The Profitable Podcaster

How to Price Podcast Sponsorships (Hint: It's NOT CPM)

October 13, 2022 Joe Casabona Season 2 Episode 14
The Profitable Podcaster
How to Price Podcast Sponsorships (Hint: It's NOT CPM)
Show Notes Transcript

The most common I question I get about pitching sponsors is, "how much do I charge?"

While you might hear terms like CPM (cost per mille, or dollar amount per thousand downloads), starting out that's not going to yield a lot of results for you. There's a better way. You want to show brands the full picture when it comes to your audience. You want to tell potential sponsors about your overall reach, and how you can help them achieve their goals.

Check out my interview with Justin Moore for more (ha!) on landing brand deals.


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Over the last few weeks, we have talked about sponsorship, how to find sponsors, how to keep sponsors. If you need a sponsorship contract, but what we haven't talked about Is perhaps the question. I get the most. How do I price my sponsorship? Now you'll you'll know if you've been listening that I referenced a few ways. In previous episodes, the most common is cost per milli or CPM, but I have a different way for you. And that's what I want to talk about in today's episode. So hang tight because I am going to give you the formula, the framework. That you need. To price your sponsorships Here on make money podcasting. So first let's talk about. CPM. This is a term that you've probably heard before, because this is the most common way to price sponsorship for big. Podcasts CPM stands for cost per milli or cost per Mila. I've heard people pronounce it as. And that means there is a dollar amount per thousand downloads. So let's just say you have a 1000 downloads and your CPM is $20. That means you can charge $20 per sponsorship. If your CPM is 5,000 downloads, and this is downloads per episode within a 30 day period, just to be clear. So again, if your a CPM is 5,000 downloads, In the first 30 days. Per episode. Then you can charge $100 per sponsorship. Now, if you're getting 5,000 downloads in the first 30 days that puts you in the top 5% of podcasts, this podcast, isn't getting that many how I built it. My main podcast gets about that many, but. I charge a lot more. Then $100 per sponsor spot per episode. In fact, I charged double or triple that. And that's because. Again, you likely don't have that many downloads. And there are some real costs to both like getting sponsors. And running your podcast and a CPM of, uh, the average kind of last time I checked. This depends on category, but the average is between 18 and $24. Uh, again, Depending on the podcast category. So if we just say $20. For most podcasts, that's not going to be worth Like it wouldn't be worth it to sell. At a thousand downloads per 30 days. CPM just wouldn't make sense. You'd make a lot more money. Not selling those ad spots. And instead of selling your own product or promoting your mailing list, because I'm going to guess. That. The, the, uh, email addresses on your mailing list are worth a lot more than 20 bucks. So how can smaller podcasters, like you like me? Make money with sponsorship. Well, you probably don't have the downloads, but you might have followings in other areas. Facebook Twitter, Instagram. Tick tock. Your social media, other social media, your mailing list, YouTube website, visitors. You probably have an audience. Bigger than just the number of downloads. In your podcast. I've coached people who have smaller podcasts, but they have a mailing list of eight or 10,000. And newsletter sponsorships are blowing up right So when you put together an offer, instead of calculating your cost based on CPM, You can calculate what I call your overall reach. I've heard other, other podcasters. Use that term or other terms. But you're basically calculating for your sponsor. How many people overall you'll reach. So let's look at an example. Let's say you get. 50 downloads per episode, over a 30 day period. But you have 4,000 Twitter followers. You have 600 Instagram followers. Your mailing list. Is. Let's say 2000. So I think I have to read the tape back. And, uh, we said 50 downloads, 4,000 Twitter followers. So that's 4,050. Uh, 600 Instagram followers. That is a 4,650. 2000 people on your mailing That's 6,650. Which is your overall reach, right? You're adding Your audience across all of these platforms. And I know what you're thinking, right? You're thinking, well, what if people on my mailing list also happened to listen to the podcast? That's a little unlikely. You might have some overlap, but I don't think the, the overlap. Is going to be significant enough for you to subtract, but. If you want. You know, calculate the overall reach and then round down to the next round number, whatever. Um, but I don't think that's going to make an impactful difference because your audience is going to either be on your newsletter. Right. And then you promote your show to your newsletter. And maybe some people will listen or they'll just like read the notes. Or they're going to be people who listened to the podcast who have no idea that you have. Uh, newsletter. So. Reasonable to think that calculating your overall reach is you're just going to kind of take the raw numbers and add them up. But if you want to. You know, again, round down or like take 10% off or whatever, that's totally up to you. But let's use this overall reach of. 6,650. You can put together an offer. That is something like this. A mid roll. And read that is 60 seconds long. Three tweets the week, the episode airs where you talk about the sponsor. One Instagram post story or real. Uh, that goes up per week about the sponsor. And then a dedicated area in your newsletter. Where. Uh, you have a section where you talk about the sponsor and thank them. This adds a ton. Of value for your potential sponsors. And it makes, so it just kind of blows that $20 CPM out of the water. That's how I charged 250 to 350 bucks per sponsor spot. And because your audience trusts you. E, and you're speaking from the heart, you're, you're going to help with conversions, right? So this is the other thing. Um, you look at say, Squarespace or Casper or me undies or. Some of these other bigger companies who are just kind of trying to cast a wide net. And reach as many people as possible. Those are general purpose sponsors who are just trying to go by volume. Right? Coca-Cola doesn't measure ROI. From Superbowl ads. You can't. I mean, you know how many people watched the Superbowl, but you don't know how many people watched your specific commercial. And you don't know how many people were encouraged. Two. Drink a Coca-Cola. After seeing the ad. You just don't know those things. You're going for brand recognition there. And so. When we talk about our smaller audiences. Uh, I like to call them like small, but loyal are small, but mighty. They listened to you because they trust And so when you make a recommendation, even if it's paid. They are more likely to listen to that. And I make it really clear to my listeners that. A, there are sponsors spots B I vet those sponsors. I don't just recommend anybody. Who's going to hand me a paycheck. And that's really important. It's really important for them to know. It's really important for me to say. And I've had sponsors before where nothing against them. I just didn't think they were a good fit one. Uh, was manscaped. And they are a let's call them a gentleman's grooming company. And they wanted to sponsor my podcast. And I said, I'm sorry. I just, I just don't think. Um, men's grooming tools. Are a good fit. For my audience and I decline them the same thing with another sponsor. Uh, that wanted a lot of, well, this goes into kind of. Contract negotiations and what they're asking for, but, um, I had another sponsor who. I wasn't sure if they were a good fit, they did send me the product to try, but they didn't want me to make it clear. That it was. Paid placement. They wanted me to work their product into the conversation. And I told them no deal on that. I because I need to make it clear. I make it clear. When there's a current sponsor Like music usually plays in the background. Or I say like, this episode is brought to you by. Um, but also when I mentioned a former sponsor or current sponsor outside of that sponsor spot, I make it clear that they are a current or former sponsor. I want to be. Very upfront about that. And because of that, my audience trusts me. And so when I recommend something there. More likely to convert. Or they're such great brand alignment with my audience and the sponsor that they're more likely to convert. I've called this CPA or cost per acquisition. Uh, I think cost per acquisition is a little bit different, right? Because that's basically an affiliate program in my eyes. Uh, if you're, if you're getting paid per acquisition, that is an affiliate program. And I personally don't do. Affiliate programs and sponsorships are very different to me. And so if a brand just comes to me and they say, well, we don't want to sponsor your podcast, but we'll do an affiliate program. That's not going to work for me. There are a few affiliate programs that work for me. So. That is, I think CPA or cost per acquisition is different, but calculating your overall reach. This is the formula you want. And I'm not going to tell you like how much to charge. Like there's no, like. Uh, a formula like, oh, calculate your overall reach, then divide by five. And that's how much you can charge per sponsored spot. It really depends on what you offer. To the sponsor and how much. Your clout or your trust is worth to the sponsor. I will say this though. I recently interviewed Justin Moore. On my. Main podcasts. I shouldn't call it my main pot. It's my interview podcast. It's my older podcast, I guess. Um, I do both of these weekly, so they're both my main podcasts, but, um, On how I built it. I interviewed Justin Moore. And he told me that we should stop making our prices public. I had prices. Listed on the sponsor page. So sponsors could just be like, yep. Okay. This is the package I want, but. Again, that works for maybe bigger. And like NPR doesn't make their prices. Public. But. Maybe for bigger podcasts where they are straight up, calculating CPA or CPM. That's going to make more sense. But for us. Where we're adding value beyond just reading a sponsor spot. You're probably gonna want to come up with a custom package. And so I thought that Justin offered really good advice here that I want to reiterate here. I will link his episode in the show notes for this, which you can find. In your podcast app or over at make money, 2 1 4 that's season two, episode 14. Um, so. The advice he gives. Is get on a call with the sponsor. I know Especially people, especially my former space. Never wanted to get on a call. They're like, why would ever, why would anybody want to talk to somebody on the phone? But let me tell you if somebody is willing to hand you like a $10,000 check. Either worth the phone call. Even if it's just to make sure that you're not like some fly by night email address, it's going to take their money and run. So again on the call with them and ask them this question. What makes this a win for you? 'cause honestly, some brands might not be looking for conversions. Maybe they're looking for brand awareness. Maybe they just want to be associated with you because you're a trusted voice in your space. That happens to me a lot in the WordPress space. WordPress companies will approach me. They want to sponsor my work because they want me talking about their stuff. And so take some notes. Ask them. What channels, what areas they want to be more visible on? I always say. Podcast sponsorship is my main offering, but I also do these other things. What works best for you, and then come up with three sponsorship packages. Give them options. Shoot your shot on one of them. And be like, Hey, for $10,000. You can get a half year sponsorship on my podcast. I'll create three videos on my YouTube channel. And I'll post a Instagram real. Uh, 10 Instagram reels that you can then repurpose for like organic sharing. So. For us, for me, for you. It's not just about CPM. It's about offering value to a brand that wants to align themselves with us. And so to recap, I don't use CPM to price your podcast. Your podcast, sponsorships. Instead calculate your overall reach. Look at the places where you have presence. Add up all of those subscribers followers, listeners. And then think of a few things, right? You don't have to go into every sponsorship. Uh, like pitch call cold. Think of a few things you're willing to offer a sponsors, right? If you're not willing to make YouTube videos and don't offer If you prefer to make reels where you talk about the brand or you highlight the random some way, then do that instead. And create this kind of all a cart menu for yourself. Get on the call with a potential sponsor. And come up with a custom package based on what makes a win for them. So there you go. That's how you S you price your sponsorship. I hope this was really helpful for you. Uh, if it is. Share this episode with a And say, Hey. I know that you do sponsorships. Here's how Joe prices is, and this is how he's been doing it for seven years. His podcast was sponsored before it even launched. So I'd really appreciate that. Thanks so much for listening to make money podcasting again, for all the show notes. You can head over to make money. 2 1 4. And until next time, I can't wait to see. What you make.