A highlight from Ep386: 3 Ways To Make Money From Your Show
I want to make sure that I'm always bringing in at least one client a month, one new client a month. So I'm not going to waste my time only doing four episodes in the month. Instead, I'm going to go much more. I'm going to do 16, 17 episodes in the month. Most hosts never achieve the results they hoped for. They're falling short on listenership and monetization, meaning their message isn't being heard and their show ends up costing them money. This podcast was created to help you grow your listenership and make money while you're at it. Get ready to take notes. Here's your host, Adam Adams. Hey, Podcaster. It's your host, Adam Adams, and we are talking about monetizing your podcast. We're talking about the three most common ways that podcasters will monetize. Now, if you look at other episodes that we've done on this podcast, and actually I'll have my team put a few of the monetization episodes in our show notes right now. So now you're listening and you're going to be able to scroll down and see what are the other ways to monetize because in this episode, we're talking about the three most common ways that people monetize their show. So if you want to know the other seven or eight ways, go and check out the links that are in the show notes. We will link to other episodes with other ways of monetizing. We're going to talk about the three most common ways, the three most common ways. The first is CPM. This means cost per meal, and it doesn't mean cost per million. It means cost per thousand. I think meal, M -I -L, must have Latin roots. It must be like Latin, cost per meal. Cost per thousand downloads is the most common way that most people try to monetize. As the three ways that I'm talking about today, this is the worst of the three ways. So I'm going to share what CPM is. I'm going to explain how it works, and then I'm going to share with you a better way. I'm going to explain how that works and how people get a hold of people because you make a lot more than your CPM model. And then I'm going to explain the third way, which is the way that you can make the absolute most amount of money. CPM cost per meal means that an advertiser who, and here's kind of like the caveat to it, and it's an advertiser, they don't necessarily have your same avatar. They're just more of like a general audience advertiser. And so you might have a real estate show. You might have the podcast on podcasting. You might have a show about your health and wellness. You might have something about piloting. You might have something about, you know, aviation, or we can just talk about millions of these things. Education, we can talk about movies, whatever your podcast is about. If you were going to go with a CPM model, that would mean that you would get an advertiser on that had a general ad. They're usually about 30 seconds or a minute long. So that advertiser, they wouldn't even really conversate with you. They would end up just putting up their ads in your place. And so one of the ways that we do this is there's some platforms out there that allow these ads to happen automatically. And when I say automatically, they can be dynamic ads, which means they can do it to episodes that you've already been published, that have already been published, you published a long time ago. And they just basically push a button and then one, two, three, or four different ads, one, podcast. And when it's a dynamic ad insertion, that's going to mean that there's going to be a 30 second ad followed by another 30 second ad followed by maybe a one minute ad followed by a 30 second ad. And that's before you ever give anybody value. Before anyone ever hears anything on the podcast, before you've said anything good, they get bombarded with these CPM model advertisements. One might be about diapers. One might be about home improvement. Another might be about a meal prep service. And the fourth one might be in Spanish or some other language that you don't even understand and neither does your listener. And this is a real story. This is actual true story. And so do you want the CPM model? Maybe. So far, it doesn't sound very enticing, does it? They don't even share my same avatar, you're thinking. If they're not going to help my perfect person, why do I want them? Well, you might not want them at all. You probably don't. And how do I get paid? That's your next question. How do I get paid with CPM? Well, most of these places, they will say, hey, I'm going to give $5 CPM. Or if they really have a lot of money to throw around, they're going to say $20 CPM. And if you found a way to just get the cream of the crop, the best of the best, you might get $30 CPM. What does that mean? That means that per thousand listeners that you have, so think about it, how many listeners do you have? The average podcast has about a hundred listeners. A top 10 % podcast has about 300 listeners. The average one has about a hundred. A top 10 % has 300. A top 1 % podcast has about 3 ,500 downloads per episode. Now you know how you get paid. If I'm getting $5 CPM and I have a thousand people listening, I'm going to make $5. Awesome. Now, if I had three advertisers, I would make 15 bucks per episode. So all the time, the effort, the work, the value that you're trying to give, and then you go ahead and you make 20 bucks, you sell out, you make 20 bucks, and you turn off your listener. You're a very awesome listener that has been coming every single day that you publish an episode. They get excited about it. Well, now they have to sit through three or four ads. And by the way, one of them's in a language they don't even understand because you went with a CPM model. That type of sellout, no offense if you're doing this already, but yes, offense if you're doing this already, that type of sellout isn't going to have a prolonged active podcast. Let's just say you had a thousand people downloading and you had four ads. So you're about to make 20 bucks. Now you're probably going to have like 500 people listening because they don't like the freaking ads. So now your income goes down to 10 bucks. If on the highest end, think about the CPM being on the highest end. Like I'm really crushing it. In the top 1 % of all podcasts in the entire world, I've got about 3 ,500 say I'm even above that. I've got 4 ,000 downloads per episode. And you're looking at a CPM model where you're able to somehow negotiate 20 bucks per each episode, per each CPM, per meal, per thousand downloads. And you got 4 ,000, you just made 80 bucks per episode. I do the math on this. Let's just say you're doing one episode a week. So 52 times 80 bucks. This is the best you could do. At the end of the year, you've only made four grand. It won't even pay for your editor. That's why I don't like the CPM model. That's also why did I bring it up first? I brought it up first because it's the absolute most common way and it sucks. And people get excited because they think they're making all this money, but really they're making like $2 because listen here, I'm going back to the CPM And negotiate you $20 per meal, cost per thousand. You're going to make two bucks, two bucks. You're going to make a 10th of it because you only have a hundred listeners when you need a thousand. So you made two bucks on that episode. What can you get with two bucks today? A candy bar? So if you do this the whole year, you can buy a candy bar every single week. It sucks. Option number two is partnership. This is a sponsor that is partnered with the show. And why is this different than CPM? It's way different because in CPM, they are chasing you. They are putting it at that $5, $10, $20 per meal. And then they're reaching out to people and saying that they'll give you like $20 per thousand. And you think to yourself, Ooh, I get almost a thousand downloads per month. And so I'm going to make like 20 bucks a month. And that's one way. Okay. What is the partnership? This is when you reach out to them. When I give you an example, I coach a ton of people to do number two. And it's because I think the CPM model sucks. And so I tell them, why don't you find a partner of the show or a sponsor of the show? Now, this does not mean an advertiser. The CPM is more of an advertiser who reaches out to you and says, I'm only going to do $5 CPM. And I'm going to do it with anybody who wants to do it. When you're getting a hold of a partner to your show or a sponsor of the show, you reach out to them and then you dictate how much money you're going to be making. So let's just say you've got a hundred downloads per episode. In this case, you'd be able to command much closer to let's just say 1500 bucks a month. If you are an average podcast, you would probably be able to command about 1500 bucks a month. Let's say that your 1500 bucks means that you've got 4 .333 episodes per week, because that's how the math really works. You don't have four episodes a month. I mean, you don't have four episodes a month. You have 4 .333 episodes a month because 52 weeks divided by 12 months is 4 .333 weeks per month. And so in this case, you would be making $348 per episode. Now that's a lot better worth your time, isn't it? Think about how long does it take you to do an episode? If you have a team that edits your podcast for you, then your podcast is only going to take you about 30 to 60 minutes, maybe 90 if you're doing a little bit of research. So for example, you spend 90 minutes to do this. So I'm going to divide $348 by the 90 minutes that it takes you. 348 divided by 90 equals, I don't know why I was even thinking about 90. 90 minutes is an hour and a half. Okay. So I needed divided by 1 .5. So I did that. I was like, what the heck? Why isn't this adding up when I divide it by 90? Okay. You were making about two bucks a minute, but when you look at how much are you making per hour with that podcast, if it takes you 90 minutes to come up with the content or invite your guests, do a little bit of research and then press record, then in the partnership slash sponsorship version number two, you're making $232 per hour. That's if it takes you 90 minutes. Now, if it only takes you five minutes to do an episode, 10 minutes to do an episode, you make a lot more. On the other hand, you are editing your own podcast and it takes you 12 to 15 hours to do all the editing of post -production, create all of your marketing pieces and all of that. Then let's just divide this by 15 instead. So I'm going to do 300 divided by 15 hours. You're making about 20 bucks an hour. And that's not terrible. It's slightly higher than the average minimum wage right now. So it's close to minimum wage. It's not amazing, but it's not terrible. It's not $5 an hour, $10 an hour stuff. So that's okay. You want to spend 15 hours editing and all of this for your podcast, you make about 20 bucks an hour. If you use the partnership slash sponsorship version, that's version number two. There was CPM was number one. Partnership is number two. Number three is going to be selling your own stuff. And that's the cream of the crop. We'll be there in just a moment. So I tell a quick story. I had a podcast client. Well, still have a podcast client. But this is in the past. So Alex came to me, he wanted to make money. He had a top 1 % podcast. So he had about 3000 downloads per each episode. And I told him, Hey, if you do CPM, you're going to be able to make something like $20 CPM. You've got 3000. So that three X of what the cost per meal is. And so you make $60 per podcast. And is that how much you want to make Alex? And he would say, no, it's not worth my time. Why would want to offend my listener to listen to an ad? That's not even going to serve them that comes in in the beginning of my episode before I've even added any value. And I do all of that for 60 bucks just to lose listeners. So that later I'm only making 30 bucks because it goes from 3000 people to 1500 people now. And so of course he's going to say no. So then it goes, Alex, here's a way to partner with somebody. And in the real estate space, I said, one of the main people that you reach out to is a lender. Alex has a real estate podcast. And so he teaches fix and flip and he teaches mindset and he teaches how to scale a business. And when it comes to him getting his sponsor and reaching out to them as a partner of the show, I told him one of the best, easiest places that you can go is a lender. So think about this, Alex, think about a private money lender, a hard money lender, somebody who lands on these fix and flips. Now you can still do coaching for listener and they still need somebody to fund the deals. So you having a fix and flip partner, it definitely both of you serve the same person, but neither of you take away business from the other person. Now, in fact, Alex probably makes more money if he has somebody who can really support his people with money. And the person who lends the money, the hard money lender, probably makes more money when Alex has more clients as well. So it's a win -win. Instead of detracting from the business that Alex can get, it actually supports his business and he's more profitable and effective and his sponsor or his partner of the show is more effective. And Alex says, well, with my 3000 plus downloads a month, because I'm in a top 1%, I could either make 60 bucks if I do CPM or if I do this partnership, how much do you think I can make? So five to 10 grand. And he's like, five to 10 grand? Are you sure? And I'm like dead serious. I am sure you could easily make five to 10 grand if you are the one who reaches out to them. So I taught him how to reach out to them. He and I even role played. So he practiced it. Step one was we decided who are the people that can help him. He writes down the hard money lender. Step two is we decide how do we play to the player? How do we give a pitch to that hard money lender? How do we give them that what's in it for me so that they even give a darn? And step three is to do that first call and to go out of your comfort zone and to call the hard money lender and let them know about the opportunity. So he did this behind my back. Well, we at the end of a coaching call, I said, okay, go and do this. And so he did, but he did it with two people instead of one. So he asked the first person for about five grand. And then he called the second person and asked them for about five grand. And so guess what? Alex could have made 60 bucks an episode, but instead he made 10 ,000 a month. He was doing eight or nine episodes a month. So I need to put in this math, $10 ,000 divided by approximately nine episodes a month because he's doing two a week. So this is an approximation. He's making $1 ,111 every single episode. He's making $1 ,111 per episode. And I know for a fact that Alex has my team doing all of the back office. So it takes him about 45 minutes to make $1 ,111. So I'm going to multiply this by 0 .75 because it's three quarters of an hour that it takes him to do that. Oh, I need to divide it by 0 .75. And he's making $1 ,481 an hour with his podcast. So partnership slash sponsorship, way better than CPM. Do you still want to do that CPM model? No. So the partnership is a much better way to go because Alex was able to make $1 ,400 in per hour instead of 60 bucks or 70 bucks an hour. Much, much better. Now let's go to the third option. The third option is selling your own stuff and this can yield you so much more fruit than the partnership slash sponsorship. So if you want to make more than $1 ,481 .33 every F an hour that you do your podcast, stay tuned. We'll be right back after this episode. Hey my friend, as you know, this episode is sponsored by my company, growyourshow .com. We want you to be able to have the best tools at your disposal without costing you a whole arm and a leg. So right now you can get a free list of vetted equipment that like mics, mixers, webcams, sound treatment, editing software, everything that you need. I created the whole PDF with direct purchase links just to save you time and money to help it be more convenient for you. So this free PDF will help you skip all the guesswork. If it's on there, it's vetted and approved by yours truly. And if it's not on there, it's probably not worth the money. So go ahead and get yours at growyourshow .com forward slash PDF. Let's get back into the show. We are back. We are talking about the three most common ways that people monetize their show. The first was the CPM model. We decided together that that one effing sucks. The second one was partnership. That one's really pretty cool. Like that one's pretty cool. Remember Alex making $1 ,481 .33 every single hour that he works on his podcast. When you like that too, or would you like something even a step better? A step better would be you selling your own services. You would sell your own coaching, your own consulting, whatever you can do, coaching masterminds for your listener. And let's imagine that you've got a products. One of my products is above $40 ,000. So the client would come to us and they would pay about $3 ,000. They would pay a little upfront fee and then they would pay about three grand a month and we would serve them for the 12 months. Okay. We would serve them for the next 12 months. So that ends up being more than 40 grand. When you add the three grand a month, but times 12 plus the down payment as well, it's over 40 grand. So for that package, if I get one person, just one per month, then we gross just like you would be grossing the CPM. You would be grossing the partnership money or sponsorship money. You are also grossing. You're selling your own services. So in this case, if all I do is just sell one person, that one package, and I have other packages available that are more and less, all I do is just sell one of those packages once a month and I'm doing four or five or six episodes each week. If I just sell one a month, then I make 40 grand every month, more than 40 grand every month. I'm doing the math right now on my phone, on my calculator, my trusty phone calculator. And I'm assuming that I do four episodes per week, four episodes a week. Now, two of those episodes are 10 minutes on average. We'll just say 12 minutes on average. Let's just say 15 minutes on average because that'll be actually easier with math. And the others are 45 minutes on average. And so I've got basically two hours of work, two hours of work each week because I've got a 45, a 15, a 45 and a 15. I hope that's making sense. So two hours a week. And so I've got 17 episodes happening and almost exactly 17 hours of work. Now, if I divide $40 ,000 by 17 hours of work, it's $2 ,352 .94. It's $2 ,352 .94. So let's recap. Option number one, CPM. You can make 60 bucks -ish max, maybe $5 per episode. Let's imagine that you are doing four episodes a week. And so you're making, let's just say 40 bucks a week. That's a hundred. And anyway, I don't want to give you too much numbers. I'm now realizing that I keep throwing out numbers and that's going to get confusing. So I'm not going to waste my time doing all of that since this is an audio and I don't have something to show you. I'm just going to explain it to you. On one way, you are most likely making about 20 bucks an hour. The next one, you're making closer to a thousand bucks an hour. And on the next one, you're making about $2 ,000 per hour. Now for me, I'm doing four episodes a week. If I was only doing one episode a week, of course I could quadruple that, but I want to make sure that I'm always making that. I want to make sure that I'm always bringing in at least one client a month, one new client a month. So I'm not going to waste my time only doing four episodes in the month. Instead, I'm going to go much more. I'm going to do 16, 17 episodes in the month. If I do 17 episodes in a month, I'm still making $2 ,352 and 94 cents per hour. And in additionally, about $2 ,352 per episode. Now, if with that type of motivation, think about it for a second. If you were doing four episodes a week and you were selling one $40 ,000 thing per month, would you have some motivation to get behind the mic? If you knew that you were going to record for about an hour and you're going to make over two grand, it would become your favorite thing to do. You would choose to record an episode before you would go do something else that was fun. Because it's like, I can get behind the mic for just an hour and I can make two grand. So let's recap. CPM, shitty. Partnership, pretty freaking good. Selling your own crap, your own good stuff. Hopefully nobody sells crap. Hopefully you're only selling really quality things that you've got. Well, that's the way to make the most amount of money. So those were the three most common ways that podcasters make money through their podcast. We talked about how they work and we talked about why the last one is the one that I suggest that you get started on right now. And if you need help, my name is Adam Adams. I coach people for a living. I support people. I help you to be able to make your 40 grand a month, even just 10 or 20 grand a month through your podcast because you're doing fewer episodes. That's great too. That's really, really good too. And I coach people to do that. So feel free to go into the show notes and schedule a call with me so that you and I can start working together. That's going to be a discovery call. And in the show notes is a link to our website. It's growyourshow .com. You'll see the link. And at the top right, you see a button. The button says schedule a discovery call. It's green. It's bright. It tells you exactly what I'm telling you right now. So you just go to that button, push it and schedule a call with me and we will help you start making your 10, 20, 30 or $40 ,000 a month through your podcast by selling your own stuff. See you on the next episode. This is serious. Don't go. Now that you've gotten whatever value that you feel that you got the actionable takeaways, you need to implement the stuff that you learn. If you remember me talking about bird church once and they learn how to fly and then they walk home. I don't want you to walk home. I want you to fly home. So take the steps, take the actionable steps for your benefits that you can become a better podcaster. That's the only thing that I ask of you. And I'll see you for more actionable tips on the very next episode.