So you want to know if your podcast can make money? I totally get it – you want to see some sort of compensation for your hard work! 

Podcast advertising is a long game of strategy, but I’m going to tell you all of the rules to this game – along with how to win it.

There are ways to calculate ROI outside of the straight forward advertising dollars, but I’ll explain that in a different post. Because today, I want to lay out the CPM Advertising model for podcasts – and how this applies to you exactly, and alternatives if this model isn’t in your favor.

Podcast Advertising:

The ‘typical’ model of Podcast Advertising follows the CPM model. CPM stands for cost per mille or cost per 1,000 listeners within the first 30 days of episode release. 

In my experience, advertising agencies finalize agreements with shows that have 10,000 downloads per episode and provide a typical CPM rate that fluctuates between $20-$40. The dollar amount differs with the engagement of your audience as well as exactly where the ad is placed within your episode. 

I’ll provide an example. Let’s say these are your show’s stats:

• Average downloads per episode in first 30 days of release: 30,000

• Ad length: 30-seconds

• Agreed upon CPM rate: $30

So the payment from ad into your pocket : $30 CPM Rate * (30,000 downloads/1,000) =  $900.

Got it?

Now, you might be sitting over there thinking, ‘Elizabeth, I don’t have anywhere near 10k downloads per episode. Now what!’

Well – I would tell you that this is TOTALLY NORMAL because the average download is 100 per episode. 

But you have to know the rules to know how to break them, am I right?

Your other option is: 

Create an agreed upon fee – outside of download numbers.

Less Than 10K Downloads? READ THIS.

Other than the the CPM model, the other option is to create an agreed upon fee per episode per ad slot – not dependent on download numbers.

This can even be paired with additional media promotions – for instance, adding in an Instagram story, etc. 

But where you will find the most leverage is showing the engagement of your audience in relation to the specific product of the business paying for the advertising spot.

Let me explain.

For example, let’s say that you have a show about: 

• Fitness

• Working out

• Healthy eating

And your demographic is mainly: 

• Females

• Ages 30-45 

• With 2-3 children 

• Mostly local listeners 

And your message is to help those mamas get their confidence back after their greatest miracle – their children! You go girl!

Here is what I would suggest: 

Step 1:

Go to your local gym that has great equipment for your work out recommendations along with a phenomenal childcare facility. BOOM. Your listeners would love that, right?! 

Step 2:

Go find the marketing director at the gym and propose your idea for them to advertise on your show. 

Provide them with:

• How your demographic is exactly their demographic

• Details on your show

• Then ask for a fixed fee pricing agreement. 

Start with $200/episode for a total of four episodes to advertise on your show. 

Ensure to tell them this isn’t simply throwing spaghetti at the wall and hoping the ‘right’ client will hear it – you have done all of the work for them on targeting their ideal gym member!

And you are also ‘fixing’ a problem for your listener – how can I work out with children?! You are eliminating one more excuse that is keeping them from stepping into their goals.

And there you go. If you have a show that is under 10k downloads per episode, but you’d love to see some additional compensation come directly from your show in advertising dollars – create a fixed price agreement with a brand/business that shares your same demographic. You’ve done the hard work for them in finding their next consumer, it’s a win/win for everyone.

Let me know if you have any questions below on how this process works!! Perhaps I’ll create a ‘Pitch Script’ if you would find that helpful!