I can say this honestly: Podcasting changed my life and business.
After successfully launching a podcast, it literally changed my trajectory with publishing, helped me sell more books, and build my network.
That’s a story for another time but the point is that podcasting can be a great alternative to a blog (and often works in tandem with a blog) as a lead generating source, a way to highlight your niche expertise, build your audience and customer base, and make money.
For now, I want to focus on the monetization piece of podcasting because this is a subject I’m regularly asked about.
The following are all the different ways you can monetize a podcast:
For now, I want to focus on the monetization piece of podcasting because this is a subject I’m regularly asked about.
- Affiliate Links, Ads, or Brand Sponsorships
- Physical Products
- Digital Products
Let’s unpack each one – how they work, the pros and cons, etc. – so you can select the best plan of action.
1. Affiliate Links and Ads
This is the traditional blog / podcast monetization method, and probably what you’re most familiar with when you think of how bloggers or podcasters earn money.
Now, when it comes to podcasting, this can be a really lucrative route IF you have a big audience established.
I use this monetization method on my podcast but rarely on my social media and blog. If you scroll through my instagram, you might see one sponsored post a year.
I have companies reach out and offer me thousands of dollars to share about their businesses on a weekly basis, and I could make a nice chunk of change by saying yes to everyone who asks.
Instead, I have a rule: The one place I’ll advertise for other brands consistently is on my podcast, so long as I can advertise my own products and offerings as much as, if not more than, I share about other brands.
Advertising like this is really only sustainable if you have a high volume of listeners, and although I did used to do it now and then on the podcast, I didn’t get more serious about this until we began averaging around 55,000 downloads per episode.
The benefit of taking on sponsorships and ads when it comes to podcasting is that it’s a sliver of the whole piece of content. This is why I’m willing to do it there versus on Instagram.
On Instagram, the ad is the entire piece of content, so I try to avoid doing this unless I really, really love the product or brand.
The benefit of this method: it allows you to monetize and sustain all the time you invest into creating, paying editors, etc. and is especially helpful in a season where you don’t have many of your own offerings available.
The challenge with this method: It requires that you have a pretty big listener base established (the rate for ads is about $18-25 per 1,000 downloads per episode and the average podcast gets only 140 downloads per episode). In other words, you really need to have high volume for this to be a route that keeps your lights on.
Do the math.
Say company A is willing to pay you $20 per 1,000 downloads on an episode.
If you average 5,000 downloads on an episode, you’d make $20 x 5 = $100 for running that ad.
$100 per episode might be nice spending money but it’s not going to replace your 9-5.
If you average 10,000 downloads per episode, you’d make $20 x 10 = $200 for running that ad.
Not bad but still not as much as you could make with a much smaller audience using another monetization route.
Unless you already have a really large and loyal following, this is not always the best way to go about things. Why?
Because you have to be in the top 1-3% of podcasts for this to be sustainable (over 50,000 downloads per episode), and you’re relying on someone else’s business.
You’re pouring energy and putting work into growing your audience for people to click away or go buy something from someone else. You’re spending all this time pouring into your content only to lead people to go somewhere else.
That’s not to say you shouldn’t ever use this method. I mean, I use it!
However, it’s important to understand that if you’re just starting off and don’t have a large audience yet, there are other ways to do this that can be much more profitable and sustainable for you.
Okay, monetization method number 2 is to offer your own services. I ran a photography business for two years, so I’m pretty familiar with this kind of work.
Monetization method number 2 is to offer your own services. I ran a photography business for two years, and since I often say podcasting is essentially of like audio blogging, I’ll make the connection by saying that although I did not have a podcast at the time, I DID have a blog for this business, and I often shared about my photography sessions on my blog, which helped me get clients (which also supported my blog financially).
The benefit of this method: Compared to the last method, you can charge WAY more, and make much more with a smaller audience.
Instead of having to rack up thousands of downloads to make maaaybe $20 per 1,000 downloads, you could offer a service that you charge $2,000-4,000 dollars for.
Let’s do the math.
If you averaged about 2,000 listeners per podcast episode and went the advertising route at the $20 per 1,000 listens price point, you’d make $40 for running an ad on that episode. Even if you ran 3 midroll ads at this rate, you’d still only make $120 for that episode.
If you have 52 episodes a year, which equals one episode per week, and ran 3 midroll ads on each episode at that rate, you’d ultimately make $6,240 with ads in a year (before taxes and expenses).
Great supplemental income but not exactly a salary.
Now, if you averaged 2,000 listeners per episode and pointed people to your web design services, you could safely estimate that about 2% would take you up on your offer.
That’s 40 people. If 40 of your listeners, over the course of the entire year, purchased your $2000 web design package, that would be 40 x 2,000 = $80,000 in a year.
That’s a difference of $73,760!
THAT is sustainable, and a GREAT method to consider if you don’t have a big audience but you DO have a service to offer.
You’d want to make sure you target your shows content toward those who would need the kind of service you offer. If it were web design, then creating a podcast for new business owners or mom-preneurs would be a great best plan of action.
See how this works? If you’re a service-based entrepreneur with a small but engaged following, either on IG or Facebook or your email list, and find that you’re wanting to podcast, this can be a great way to serve your community in a new way — and put some coin in your pocket!
Plus, if you have 2,000 active listeners on your podcast vs 2,000 followers on instagram, you’re much more likely to be able to sell more thorugh your podcast because those 2,000 people are actually LISTENING to your show.
Only about 3% of your instagram following will actually see your instagram posts, which is about 60 people per post vs 2,000 listens per podcast episode.
See the difference?
The problem with this method: The challenge with going this route is that you do have a capacity, or a ceiling, if you will. You can only charge so much and you only have so much time in the day. In order to make more money, you have to take on more clients. But we know this isn’t always possible because you have 24 hours in a day.
Even with a team, this is a method that trades time for money and you can’t take on a million clients to reach your higher revenue goals. You have to draw the line somewhere.
So, if you’re just looking to create a sustainable income and escape your current 9-5 and do something you’re passionate about (like creating content in your pajamas at home), this is a great starting point!
But if you’re at a point where you’re really wanting to really scale your revenue, I wouldn’t make this your only plan of action.
3. Physical Products
My very first online business was an Etsy shop where I sold physical products like mugs, canvases, and t-shirts.
Here are a few pictures from that shop!
I started the shop as a college student so the few thousand dollars the shop began to make every month felt like winning the lottery! I mean, I made the switch from Ramen to Chipotle, which seemed like a pretty solid upgrade (especially with that extra guac) 😉
Okay, okay, I’m being dramatic. But my point is that the shop certainly did well, especially for a senior in college.
However, the more orders that came in equalled more work for me.
The more it grew, the more late nights my friends and I spent packaging items until 2 am (which was fun in college but I quickly realized wasn’t very sustainable), the more refund request or damaged item emails had to be answered, and the more money had to be invested in inventory.
The more items I sold, the more time and work was required of me. And I still had homework to get done and a life to live.
I loved that little shop but I knew that going forward after I graduated, I might need to find something a little more sustainable.
Which leads me to the benefits and the problems with monetizing your podcast (or blog) with this method.
The benefit of this method: The great thing about this method over something like using ads or affiliate links is that you’re building YOUR own business.
You’re leading people to YOUR products and acquiring your own customers. When you convert someone from follower or fan into a paying customer, and serve them well, they’re much more likely to be a recurring customer.
I have a friend that owns an incredibly profitable clothing shop (and she runs it way better than I ran my Etsy shop in college, although she started out scrappy just like any one of us) and a few weeks ago, Matt and I visited her and her husband’s house for dinner and she shared that a lot of their business revenue comes from repeat customers.
As we devoured dessert, she said, “You guys wouldn’t believe how many of our customers shop every week or every other week. We recognize so many of their names now!”
WOW. Every week? That’s customer loyalty right there.
She’s created a product people really love and they come back for more and tell their friends.
They’ve really expanded their team at this point, have an efficient system in place and therefore, have been able to build a very sustainable physical product based business.
With the right systems and people, it can be a really great thing if this is your dream!
The challenge with this method: The hard part about monetizing this way is that the cost goes up as the sales go up. It takes more labor, time, and financial investment to sell 100 shirts than it does to sell 1.
Like I shared with my own Etsy shop, as orders and revenue grew, so did the investment of labor, time, money, and energy.
Same with my friend’s shop – the first couple years for them were a lot like my Etsy experience… packing and shipping out of their garage and living room, hiring friends to lend a hand, and hustling until all hours of the night to keep up with orders.
In this model, more money/sales = more time and labor.
I’d like to point out that there’s nothing *wrong* with this as a monetization model.
You can have have a very successful physical product business, and I’m a HUGE fan of small shops and boutiques.
However, in this article, we’re talking about it in the context of monetizing a podcast.
If you’re looking at it purely logically, you need to remember that a podcast is an investment of time to plan, produce, and promote. So you need to be thinking in terms of time, not just dollars, as a currency.
If you’re considering monetizing a podcast by selling physical products, make sure you set an expectation.
Let’s say you sell sweaters at $50 a piece and you have 2,000 listeners on your podcast. If you can expect about 2% (40 listeners) of them to convert over the course of the year, you could expect to make about 40 x $50 = $2000 in revenue.
Remember, each one of those sweatshirts have costs to sell (labor, packaging, printing, etc.) so that’s GROSS revenue, not net profit. After factoring out the cost per item, it would be less.
It’s important to note that this is under the assumption that your podcast doesn’t grow. But even if it doubled in listenership over the course of the year, you’d probably find that your sweater sales aren’t keeping your lights on by themselves.
Similar to services, this approach also has a capacity. More sales means more demand on your time and you only have so much time in a day (until you have to hire help but then that eats into your profits).
Bottom line, this method can certainly make great side income but would need to be used in tandem with a larger business plan to be sustainable – especially for shows with smaller audiences.
4. Digital Products
These can be templates, presets, ecourses, ebooks, stock photos, and more. While selling e-courses are definitely the most profitable because you can usually charge the most, I recommend starting with something simpler to begin with (such as an ebook or template).
The benefit of this method: I saw the power of digital products when I made and sold my first ebook in 2016. I charged $10 for it but sold over $10,000 worth of them within a month or two… with no overhead expenses per item.
At the time, my audience was much smaller than it is now but it still really, really worked.
But what I want to point out is that the amount of time, energy, and financial investment it cost me to sell 1 ebook was equivalent to the amount of time, energy, and financial investment it cost me to sell 100 ebooks.
With the exception of a few customer service emails (and many emails thanking me for the ebook) to respond to, the amount of work I had to do didn’t go up much whether I sold 1, 100, or 1,000 copies.
This allowed me to have some freed up capital and working cash-flow to hire a part time assistant, take on more speaking gigs to get practice, and more.
That was not the case with physical product. The more orders I got for physical products, the more work there was to do and inventory there was to buy.
The incredible thing about e-products is that you create them once and you’re done. There’s no storage costs, overhead costs, or inventory cost.
You invest time up front to create, pay an editor or proofreader to review, might purchase some design elements (also digital products someone is making money on ;), and pay a small monthly fee for a Shopify Lite account… and you can sell limitless amounts without those costs going up.
You can honestly create an ebook for an upfront investment of about $50-$60 and a few hours of your time but can sell a limitless amount of them.
Pretty awesome, huh? I truly believe digital products are the future, and selling your own can be the BEST way to monetize a blog or a podcast.
Again, an ebook may not be what makes the MOST money on your podcast but this is a great place to start with digital products before graduating on to courses. Partly because it’s less production and takes less time for you but also because it helps you acquire customers, deliver them value on your niche expertise, and warm up your audience to buying digital resources from you.
If you think of digital products like dating, it makes sense to start with something a little smaller, right?
Think of your free content (blogs, IG captions, episodes) as your first meeting, your lower priced digital product like your first date, and your higher priced digital product (like a course) as the proposal.
This is why I say starting with a lower priced digital product is a more natural customer acquisition tool. If you met someone on the street and immediately asked them to marry you, they’d probably run away, right?
That’s a big commitment – especially with someone you barely know and certainly don’t have any reason to trust yet!
But if you met someone and asked them on a coffee date, they’re much more likely to say yes, right?
That’s a shorter commitment and a safer starting point that makes it easy for them to accept.
The same goes for the digital product-customer relationship.
Here’s what this looks like:
Stepping into the digital information product space, and monetizing your podcast with your own digital products, allows you to establish yourself as an expert in your space, and acquire a limitless amount of customers without always trading your time for money.
The problem with this method: I’ll be honest, it’s tough to find any real problems with this method.
Perhaps the biggest challenge I see with this is getting it started. It takes a little time to build up the “know, like, and trust factor” by creating content on a specific subject for a specific demographic before they’ll be willing to buy information from you.
But if you can stick with it and set this as your big picture goal, you can go really far (and scale your business much bigger) by selling digital products — even to a small audience.
Just for perspective, a friend of mine has an engaged audience of about 6,000 people and sold a $97 digital product that bundled up her expertise and that she spent a few weeks priming them for.
In five days, she made over $15,000!
In FIVE days.
I’m telling you, this stuff works if you do it right.
The problem, though, is that so many creative, talented, knowledgeable women don’t even try!
They self-sabotage when it comes to this because they think things like, “Who would want to learn from me?” or, “It’s not perfect… what will people think?” or, “I’m not a total expert, I can’t sell information on that subject yet…”
All of which are lies.
Why? Because even if you’re not the top expert on a subject, there will always be someone a few steps behind you.
There will always be someone a few steps ahead of you. At the same time, there will always be someone a few steps behind you. Turn around and grab that person’s hand. Or in other words, create content on your podcast (or blogs) and digital products for THAT person.
Get to know them, understand what they want, package up your expertise into a system, process, or framework they can follow… and give it a shot.
You might be surprised by the success you find.
Which monetization method interests you? Which one do you want to try?
December 16, 2019