Woman working at desk in the evening with paper and calculator.

What do podcast sponsors actually pay?

If your podcast feed sounds anything like ours, it can seem like nearly every audio show’s got a few sponsors these days. Brand managers love the format—a rare opportunity in today’s noisy media marketplace to earn undivided attention from listeners. 

However, not every sponsor message costs the same, and you shouldn’t expect to pick up a big dollar endorsement deal right out of the gate. If you understand the types of sponsorships available, how to attract them, and how to make them work for both your audience and your sponsor, advertising can help subsidize your show.

How does a podcast sponsorship work?

We think it’s important to make the distinction between sponsors and patrons. Patrons want to pledge money to support your show because they love what you’re doing. While it’s possible to land a sponsorship deal that works more like a patronage program, it’s exceedingly rare.

Sponsors want to get their message in front of the right audience or in front of the biggest audience. They’ve only got two possible objectives:

  • Build brand awareness across a variety of media to support long-term customer behavior. Think consumer packaged goods, travel brands, cell phone companies, or other very large businesses. You might notice these sponsors might not even include a specific “call to action” message in their announcements.
  • Convert listeners into prospects or buyers through direct response campaigns. Think mattress companies, insurance providers, or technology startups that urge listeners to visit a specific site or to make a purchase with a coupon code.

The better your show is at helping advertisers achieve one of those goals, the more they’ll be willing to pay for placement on your show. A highly targeted show with a track record of converting direct response ads into sales will often earn more than a general audience show could expect to see from brand ads.

How much will a podcast sponsor pay?

There are a variety of ways a sponsor will choose to pay, and it’s based on several factors. Generally, they will decide to use a CPM (cost per mille or thousand) model or a direct response model. 

CPM

CPM is how much sponsors are willing to pay per 1,000 downloads or listens of your podcast over a 30 day period. The sponsor is looking for reach as the primary metric for measuring advertising costs. According to AdvertiseCast, typical industry rates for CPM podcast advertising in 2019 are: 

$15 for a 10-second ad per 1000 listeners. 

$18 for a 30-second ad per 1000 listeners. 

$25 for a 60-second ad per 1000 listeners.

CPM models work well when your show has earned tens of thousands of loyal listeners. That said, we’ve noticed that average rates have fallen somewhat as advertisers understand that not everyone who downloads a show ends up listening. Many ad brokers have started factoring audience engagement metrics, either directly from podcast players or from social media channels, into their CPM calculations.

Direct Response/Affiliate Sponsors

Sponsors may still want to work with you if you haven’t built a huge audience, but you’ll have to work a little harder. Because direct response and affiliate advertisers pay based on conversion, targeting your audience with exactly the right mix of products and services and boost your show’s rate.

Direct response and affiliate advertisers use CPC (cost per click) or CPA (cost per acquisition) pricing models. They only pay for clicks to their website or if a lead becomes a customer through purchase. They will then pay the podcast a set fee or percentage based on those conversions, generated from a unique link or signup code you give out to your listeners.

If you’re a niche podcast with a smaller, but dedicated audience, CPC/CPA is the best sponsorship model for you. Although there’s technically no cap on what you can earn, the quality of your show and your ability to connect with an audience will determine your revenue.

Depending on the nice, your share of a sale on a typical affiliate marketing program could be as low as 1.5% (typical for sales from mass-market retailers) or as high as 50% (for high-margin education programs or service offerings). For most direct advertisers, the equivalent CPM often works out to be a little higher than for brand campaigns, but with much less risk.

Sponsoring Your Own Show with Products

There’s one more way to make money from podcasting that doesn’t rely on finding a benevolent patron or pushing mattresses on your audience. Many successful podcast hosts use their platforms to sell products they make or services they provide. Podcasting can form part of a strong content marketing campaign, offering prospective buyers a sample of the kind of work or insight you’re capable of delivering. 

For example, if you’ve written a book that you can plug throughout the show, and you sell that book directly from a link in your show notes, you can preserve the margin you’d otherwise hand over to a retailer. For a $20 purchase, you could keep as much as $10 in profit, meaning your effective CPM works out to $20 if you sell just two books for every thousand listeners.

You can also create products specifically to appeal to your fans. Using on-demand production, you can make t-shirts, mugs, and other novelty items with your show’s logo or a catch phrase. The more demand you can generate, the higher margin you can earn from your audience-centric products.

If you provide professional services or consulting, consider that your CPM could rocket past your competition if you convert a new client from your audience. Imagine booking a $1,000 retainer from one of just a thousand of your listeners. Radio broadcasters would love to get that kind of return on investment.

Advertisers Flock to Quality

We do want to make it clear that to attract a podcast sponsor, you need to be producing the best podcast possible. Your podcast production should include high-quality audio, and you should be implementing all of the best practices for gaining and retaining an engaged audience. 

If you need help in any of these areas, we would love to show you how we set our podcast clients up for success, increasing their opportunity to work with sponsors. You can hop on a complimentary discovery session to find out how a team of production experts can take your podcast to the next level.

We’re helping authors, entrepreneurs, and business professionals bring their authentic voices to eager audiences.

We make room on our production roster for just a few new shows every month. If you’re ready to focus fully on your content and let us handle the fine art of audio engineering and editing, follow the button below to get started.

Schedule your discovery interview