by: AskPat 314 Episode Transcript
Pat Flynn: Hey what's up, everyone? Pat Flynn here, and welcome to Episode 314 of AskPat. Thank you for joining me today.
All right, now let's get to today's question from Kris.
Kris: Hey Pat, this is Kris Shepherd from the Successful Performer Cast at SuccessfulPerformerCast.com. And I have a question about advertising on podcasts specifically. And my question is, how do you know when to advertise? I mean how many listeners should I have? How do I know what to charge for advertising for things like sponsor reads and things like that? Pat, I would appreciate any kind of insight you could offer on this. Thanks for all you do.
Pat Flynn: Hey Kris, thank you so much for the question today. And this is really important because a lot of people a starting podcast and a lot of people want to know how to monetize it. And there is nobody better who I know has better monetized the podcasts that they have than John Lee Dumas from Entrepreneur On Fire. So I recommend you actually head over right now, everybody who is interested in podcast sponsorships. And I am going to give you my experience too. But I am going to share sort of the industry standards from an interesting post that he has written, which is the ultimate guide on podcast sponsorships. If you go to EntrepreneurOnFire.com/podcast-sponsorships, there is no better resources on this out there, on the web right now. EntrepreneurOnFire.com/podcast-sponsorships, and there is a little section I want to talk about real quick.
It involves the different kinds of audio files and advertisements that you can have and also the cost. So this section which is called industry standard for podcast sponsorships on this post. The industry standards. There's different types of lengths of episodes or of advertising for example. And there are different places within your podcasts where you can have your advertisements so there is before the podcast starts which is called your pre-roll and there is the section in the middle of your podcast called the mid-roll and then there is the section after your podcast call a post-roll. You can have any combination there of. Although you have to make sure that you are still providing a good experience for your listeners.
That was a main reason why I didn't get started with podcast sponsorships until episode 96 of the Smart Passive Income podcast and actually that's a great resource too. So if you go to SmartPassiveIncome.com/Session96, you will hear a direct conversation with myself and John Lee Dumas himself (Entrepreneur on Fire) about podcast sponsorships and things to look out for and how to manage all that stuff and why I eventually started to do sponsorships. Now I am getting to a point where I am making quite a bit of money through podcast sponsorships and I have yet to hear any real complaints about any of it because they are companies that I have aligned myself with that I trust that I know will help my audience out, and that are super cool and I am happy to work with. So, again, making sure the sponsors align with your audience is probably the most important thing for your audience, for yourself. Someone who is serving sponsorships and also for the sponsors themselves. They want results too. I mean you are putting them on your show in front of your audience to help them as well. Or else they won't be working for you for very long.
So let’s talk about this very quick your pre-roll. You can have them in various amounts. Any of the spots in your show, you have varying lengths so 15-second pre-roll, for example, or 30-second pre-roll, or 60-second mid-roll or post-roll. For those of you that listen to Smart Passive Income, you know that I do 60-second post rolls. So I've made sure to, and there is a lot of debate about this whether you should have a pre-roll, mid-roll, or a post-roll. For Smart Passive Income, I am really particular about how the show is perceived especially by first time listeners. So I don't have any post-roll or mid-rolls in that episode which does decrease the amount the money can make but I have been able to strike deals with companies to have just only post-rolls. And those have been doing really well. My thinking is that well if somebody mentions the sponsor at the beginning or the middle of an episode well then comes the content after that and then you kind of forget about that. So I think the post-roll is just as important.
So if you wanted to pitch that to a potential sponsor you could but I do know that in industry standard they do prefer a pre-roll and mid-rolls are great too. And if you listen to any or most podcasts with sponsors that's generally how it goes. It's your show again, so you could do whatever you like but again check out EntrepreneurOnFire.com/podcast-sponsorships. There is a lot of great content here. You can listen to sample things on John's show to see what these ad spots look like.
Now in terms of how much you might get for these ad spots, it varies on the type. And the terms that I want to talk about really quick are CPMs. CPMs means “cost per milli or thousand,” so cost per thousand views. this is what is used typically in the podcast world. So for example, 15-second pre-roll can command about $18 per 1,000 listens and a 60-second mid-roll can command around a $25 CPM. Again every 1,000 listens gets you $25 so if have a 1,000 listens, you get $25 if you get a 60-second mid-roll in there. If you have 10,000 listens, you can times that by ten so $250 per episode. So, for example, you work for a company and you have a 15-second pre-roll and this is again an example used in John's article. If you have one company who you are having for a sponsor with a 15-second pre-roll ,which is again $18 per 1,000 listens, and then $25 for the 60-second mid-roll, that's essentially $43 per episode. 18 + 25 for 1,000 listens, so 1,000 is $43. Well, if you have 10,000 listens, that would cost the sponsor $430 for that pre-roll and mid-roll combo. You can structure it any way you want but these are just some baseline numbers you can use.
Let’s say you have two sponsors per episode. So two 15-second sponsors up front at $18 each per 1,000 CPM, and then two mid-rolls at 60 seconds each at $25 per 1,000 CPM, then you can multiple that 430 by two because you have two sponsors. So $860 per episode. So if do four episodes per month you would get $3,440 at 10,000 listens.
(Also, while you're here, if you'd like to start a show of your own, click here to learn how to start a podcast!)
Well what does listens mean? This is another thing you have to realize. Companies will typically ask for the number of listens per episode. What does that mean? On that day it comes out or after a year, what is it? Typically it's after six weeks so you can go back into Libsyn or SoundCloud and check what your average is for episodes after six weeks. For episodes that have been alive for at least six weeks. And so for me if I were to recommend when should I start to have sponsors on your podcast, it’s very difficult to do it on day one. Even with an audience it’s difficult to do it from day one because they want to see how many listens you get per episode. And it’s hard to do that when you are just starting out.
Now when I started AskPat I already had a podcast with X number of downloads, tens of thousands of downloads. And starting AskPat from scratch, it was very difficult to get sponsors right at the beginning which is why you will see in the first few videos of AskPat there were no sponsors. But I did train my audience to listen to sponsorships and get involved with taking action on those thoughts and the fact that there would be some sort a pre-roll and post-roll in AskPat by sharing my own resources, links to certain articles on my sites. Affiliate things and things like that but I never mentioned sponsorships until sponsorships finally came on board. So yeah, once you see that every episode is over a certain number of downloads by week six that's your CPM. That's what John recommends, and you can adjust this as often as you like. He adjusts it quarterly. Sponsors only care about how many downloads you are guaranteeing for the specific episode. So go to your stats, look at the downloads per episode, and use that to find your CPM. Now there are a few different models that I am not going to go over now because that is the most common that's used, what I just went over. Again EntrepreneurOnFire.com/podcast-sponsorships is definitely the best resource that's going to help you.
Again, when do you want to start adding sponsors? Well you don't really have to worry about getting to 10,000 to do that. I mean, a lot of people think they have to get to that point before they start. But you can start beforehand because of the model, the CPM model companies are paying for every 1,000 so even if you have 1,000 they could potentially pay you if they are interested in working with you. You will never know unless you ask, and if you have a very highly targeted audience then they might be very interested in what you have to offer.
You can run test runs too, in terms of the contracts you are going to create and John has a lot of sample contracts and things you could resource at EntrepreneurOnFire.com. But again, one thing I like to do, especially if companies are sort of like, “well I'm not sure.” You know, “hey let’s try it out for one or two episodes and see what the response is like and then if you like it from there we can strike a deal for much longer and I'll give you a discount on that,” for example. I'll often do that myself when a company decides to go on board I'll maybe give if they book two months worth of sponsorships, which is for Smart Passive of Income. About eight episodes I'll throw in an extra episode or something like that. Just to guarantee that longer contract. Actually three months then I guarantee the extra one because that is quite a bit of money. Especially with the downloads that I have which are going between 80,000 and a 100,000 per episode.
So you can see that once you get those listens and those downloads it can be very lucrative. And that is why I think sponsorships are potentially an important part of your podcast, especially if you have an audience and you are looking out how to monetize. There are a lot of companies willing to pay quite a bit of money to make sure they get out in front of the right audience. So making sure you know who your audience is and that you are able to connect with companies that would serve them. I mean it is going to be a winning combination but those are the models you would use and, again, you shouldn't wait to long to get started. I would wait after six weeks if you have over a 1,000 downloads. You know, give it a shot. You that's why I would start then grow form there.
So I hope that answers your question, Kris. And I really appreciate this. I think it’s going to be very helpful for a lot of people. Hopefully we will send over a lot of people to John's site about podcast sponsorships because that is completely the most useful resource out there on this particular topic. So again, thank you Chris for this question. An AskPat t-shirt is heading your way for having your question featured here on the show. For those of you listening, if you have a question you would like potentially featured here on the show just head on over to AskPat.com and you can ask right there on that page thanks to SpeakPipe.com.
All right and here is a quote to finish up. This is from Bryan Eisenberg. He says, “Never forget social media is for reach but email is for revenue.” Cheers, take care, and I'll see you in the next episode of AskPat. Thanks guys.