Unless your podcast is a passion project, making revenue should be your number two priority, the first being production of a podcast worth listening to. If you’re not podcasting for the straight “love” of the topic, or your podcast isn’t generating revenue for your business, why waste your time blabbing away into a microphone?
If you don’t have a plan or any real goals to speak of, it can be hard to determine your progress and success. With the popularity of podcasts (in terms of audience) growing every day, new podcasts are being launched at breakneck speeds in an effort to capture the demand.
Before we get to how to generate revenue and measure podcasting ROI, let’s first take a look at opportunity this platform can provide.
Share of Ear
In a recent study done by Edison Research, titled Share of Ear, found Americans spend an average of four hours a day listening to audio. Podcasting captured only 2% of the overall “share of ear”. However, this number is a bit deceiving, considering many Americans don’t listen to podcasts at all.
Additionally, podcasts are often produced weekly or monthly, causing listeners to often “binge listen“ to their favorite shows, listening to several episodes at once. When you look at listenership from daily consumption out to monthly consumption, that percentage increases to 15 percent of Americans, which equates to approximately 39 million people (which is up from 12% in 2013).
That is significant growth to already very significant potential audience.
For an even more detailed explanation of podcasting share of ear, watch this short video from Tom Webster, VP of Strategy at Edison Research.
How to Generate Revenue From Your Podcast
Most of the methods for generating revenue from a podcast are actually quite straight-forward.
- Advertising: One of the most popular ways to generate revenue with a podcast is to sell advertising time during your show. As a podcaster you can reach out to potential advertisers directly or use a company that helps podcasters monetize their show such as MidRoll and Libsyn.
- Consulting/Coaching: Many podcasters are consultants or business professionals and their podcast is used mainly to increase brand reach. There are few content mediums which allow a professional to display their expertise like podcasting. Revenue is generated as a result of increased brand reach in the form of consulting or coaching engagements.
- Affiliate Marketing: Another source of revenue for podcasters is affiliate marketing, which essentially involves selling other people’s products for a commission. The two keys to successful affiliate marketing is the relevance to your audience and quality of the product. Pushing low quality or unrelated products is quick way to lose the audience you’ve built.
- Direct Sales: Podcasts can be an incredible tool for selling your own products. Using my own Content Warfare Podcast as an example, the vast majority of contributed dollars to my recent crowdfunding campaign came from podcast listeners. Using a vanity URL, each week I updated my audience of the crowdfunding campaign results and reminded those who hadn’t yet contributed to do so. This same method will work for any direct sales product. Just focus on making the buying process easy for listeners by including a simple vanity URL listeners can easily remember.
- Speaking: Podcasting is a great platform with which to display your speaking and presentation chops. Though you’re not performing in front of a live audience, the ability to pull together coherent thoughts and ideas for 2-30 minutes at a time is a good indicator of ability. Marcus Sheridan adds an outro to every podcast letting listeners know he is actively seeking speaking opportunities and to inquire on his site if interested in hiring him. Certainly a tactic to consider if speaking is revenue source in your business.
How to Measure the ROI of Your Podcast
Once you understand how to generate revenue from your podcast, measuring the ROI of your podcast isn’t that difficult.
NOTE: I’m assuming you have the tools/ability to track “Source of sale” on affiliate products and direct sales. This can be achieved by directing podcast listeners to a special landing page or using a tracking code inside your vanity URL.
Here is the very simple equation to measure the ROI of your podcast:
Revenue generated (minus) expenses (divided) by production hours = Return on investment
It’s that simple. Each month total all the sales you’ve made through the various sources associated with your podcast. Then total all your podcast expenses, which most months will probably just include hosting cost. At the same time, you should be tracking your podcast production time. This includes strategy, planning, scheduling, recording, pre- and post-production, and distribution.
Once you have these two figures, divide total revenue by total production time, and you have the hourly ROI for your podcast.
How to Improve the ROI of Your Podcast
Let’s say you measure the ROI of your podcast and the number returned makes you throw up in your mouth a little. There are tw0 simple, but not necessarily easy ways to improve the ROI of your podcast:
1) Increase the amount of revenue your podcast generates while keeping production time and expenses constant.
This could mean pushing your direct sales and affiliate product offerings harder throughout each episode, adding new products with higher margins, and/or increasing monthly advertising rates or coaching fees. Don’t take any of these changes lightly. Always consider the impact on your audience before making changes to your revenue structure.
2) Decrease production time and/or expenses while maintaining revenue per episode.
The easiest place to cut production time is in post-production and distribution of podcast episodes. Give strong consideration to outsourcing these tasks to a virtual assistant. This is especially true for weekly podcast producers. There will be an associated cost to outsourcing post-production, but depending on how much time it takes you, there is mostly likely value in outsourcing.
Considering using the extra time to create new direct sales products or secure higher paying advertisers.
Don’t over complicate the process of measuring the ROI of your podcast. All you have to do is dedicate yourself to tracking where sales come from and the time and expenses it takes to produce the podcast itself.
The best case scenario for increasing the ROI of your podcast is increasing revenue, while decreasing your own production time. That’s obvious, but keep in mind is small changes in the number of hours you spend producing your podcast can have a dramatic impact on your podcast’s return on investment.
Figure that out and you’ll become a podcasting Rockstar.
How are you generating revenue for your podcast? What other tracking methods help measure the ROI of your podcast?
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