How to Monetize a Podcast: Strategies to Get You Paid
After seeing one too many generic listicles about podcast monetization strategies that lack real-world experience, we decided it’s time to spill the beans.
Can you make money podcasting without alienating your audience and without selling your soul? Absolutely. In fact, Tim Ferriss conducted an experiment with his own podcast that revealed that his audience has an overwhelming preference for the ad-supported model over listener-supported. They trust Tim and they enjoy having him curate products and services for them.
You can achieve a good ROI from your podcast through monetization, or via other methods, provided you do it the right way.
We want to equip you with the knowledge to choose the right option for your situation. After reading through this guide, you’ll have a solid understanding of monetization strategies for podcasts and a clear path forward.
Podcast Monetization: Direct vs. Indirect
Podcast monetization is an umbrella term for the various ways you can earn money from your show. They all fall under one of two sub-categories: direct monetization and indirect monetization.
Direct monetization is the most straightforward form of monetization, and the one that’s most commonly used. In this scenario you receive payment for the content you produce. This could be in the form of advertising, sponsorships, premium content subscriptions, donations, etc.
Indirect monetization refers to income generated from activities such as affiliate marketing, consulting services, speaking engagements, courses, and products, to name a few. Both approaches come with pros and cons, so it’s best to try a few of them and then go with the ones that ultimately work best.
The traditional way to monetize is by seeking out sponsorships with businesses that want to reach your podcast audience. This is because it's extremely valuable for advertisers to find a place where their target audience has gathered and is listening attentively.
Midroll reports that 61% of their listeners say that they’ve purchased a product after hearing about it on a podcast. Having the hosts personally mention a product is a great way to build trust, and a perfect example of the value that podcasts can deliver for their sponsors.
Sling Media ran a split test between traditional radio ads and podcast ads, and they found that podcasts were able to generate 2 to 3 times more engagement.
There are different ways to structure sponsorship agreements. Some advertisers will pay based on your average number of downloads, others may want you to use a coupon code where you’re paid a commission for any sales you refer.
You can find sponsorships by checking out podcasts that have a similar audience to yours and seeing who is sponsoring them. You can ask around in your own business network, attend trade shows and other industry events, and join a podcast network.
Further reading: How to Get (and Where to Find) Podcast Sponsors
Attending industry events is a great opportunity to see who is sponsoring and investing their marketing budget to reach the kind of audience niche your podcast serves. If you can meet them face to face, it can be a lot easier to sell them on the idea of podcast advertising (if it’s not something they’ve considered or tried before).
There are many familiar podcast advertisers with offers that appeal to a broad audience. They’re often promoting consumer products like mattresses, toothbrushes, razors, and underwear.
But, if you’re in the B2B space and your target audience can be defined as senior marketing executives, founders of IT companies, or developers—it'll be more beneficial to find a targeted advertiser who's more closely aligned with your niche.
This is what we most often recommend to hosts of business podcasts, as it makes it possible to garner a good return with fewer download numbers. For example, an accounting software company is likely to value an audience of 100 CFOs and would potentially pay to get in front of them. But, to a general consumer sponsor, you would need a hundred times that amount of listeners to even begin to make it attractive.
If your podcast has a broader audience, and higher downloads (in the tens of thousands, give or take), then a sponsor looking to reach a broad audience could be a good fit.
As a rough estimate, industry average advertising rates suggest that you could earn in the region of $20 to $30 for every 1000 downloads your podcast receives, giving you a cost per mille (CPM) of $20 to $30. Remember, these are just rough averages. The actual earnings will vary greatly depending on the podcast, with some earning much more and others much less.
Podcast Monetization Platforms
Podcast monetization platforms have been around since the early days of podcasting. Nowadays, there are a host of them available, all offering a wide range of services and tools for podcast creators looking to monetize their content.
If you like the idea of having everything in one place in a “done for you” kind of way, it’s definitely worth joining a podcast monetization platform. They provide a range of tools and services that enable you to focus on creating great content, while leaving the monetization and growth aspects of the show to the them.
Examples of these platforms include Podbean, Supercast, Advertisecast, Midroll (now a part of SXM Media), to name a few. Which one you go with will depend on your niche and the size of your audience, as some platforms are better suited for specific types of shows or monetization strategies.
There are also requirements to be accepted to a podcast monetization platform to take into account. They’ll differ slightly depending on the platform, but some of the common things they’ll look at are overall content quality, audience size, and content ownership.
Guest Facing Monetization
Supporting your sponsors is an indirect way for your audience to support your podcast, but some listeners will want to support the show in a more direct fashion. Guest facing monetization simply means that a podcast makes money directly from listeners. This can take various forms, such as subscriptions, the sale of merchandise, and so on.
Fan-funding platforms like Patreon, Ko-fi, and others, are a great way to monetize your podcast. Bar for a small service fee (and sometimes not even), most of the money goes directly to the creator (in this case, you). Your listeners pledge to support you on a monthly (or per-episode) basis, oftentimes in return for exclusive content and updates.
Lime Link compiled an analysis of commonalities between the largest podcasts on Patreon. You can view the full report here, but these are some of the main takeaways:
They all offer bonus episodes to subscribers
Other popular perks included ad-free versions of each episode and free or discounted merch
They all had at least 40 episodes published when this list was compiled
Every one of these podcasts is very active on Twitter, highlighting the importance of connecting with your audience on multiple platforms
Tim Ferriss famously set out on a six-month experiment, where he switched from sponsors to a donation-only model. You can read more about his experiment here, but the long and short of it is that it simply wasn’t viable in his case and the experiment was canceled very quickly. Now, this could be because Tim’s audience was accustomed to free content, or because three months isn't a long enough pilot for such a drastic shift.
But, it does show that it’s important to consider your audience first and think about what monetization strategy will suit the way they consume your content. And, crucially, to ask how your listeners choose to support other podcasters they follow. Take a look at your competition—are they using Patreon successfully? Ask your listeners directly: What other shows do you pay to support?
If the answer to both those questions is no and none, then this might not be the best strategy for your podcast.
The folks at Supercast are betting on Tim being an outlier and they don’t want you to write off the subscription model just yet. They argue that Tim’s audience has an above-average appreciation for his ads, which doesn’t translate to the typical podcast whose listeners would prefer to support them directly in return for exclusive content and other bonuses.
Tim’s audience wants him to recommend products to them, like a version of Oprah’s Favorite Things for the dot-com generation. They don’t care if it’s an ad, they want Tim to tell them what to buy, full stop.
Apple Podcasting Subscription Service
Launched in June 2021, Apple Podcast Subscriptions allows podcast creators to offer exclusive content, early access, or other perks to subscribers. The service is built into the Apple Podcasts app and works with existing podcast hosting services, making it incredibly simple for podcasters to charge their listeners for exclusive content, or for listeners to tip their favorite hosts in order to support them.
We're keeping a close eye on this trend, as we've already seen huge developments in the paid newsletter space—with platforms like Substack. Could subscription podcasting be the future for podcasting? Time will tell.
Selling merch is another way to monetize an existing audience while offering something of value in return. With so many t-shirt printing and shipping services (e.g. PodSwag) to choose from, you don’t need to carry inventory or spend any money upfront. It’s quick and painless enough to set up, so it’s not like you’re starting an entire side-business. It can be complementary if you have the designs and the audience.
So, those are the top podcast monetization strategies we see at the moment, but if you’re creating content based around your business, it might feel weird to ask your listeners for money in the form of a sponsorship or donation. Next, we'll discuss some of my favorite alternative monetization methods.
Promoting Your Business
Many of our podcast production services clients use their podcast as a marketing channel to promote their own products or services. It’s a great way to reach the B2B market and to attract potential customers and clients who can benefit from whatever it is they provide.
You’ve put in a ton of time creating useful content and valuable resources, and your podcast is a great way to showcase your expertise. But more importantly, it's an opportunity to develop a deep and meaningful connection with your target audience—a relationship that is worth far more in the long term than a quick transaction.
By building an audience of listeners that matches the profile of your target customer, you can create long lasting connections and a base of potential customers that are raving fans of your brand. Not only that, but you can establish a two-way dialogue with your community to better understand the people that your business seeks to serve.
Some brands use their podcast to act as their own sponsor and actively push products and promotions on their show. This can work, but we tend to steer our clients away from this approach. With three million podcasts out there, listeners have no shortage of shows to dedicate their time to, and very few of them want to subscribe to an infomercial.
So, we tend to discourage brands from blatantly selling on their podcasts, and instead focus on building that incredibly valuable connection to super fans that we talked about.
Account Based Marketing (ABM)
For agencies and consultants in particular, you can see incredible results by using podcasting as a platform to showcase and interview your ideal prospects.
Instead of thinking of the audience as your customers and using the podcast as a platform from which to preach and attract buyers, consider flipping the model on its head and instead make your show's guests the focus of ROI.
Podcasting is our primary marketing channel. In just two months, the show has generated a bunch of leads worth enough to fund the podcast for another two years. I'm very, very happy with it.
Chris Dryer, founder of Rankings.io
You should still be thinking about making the best podcast you possibly can—to deliver great value to your listener and grow your audience over time—but if while doing that you're developing new relationships with high-value prospects for your services, podcasting can be a huge win-win and deliver ROI much more quickly, just as it did for Rakings.io.
Think about it, instead of that next cold call you're about to make—the one to the account that you really want to land this quarter—you send an email inviting them onto your podcast (because you value their insight and believe your audience would benefit from it). Imagine how much more likely they'll be to give you an hour of their time.
Well, we see it everyday, and the answer is WAY more likely.
What if You Don’t Want to Monetize Your Podcast?
You don’t have to monetize podcasts. Another option is not monetizing your podcast directly at all. There’s an inherent value in capturing attention. Attention is still an underrated currency online. By not advertising to your listeners, you’re building up goodwill and additional trust and making it easier to hold their attention.
When you’re dealing primarily with other business owners or marketers, there’s a certain level of skepticism or putting their guard up, that you have to face when you start promoting things. It can cloud the way they see your advice and content.
If the goal of your podcast is for branding purposes, then you aren’t directly trying to measure ROI in most cases. It’s an excellent opportunity to gain insights into your industry and your audience. It’s also a way to establish yourself as a thought leader in your niche, which can lead to incredible opportunities that are much more valuable than trying to sell a few mattresses.
You can leverage an audience that trusts you for a book release or for soft-launching other types of products down the road, and by that time, they’ll likely be hungry for ways to support your efforts.
Not to mention that podcasting is a fantastic retention tool. Creating content that educates and inspires your existing customers is a great way to make your users more successful and stick around for longer. It also results in lower churn and higher revenue.
On top of everything I’ve outlined above, not having to worry about sponsorships, monetization, or appealing to any outside forces, can make the whole experience a lot more fun. It takes away a lot of pressure when you aren’t relying on your podcast to pay the bills.
When you’re having fun with it, that comes through in the finished product, too. When you’re worrying about trying to hit certain download thresholds to appease sponsors, you might not take as many risks in your content, or you might get stuck in too familiar of a format. And that can turn stale for you and for your audience.
Measuring ROI When Monetization Isn’t Your Priority
The download metric isn’t the best way to measure your show’s success, especially if you are opting not to have sponsors, or to promote anything directly.
Downloads matter to advertisers, but when you’re keeping things in-house and promoting your own business, or just trying to grow an audience to better position yourself down the road, there are other ways to see how well you’re doing.
The Startup column on Medium explains that podcasts are a way to straighten out the traditional image we have of a marketing funnel. Podcasts don’t necessarily fit into any precise position in the funnel in the same way a landing page or a checkout page does. A podcast is a way to “catch” people that may have otherwise exited your funnel.
A listener can learn more about your business from a 20-minute podcast episode than they could from years of being exposed to advertisements, and it happens in a much more subtle and natural way. If they’re getting value, they’re much more likely to stick around until they are ready to order.
In the meantime, you have the opportunity to deliver heaps of value and to build mountains of goodwill without any extra effort, since you’re already producing the podcast. It’s a way to fortify your marketing funnel.
Having too many calls to action in a podcast is a common error, too. The aforementioned article recommends sticking to just one CTA, like getting your listeners onto an email list. This gives you an added level of platform-independence (a way to connect with your audience even in the unlikely event that your podcast platform shuts down).
So, growing this list is one way to measure ROI that will have a larger impact than just watching the downloads number rise, especially if the goal of your podcast is to build an audience and to network in your industry.
More downloads is a good thing as long as those listeners are targeted and they keep listening. Prompting them to dive in further by joining your list is a good way to measure the quality of your audience, not just the quantity.
How Not to Monetize a Podcast: 3 Things to Avoid
While there are many ways to monetize a podcast, there are also some that should best be avoided. They’re either counter-productive, a poor use of time compared to other things you could be putting effort into, or just ill-advised.
Of the three tactics below, the first two are ultimately up to you. They may appeal to you, be a good fit for your audience, etc. However, the last one is non-negotiable. It's imperative that you steer clear of "junk" promotion opportunities. It's just not worth the small amount of money you might have earned from them.
1. Repurposing Your Content Into an Ebook
There’s nothing wrong with making the most of the content you produce. We’re big advocates for repurposing your podcast content to suit other platforms. But we’re also believers in focusing on what you do best.
And if monetization is your ultimate goal, then doubling down on making the best show you can and growing your podcast audience will be much more productive and lucrative in the long run than selling a handful of $3 eBooks. Better to grow your audience, survey them to learn what problems they have, and then produce something unique and valuable that solves those problems.
That something might end up being an eBook, but probably not.
2. Syndicating Your Content to YouTube
We’ve seen this suggestion get tossed around a lot. The idea is to take your existing audio podcasts and upload them to YouTube. There are, of course, successful podcasts on YouTube, and it certainly is a good idea to make your show available there. After all, it’s another huge search engine where increasingly more audio content is being consumed.
But, if you’re not really going to focus on video and you’re just using it as something extra in the hope of raking in the ad dollars, then you may as well just save yourself some time, buy a lottery ticket, and get to work on growing your main platform instead. (YouTube’s ad rates have been on the decline, too.)
Having said that, if your podcast could benefit from supplementary video content and you have enough of an audience to give you an initial boost on YouTube, it may be worth producing some unique video content in addition to your podcast.
3. Promoting Junk
Whether you’re promoting products or services as an affiliate, or they’re sponsoring your show, it’s important not to promote junk. Promoting questionable offers will turn off a lot of your listeners, and the ones who do end up buying some magic weight loss syrup (and are still being re-billed months later) might not thank you for it.
Be sure to think about what brands, products, and offers you want to align your brand with, and be selective of what you think will be genuinely valuable to your listeners. Turning away easy money will serve you better in the long run.
How to Monetize a Podcast: Other Considerations
I hope that reading through this article has opened your eyes to some new monetization methods, or helped you realize that you don’t need to monetize it at all.
When you do it right, audiences accept it. Even better, they thank you for it! If you help them discover a new product or service that genuinely benefits them—as Tim Ferriss has found—your listeners will want you to keep it up.
The criticism of “selling out” is a pressure that content creators had to face much more strongly in the past, but audiences these days are a lot more understanding. Still, it’s possible to come off too abrasive in monetization, so understanding your audience and knowing which offers are best suited to them is crucial.
If you feel like you might benefit from personalized guidance that’s catered directly to your podcast and your business, I would love to help you tailor a strategy that will help grow your main business, and not alienate any of your listeners in the process.
Want to talk to us about launching a new podcast? Lower Street can help with that, too. Just send us a message and we'll be in touch.