and good for them. It’s not something I would do with my show, I want to have the best guests period, I don’t care if you’re paying. I feel like I owe that to my podcast audience. So that’s my particular take on it. But I’m just putting it out there. Because you could pay, make sure all of your podcast guests paid to be on your show.

12:51
Okay, there’s other things you can do within your show as well. You can do segments. So I’m a big advocate of having segments in your show. So when you look at your overall show format, is it just like one long thing, right? Like one long interview? Or do you divide up your show, so you’ve got like, little kind of breaks or segments, you know, it just changes up the flow of your show. So for example, in my parenting shows, I would have I don’t really do this that much, okay, because the episodes I’ve just shortened them and, and changed the format around a little bit. But originally, after I welcomed everyone to the show, we would have segment number one. And segment number one, it varied. I have had a lot of segments we could choose between, but maybe it was like a news headline segment. So if we were if this were for the Pregnancy Show, we would bring up some sort of article or news story that had to do with pregnancy. And we would talk about it a little bit. And this is before we get to the main content of the show. So I’ve done that before. And I’ve also offered to have companies sponsor those segments. They could have their guests come on, I did this with a babysitting company once. So not only did they sponsor the segment, but they also had an expert and I worked with them on the content. By the way, I never recommend that you let an advertiser run away with the content. So never be like sure, you can do this segment on our show, just write it up and we’ll record it tomorrow or whenever. Don’t let them have that much say on your show it. It needs to be a collaborative effort, because you need to make sure that what you’re saying works with them and vice versa. Okay. But that has worked for me before. And what I like about this too, is that you’re still providing quality information to your audience. It’s just it’s a branded segment. That’s all it is. So maybe at the beginning of that you say Okay, today’s diaper segment is brought to you by pampers and then say their tagline and then you go into some, you know, diaper tips, right? So you’re still helping your audience and whatever it is, so you can do segments.

15:01
I’ve also done sponsored videos, and have also put those videos up on YouTube. So it exists on the website as well as up on YouTube. Now, I don’t have a huge audience for videos, really, the podcast episodes are the bread and butter, at least for my shows, Your situation may be different, maybe you already have a pretty big crowd that’s, you know, watching your videos, then you might be able to charge a little bit more, you know, and that then that’s, you know, something to consider as well. But you could do videos, you could do long videos, I’ve done really short videos as well like five minute tips for parents, things like that. So you can be creative, sponsored posts, and I mean, blog posts and social media. So I’m not on social media, it’s just not my jam. But I do offer advertisers blog post. And what I do with that is I will work with the advertiser to figure out what the content is going to be, and what what it is, ultimately, they want to promote. So I usually let them have some links within the the blog post, that will go back to their product and you know, talk about ways that people can purchase the product, things like that. But then I have an outside blogger actually do the writing. So that’s what I mean, when I say work with the advertiser, but don’t let them run the show. After you’ve been podcasting a while, you may start to get these emails from people saying, hey, I want to do a sponsored post for your site. And I’ve already have it written up and you just need to include it. I never, never take advantage of those opportunities. Okay? Stay in control of your content, work with the advertisers, but do not let them run the show. You could do sponsored newsletters, again, it’s kind of dependent on how big your audience is, you know, if you have a lot of people, you know, maybe your newsletter came from somewhere else, you know, maybe that’s what you did before you did podcast, and you’ve got 1000s and 1000s and 1000s of people subscribing to your newsletter, obviously, that is more attractive to advertisers. And you can even do events, there is a podcast that is on our network that does comedy shows. So live comedy show. And the advertiser could sponsor the live comedy show, which I think is really cool. I would encourage you guys to think outside the box. Because podcasts are so I mean, they’re so influential, they can be at least right. So I encourage you to be creative. And then again, go back and listen to that one episode. Because I really do go in depth of different ways to make money with your show. But at least now you’ve got some additional ideas how to make more money within your podcast, write those segments, things like that, that you know can really help you.

17:45
Okay, let’s talk about how to price podcast advertising. And we’re gonna kick things off by just focusing on podcast ads, because that’s the first thing everyone thinks about. And it also doesn’t require you to create any additional content, you’re already doing your podcast, right? When I give you guys these numbers, we’re talking about direct sales, advertising options, okay, not programmatic, there’s a difference. So direct sales, you’re working directly with the advertiser, sometimes there’s a third party person negotiating the deal for you. But you’re usually voicing your own ads, you’re getting bullet points from them. It’s a more personal experience, a lot of times you’re getting the product, so you can test it as well. That’s direct sales. Programmatic is entirely different. Those are ads that are put on your show, a lot of times you don’t even know what advertisers are running. You can do exclusions, usually. So oh, I don’t want to work with any, you know, alcohol, advertisers, you can exclude certain things like that. But when I’m talking about the pricing, now, I’m referring to direct sales, you’re gonna make most of your money in podcasting. through direct sales, not programmatic programmatic, I like to compare programmatic to like hotels.com. You guys know what that is. So if hotels haven’t sold their rooms on their own, then they can sell them on hotels.com. Now, they don’t get as much money, but at least they got something. Well, that’s kind of how programmatic ads are. It’s like, yeah, I would prefer to have a direct sales ad. But it didn’t happen this time. So at least I’m getting something. Programmatic ads are usually at least 50%. Less like you make 50% less money on programmatic ads. And sometimes it’s even way less than that. But you are getting something as opposed to just letting the ad spot go and not making any money. In all of the podcasts that I produce. The podcasts are really my bread and butter, meaning I may offer a blog post, I may offer videos and things like that, but really everything is supported by the podcast. That’s where the audience really is. And so that may be the case with you So when we talk about podcast ads, a lot of times CPM comes up this acronym. So CPM stands for cost per mile. And mille is Latin for 1000. So you’re talking about the amount of money they’re going to pay you per 1000 downloads. Now, some of you that are listening to this are going, Wow, that number better be a lot, because I got 100 downloads last month, don’t be discouraged by what I’m about to say, Okay. Again, there’s other ways to make money with your show. And I’m sure your audience is going to grow. But where we’re at right now, with the podcasting industry, here are some standards. So for pre-roll, the ads that play before your show starts, the industry standard is $15 per 1000 downloads. So that’s a $15. CPM. Mid rolls are about $30. And honestly, that’s a little on the high side, I would say $20 to $30, per 1000, downloads and post-rolls, I think they were just being nice. They said $10. This is some information I found online from the Internet Advertising Bureau. They said $10 for a post-roll. But you know, CPM, I would be shocked if that’s really the case. Because again, most of those are just programmatic ads, direct sales are not going to be interested in post roll ads. So those are the standards. And I know what you’re thinking that is low. And you’re right, that is low. I want to encourage you though, if you’re going after advertisers, who really fit within your podcast niche, you can charge more. So for example, when I am talking to an advertiser for my parenting shows, and they are in the parenting space, then I definitely charge more than the numbers that you just heard. So for a mid roll, I would probably charge at least $40, if not more, so the number I just gave you was $30. And I said, it’s more like 20. Well, I make sure I get at least $40 From that, unless it’s like a deal breaker for the advertiser. And I really want to work with them, you always have that kind of flexibility. But what you put out there, as far as your prices are concerned, just know that you can charge more. If you have a niche podcast, and they want a niche audience, you’ve got something they want, right? So that’s leverage in this business. So that’s podcast ads.

22:32
When it comes to social media and newsletters, I think that kind of follows the CPM model as well. So if you’re trying to figure out how to price that, again, social media is not my thing, I’m sure you can find plenty of information online about how to price social media, but it really is about how many people are going to see your post, right? Same thing with newsletters. Now, if you’re creating additional content, so we’re talking about the segments that I talked to you about earlier videos, blog posts, and of course, if you’re gonna do like this whole big event, where you know, there’s a venue, there’s a lot of things involved. This is the criteria that I use to come up with a price. First of all, CPM is part of that, you have to have some sort of baseline like, okay, X amount of people are going to see this or hear this in some fashion. So that’s your CPM. But that’s only one of three parts. I also factor in the cost that it’s going to take to create it. And that has nothing to do with CPM. I just know, okay, if I’m doing this, then maybe I need to think about what my hourly rate is. Or if you’re having an editor and the editors involved, what are they charging, figure out all of your costs, and add all of that up. And then I also recommend that you do a 20% markup, once you add up your CPM, and the cost it takes to create it. Why 20%? Because you need some padding here for a couple different reasons. What if something goes wrong, and you need some additional funds in order to complete whatever the advertising option is, let’s say it’s not the advertisers fault, okay. But something, something happens, you know, an episode went over your editor charged you more money, whatever the case may be, it’s just important to have a little more padding there. I also think that your business because again, this is called podcast, your business, your podcast needs to benefit your business. So not only should you or whoever be getting paid for the services, but your business should profit from this. So you need some additional funds in there. So that can happen.

23:46
If your head is now spinning, thinking of oh, she just gave me all these advertising options, and I gotta add 20% and this I’ve got some good news for you. This is what I typically do because I’m not a big numbers girl. If things get overwhelming, this is how I break it down. I have podcast ads and I always recommend that if that’s your bread and butter that you allow people to just buy podcast ads, but then I lump everything else together. So I create packages, I group these options together. For example, you could group together podcast ads with a blog post, with social media. Or maybe you don’t want to do social media and maybe do a video instead. So prepackaged some stuff, because you would be surprised at how many times advertisers look at that and go, Oh, well, that’s nice. Oh, yeah, I could use that I could do this. And look, she or he set everything up. For me, I don’t even have to think about it. So I do recommend that you grab these things, you put them together, but then always still have your podcast ad separate. Because there are some people that just want to do podcast ads. And again, I’m assuming that is the main thing that you’ve got going on that that’s where most of your listeners or your viewers are coming from. And finally, real quickly, I want to go over some tips for getting podcast advertising deals. The best way I have found to get advertisers Believe it or not, is to create a media kit and put it on your website, you have no idea who is finding you online. So if they go to your website, and you don’t have something about advertising and how people can work with you, that is a missed opportunity. And it is a huge, usually, I don’t know if that’s a word, a very big missed opportunity. So create a kit, put it on your website, I’ve heard different things and different points of view about including prices in your media kit. So this is what I would say to you, if you’re willing to negotiate on your prices, then do not include prices in your media kit. Because what happens is advertisers see those numbers. And if those numbers don’t work for them, they may never reach out to you. So I would say don’t include the numbers, let them reach out to you and then talk about it. Maybe by the end of the conversation, they end up loving you and are willing to pay those prices. But if they didn’t reach out, then you wouldn’t know.

23:46
I also recommend that you have on the ready examples of things and advertising options that you talk about in your media kit. So if it’s a podcast ad, they may say, Well, what does it sound like? Can you send me a sample. So make sure you have those kinds of things ready to go. I also have that for videos that I’ve done, I have sample links, I can send them for blog posts have that at the ready. You also need to know what your ad inventory is. So if you’re working with multiple advertisers, you need a quick and easy way to know at a moment’s notice. If you can do this deal with the advertiser, they may want to book out six or more months in advance. So you need to know what your inventory is. You also need to reply really quickly, it drives me crazy when I reached out to a podcast about an advertising opportunity and it takes them like a few days to get back in touch with me, that is far too long. You almost need to have this on speed dial. Okay, whatever the email equivalent of that is, you have to be able to respond super quickly. Advertisers usually make decisions pretty quickly. And if they think that they can’t get in touch with you, you’re not going to get the deal. I also recommend knowing what your bottom line is. So if you are willing to provide discounts and things like that, how low can you go. And I don’t mean that in a bad way. Like, I’m not trying to get you guys to go down to the very bottom here. But know what your cut off is. I’ve also found it very helpful to try to make the deal timely. This is really helpful if you’re reaching out to advertisers. So for example, I had an episode coming up and it was about music and how music can help soothe your baby, right? So call it going to sleep, things like that. And I thought, oh, it’d be really good to get an advertiser that makes one of those lullaby CDs, right? And so I reached out to a company and I said, Hey, we have an episode coming up. But you have to ask now, it was that whole, you know, use it or lose it kind of thing. And it worked. They totally they they did the deal. It worked out really well for everybody. And so if you can make these deals timely, where they need to act soon, or they’re going to miss out, that can be helpful. And then also know how to sweeten the deal. So if you’re like neck and neck with an advertiser, and they’re like, I just don’t know if we can do this, know how you can sweeten the deal and make it more appealing for them. So maybe you throw in some social media posts, or maybe you give them you know, a few extra 1000 downloads. I mean, that may be a lot for your podcast. So it really depends on what your download numbers are. But think about how you can push this over the edge. So you can start to work with people and then obviously just do a good job, be honest with advertisers. Give them the information they’re looking for. If they want stats and things like that, respond quickly. Some of these things we’ve already talked about, but be a good partner to work with. Not only is that going to get you a deal, but it’s going to gig, you know, keep them coming back for more, which is exactly what you want. Alright, we’re gonna take a quick break. We’ll be right back to wrap everything up.

23:46
Today, we talked a lot about podcast ads. And I’ve got a great free handout that goes along with that. It’s called “What to Consider When Writing Ads for Your Podcast. So let’s assume you’ve inked the deal. Maybe it’s just for podcast ads, maybe it’s for that and other things. But you’re still going to have to know how to write these ads. And you obviously want a good conversion, right? You want people to listen, you want them to take action. And this is a little bit of a song and dance right? There really is some strategy behind how you do this. And so I have figured this out, I’m going to show you and give you step by step instructions of what I do when creating my own podcast ads because it works. So I’ve got a handout that breaks all of that down that’s available on our website, https://independentpodcast.network. Go to the website because there’s a ton of free resources, more handouts, weekly blog posts, more great podcast episodes like this one. There’s videos. I have whole courses that are available for free on the website. Until next week, remember, you should start a podcast!