Episode 419

How are Podcasts Profitable? The Essential Guide to Podcasting Profitability

As podcasting continues to gain popularity, the question of profitability and attracting sponsor investments has become more pertinent than ever. In our latest podcast episode, we dive into these subjects, providing valuable insights for anyone interested in turning their podcasting passion into a thriving business.

In today’s episode, we’re deconstructing an article written by HubSpot about podcast profitability: HubSpot Blog, Inside Podcasting’s Profitability Dilemma.

The key points we’re honing in on today are:

Have podcasts been a good investment for companies?

While companies are continuing to spend on podcast advertising (to the tune of $2.25 billion in 2023) what is considered a “good ROI” is changing.

Podcast advertising (along with other creator-focused mediums) is no longer about awareness or top-of-funnel exposure. Instead, companies are looking to invest in shows that can demonstrate an ability to convert listeners into customers — and quickly.

So what’s next?

Podcasting is far from over, but the industry is in a period of transition where companies and creators should evaluate where their time and resources are most valuable.

If companies want to continue investing in the production of their own shows or funding creator-led shows, the path to ROI will need to be clear, swift, and able to provide more value than a high follower count.

It also means aspiring podcasters shouldn’t expect to be next in line for a blockbuster deal like Alex Cooper’s $60 million Spotify payday. However, exploring independent podcasting to connect with niche audiences can be a valuable channel for creators and entrepreneurs who are looking to expand and connect with their audiences and customers.

The podcast industry is primed for its next disruptor to help the business side be as democratized as distribution.
– HubSpot Blog, Inside Podcasting’s Profitability Dilemma

After reading the article, there were five key takeaways I wanted to share with you.

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Now, Let’s Apply it to Your Podcast Profitability

1. It’s NOT All About Having Attention

Sponsors are no longer simply looking for shows with large audiences. The focus has shifted towards podcasts that can demonstrate an ability to convert listeners into customers. It’s about engagement, action, and conversion, rather than mere attention. In order to attract sponsor investments, podcasters need to show that they can deliver tangible results, proving that their listeners are willing and able to take the actions that sponsors are interested in.

2. Conversions Over Downloads

The concept of conversions is a key element in determining podcast profitability. Conversions could mean a variety of actions, from clicking a link to making a purchase. The ability to track these conversions is crucial. Tracking podcast metrics, such as conversion rates and click rates, is a significant part of this process. It provides a way to measure the effectiveness of a podcast in driving the desired actions, thereby demonstrating its value to potential sponsors.

3. Know Your Numbers BEFORE You Have Sponsors

Furthermore, we delve into the importance of understanding podcast metrics and using them to inform future decisions. Being able to interpret important data like conversions, click rates, and download numbers can provide a wealth of information. This information can then be used to improve podcast content, target the right audience, and attract potential sponsors.

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4. Track ALL Your Platform Numbers

In addition to podcast metrics, we must emphasize the importance of tracking metrics across all content platforms. This includes your email marketing campaigns, YouTube channel, and any other platform where you distribute content. Having a comprehensive view of your content’s performance across different platforms can help you understand your overall reach, engagement, and conversion rates. This comprehensive approach to metrics tracking can help you make well-informed decisions about future investments and partnerships.

5. Engagement + Conversion = Sponsored Deals

Finally, we explore how independent podcasters can demonstrate their worth and attract sponsor investments. By showcasing engagement metrics and conversion rates, independent podcasters can prove that they can deliver results for sponsors. This can make them an attractive investment opportunity, even if they don’t have a large audience.

You Can Do It!

In conclusion, turning a podcasting passion into a profitable venture involves more than just attracting a large audience. It requires a deep understanding of what sponsors are looking for, a mastery of podcast metrics, and the ability to convert listeners into customers. By focusing on these areas, podcasters can increase their chances of attracting sponsor investments and turning their passion into a profitable business.

Video Recap of Today’s Episode: