How Much Money Can You Earn With Podcast Sponsorships?
When you talk about podcast monetization, one of the first things that come to mind is paid podcast ads…aka podcast sponsorships. It’s one of the oldest business models on the internet: put out great content…then surround it with ads.
Whenever consumers are used to getting something for free, like podcasts, the content creators often turn to ad sponsorships to help earn money.
Well, podcast ad sponsorships is not our favorite podcast monetization strategy. Not because it doesn’t work. But because most podcasters (e.g. 95%), will find it hard to earn much money from it. The quick takeaway is…you need a LOT of downloads to succeed at monetizing your podcast through sponsored ads. On average, most podcasters would need about 25k – 50k downloads per episode to be able to making a full-time living on their podcast using sponsored ads. Only about the top 5% of podcasts in the world gets these types of download numbers. We’ll run through more of the actual numbers below…so keep reading!
There are definitely easier ways to monetize your podcast, including even fan donations. Nonetheless, it’s a business monetization model you should probably have more knowledge about.
In this article, we wanted to answer some questions on…
- How much can you earn from podcast sponsorships?
- How can I get higher CPM for my podcast sponsorships?
- What platforms can you use to find a sponsor for your podcast?
Let’s get started!
How Much Can You Earn From Podcast Sponsorships?
To answer this question, let’s do some simple calculations to illustrate how much you can potentially earn from your podcast. To start, we also need to start with some assumptions.
Since a lot of these podcast ad networks need you to have some minimum threshold of downloads…let’s use 5k downloads per episode (in the first month) to help illustrate our example. This 5k download is also the ballpark size many of these podcast ad networks need you to have.
Now, we have to understand how much sponsors are willing to pay. According to the podcast ad industry, the going ad rates in 2022 are around $18 – $25 per CPM. What this means is those podcast sponsors are willing to pay you $18 – $25 for 1 ad spot for every 1000 downloads you get per episode.
So, if your podcast gets 5k downloads on average, you can charge $100 for 1 ad spot on 1 episode based on a $20 CPM.
Now, let’s say you put 2 ads in your podcast. For your podcast, you do a 1-min pre-roll (at the beginning of your podcast) and a 1-min mid-roll (in the middle of your podcast). This means you can earn $200 worth of sponsorships per episode based on the assumptions above.
So, if you do a weekly podcast…based on all our assumptions, you can potentially earn around $200/episode x 52 weeks, for a grand total of $10,400 per year.
You’ll have to run the numbers for your own podcast, but we generally like to say that for every 5k downloads you get, you can potentially earn $10k per year for your weekly podcast.
As you can see, monetizing a podcast based on podcast sponsorships requires quite a high number of downloads per episode. To make a full-time salary based on podcast sponsorships, we think you’d need to have at least a weekly podcast, pulling in 25k downloads per episode, in order to make about $50k income per year.
How can I get higher CPM for my podcast sponsorships?
Now, you’ll hear podcasters talking about getting huge $100 – $500 CPMs per ad spot. It can happen, but it’s really not the norm. If you’re looking for podcast sponsorship CPMs that are 5 – 20 times industry norm, here are 2 main things you’ll need to attract those high ticket potential podcast sponsors:
Do you have a niche audience with high spending potential?
For sponsors willing to pay the high CPM premiums, they’ll want to reach a very targeted audience to buy whatever products or services they’re selling. And, that audience will need the authority to be able to write very big checks.
Take a look at your primary audience demographic. Are they mostly decision-makers at companies? Can they make purchasing decisions that result in 5 figure contracts? Are they C-level people at medium to large companies, or VP’s at Fortune 1000 companies?
These are the types of audiences your podcast needs because getting 1 of your audience members to convert into a paid buyer can justify the ROI for a sponsor to buy ad spots on your podcast.
Do you have potential sponsors with high ticket items?
Not only does your audience need to have high spending power, your sponsor also needs to have high ticket products or services to sell.
Let’s take a very popular podcast sponsor example, a mattress company. Let’s say a normal mattress they sell costs on average $1,000. And let’s say you only have 1000 listeners of your podcast, and you think about 0.1% of them (or 1 listener) will convert to actual buyers (based on the industry average purchase conversion rate).
So, does the ROI make sense for this mattress company if they spend $200 CPM per ad spot on your show to sell 1 $1,000 mattress? Probably not, as that CAC (cost per acquisition) is around 20%. This is CAC is likely way too high, eating way too much into their margins.
We think for the ROI economics to make sense, a $200 or above CPM would need each sale to be at least $10k or above. But of course, these numbers are totally different for different industries, with sponsors having different margin thresholds.
What Platforms Can You User to Find a Sponsor for Your Podcast?
As the world of podcast sponsorships is growing, so are the ad networks that can help you find your podcast sponsors. Here are 4 popular podcast sponsor networks that can help you find the next sponsor for your show.
Podcorn is a self-service marketplace connecting podcasters with advertisers for native sponsorships.
AdvertiseCast is the first self-serve online podcast advertising marketplace that connects podcasters with advertisers. Shop over 150 podcasts with a reach over 125 million.
For Advertisers – With Gumball, you can browse a rich marketplace of podcasts to find the perfect fit for your brand. For Podcasters – Gumball lets you to monetize your podcast on your terms. We’re streamlining the sponsorship process, so you can focus on creating and keep more money in your pocket.
Midroll Media is the advertising sales business within Stitcher, the world’s leading pure-play podcast company. Through our Midroll platform, we provide ad sales and distribution services to 250+ shows such as My Favorite Murder, Office Ladies, Freakonomics Radio, Oprah’s Supersould Conversations and many more. Stitcher is a subsidiary of SiriusXM Holdings, Inc.