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Small Audience, Big Opportunities: How Indie Podcasters Can Thrive with Direct Sponsorship and Memberships
even so-called "smaller podcasters" can have effective and profitable revenue streams that doesn't involve ads
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I’ve just come back from Podcast Movement in Denver, Colorado, and one of the overarching topics that was up for discussion was podcast monetization (no change there from previous years, then).
And it’s understandable - it’s a discussion that’s been front and centre of the podcasting space for many years now, especially as we see leading industry publications like Podnews and others share success stories, partnerships, exclusive deals, and more.
But while the conversation remains fresh, the approach to monetization seems to have stalled, at least in some quarters. While I couldn’t get to listen to all the sessions and tracks around monetization at Podcast Movement - I was there with the Captivate team as we were one of the event sponsors, and also had a booth there - one thing I did notice was some of the thinking about advertising being the lead/best option for podcasters.
While this might be the case for larger podcasts and media companies that represent these shows, these ad partnerships work because the podcast is getting tens, if not hundreds, of thousands of episode downloads within the first 28 days (or 30, depending on whose data you track). They might even be in the millions. So, yes, it makes sense for advertisers to partner with them and vice versa - after all, that many ears placed in front of a sponsor’s message is always attractive.
But for the average indie podcaster with maybe a few hundred downloads, or even averaging 2-3,000, this approach won’t work. And that’s okay - because it doesn’t need to. Instead, there are far more effective ways to monetize your show, regardless the size of your audience.
Going Beyond Downloads to Audience and Sponsor Relevance
The “problem” with using download numbers as a metric for podcast success is that they don’t tell the full story, as I’ve talked about before on here. Because of auto-download features on podcast apps, and queue for later choices by listeners, not every download will result in a listen. So, while an episode might get 10,000 downloads, for example, perhaps only 2,000 result in a listen. While that’s still a great metric, that’s only 20% of the target audience hearing an ad - yet sometimes the advertiser still pays for all the downloads, or maybe impressions (but, again, impressions can be a questionable metric to go by), depending on how the agreement is set up. Even if they’re paying for CPM (which is Cost Per Mille, or cost per thousand listens), different platforms track listens differently so that can also skew figures.
Additionally, depending on how you the podcaster is inserting ads, you may have less say over where they go than other options. You might also have less say over which ad partners you work with, depending on whether you’re using an ad exchange that gives you that control, or with your podcast host that inserts at points they feel make sense, and with parters they feel are best suited to you. This can cause a bit of a disconnect, and actually lose you listeners.
So, instead of taking this ad-based approach, think of what makes sense not only for you, but your audience and the sponsors/partners you’re considering working with. Even if you have a smaller audience, if the relevance and context is high the more likely an action will be taken, whether that’s your listeners redeeming a discount promo code, getting an extended free trial, or access to an exclusive online course event that your sponsor partner is running.
I was speaking with a podcaster about this at Podcast Movement. They’re an existing Captivate podcaster, and wanted to know how to attract and work with sponsors when their show wasn’t attracting thousands and thousands of downloads. So we went through the following:
we chatted about his niche
we chatted about his downloads, and how many unique listeners he had compared to downloads
we saw by his analytics that he had a pretty engaged and loyal listenership
we chatted about the types of sponsor he’d want to present to his audience, and vice versa
From there, we saw an opportunity for him to work with a local comic book store in Culver City, L.A, because it turns out he had a nice listenership there after attending a Comic Con-style event. Even though he wasn’t local to Culver City, he could let the comic book store know that he has X amount of regular listeners every single week, and if the store was willing to sponsor the show then the podcaster essentially has over 50 listeners who he could promote that store to in Culver City. If you’re a small business, and you’re told that you could potentially get 50+ warm leads/customers each week, that’s a pretty win-win opportunity right there.
That’s just one example of where direct sponsorship with a relevant audience and sponsor/partner can work, even with so-called “lower numbers”. And what’s even cooler about this example is that the podcaster isn’t even local, but the audience is - just one more reason why you should be deep diving into your analytics for data that works.
A Loyal Audience is a Rewarding Audience
With the example above, the extra care and time the podcaster put into identifying a sponsor that works for their niche, as well as ensuring their audience received value from the partnership (in this case, exclusive “backstage” invites to author appearances and first option on newly-released merchandise), makes this a very valid partnership for both sides.
It’s this kind of care and attention for your audience that can also reward you if you go a more direct route to monetization through that audience, with Tips and/or Memberships.
Whether that’s something like Buy Me a Coffee or Patreon, or the recently released Tips and Membership features from Captivate (where I’m Head of Podcaster Support & Experience), these are excellent ways for you to offer listeners something extra, and for them to support their favourite podcasts/podcasters while getting “rewards” for that.
It’s why one-off Tips and Memberships are so popular now, both for podcasters and listeners. As a listener, I know I’d rather throw a few bucks the way of a podcaster whose content has improved my life in some way (personally or professionally), as opposed to one where monetization is led by how much they can make instead of how much value can they offer their listeners.
If you look after your audience, and consistently deliver on their expectations when it comes to what to expect from your show, then that consistency will be rewarded by loyalty. They’ll remain an active listener/follower, and be more open to supporting you if/when you’re ready to offer something for a premium option, whether that’s a one-off tip or recurring monthly membership. Just make sure to keep things simple and realistic:
If it’s a one-off tip, don’t overcomplicate with multiple amount options. Instead, either make a couple of default amounts, or let the listener choose their own.
If it’s a membership option, make every tier different from each other, so each tier shows a visible change from the previous one. Make the benefits of each clear and obvious.
Offer a free trial. Memberships can still be tricky for some listeners to understand, so a free trial (while receiving the perk of the paid membership) is a great way to show why they’d want to upgrade and pay.
Offer a personal message, and be genuine about why you truly appreciate their support.
Be sure to thank publicly (where possible) and give shouts on your podcast - show that your audience and their support means something.
Memberships and Tips can be super effective when it comes to earning through your show. Listeners generally want to support their favourite creators, and if they can do that monetarily they will. Especially if you’re super smart with the perks that come from being a member, and maybe offer exclusive perks from sponsors that you’re working with for an all-round partnership perk for both listener and sponsor (“Subscribe to Tier X and get a special limited edition item from this show’s kind sponsors!”).
The key thing to remember, whether you’re working with sponsors or more directly with Tips/Memberships, is to always have your audience front and centre when it comes to what’s on offer. It needs to make sense for them, and benefit them (much like your content hopefully does).
Get that right, and the size of your audience matters far less than if you were just going down the advertiser route. The opportunities are there - you just need to take them.