How are Podcasts Profitable? The Essential Guide to Podcasting Profitability

Ever wondered how podcasting can turn from a passion project into a profitable venture? Buckle up as we unravel the changing podcasting landscape and give you the low-down on what sponsors are really looking for when they invest in a show. 

In this episode, I'm taking you beyond the game of numbers and explaining why attracting a large audience is not enough -- converting your listeners into customers is what counts. We'll tap into the heart of podcasting profitability, delving into the mindset of big companies and how they decide which podcasters to partner with.

But that's not all! I'm also highlighting the importance of keeping tabs on your podcast metrics. Let me guide you in tracking and interpreting essential data like conversions, click rates, etc. Understanding these statistics is vital to attracting potential sponsors and making well-informed decisions about future investments and partnerships. 

We take it one step further by showing you how to measure success across all your content platforms, including your podcast, emails, and YouTube channel. So join us as we navigate this exciting world of podcasting profitability and help you turn your podcasting passion into a thriving business.

Join me and my mentor, Amy Porterfield, as she teaches you LIVE how to create your first (or next) digital course to make real money. These trainings are world-class; you won't find anything else as impactful this year. Go to krystalproffitt.com/no-fuss to register. *affiliate link

Click the "Send Krystal a Text Message" link above to send us your questions, comments, and feedback on the show! (Pssst...we'll do giveaways in upcoming episodes so make sure you leave your name & podcast title.)

Chapters

• 0:00 Podcasting's Profitability in Question
• 13:52 Tracking Podcast Metrics and Generating Revenue
• 25:46 Track All Content Metrics

Transcript

Krystal: 3:05

We need to talk about the profitability of podcasting. This is something that people have been asking me about for a while is should I still start a podcast? Is it something that I can actually make money in, and what's actually happening in the industry? So that is what we are talking about today. So let's get right to it. Welcome to the Profit Podcast, where we teach you how to start, launch and market your content with confidence. I'm your host, crystal Prophet, and I'm so excited that you're here. Thanks for hanging out with me today, because if you've been trying to figure out the world of content creation, this is the show that will help be your time saving shortcut. So let's get right to it, shall we?

Krystal: 3:52

So the idea for this video really comes from being on HubSpot's email list, and anytime I see something related to content creation or podcasting, I go check it out. I love it whenever I can have a credible resource for research or insights or data to share with my audience, and today's episode is really focusing on this article that came out called Inside Podcasting's Profitability Delimit. Now, this article was published on August 2nd 2023. So whenever you're watching this, go check and see if there's any updates. But after reading it, I came to a few conclusions that I wanted to share with you. So first let me pull up some of the pieces of the article that I wanted to highlight because I wanted to share them with you and, of course, I'll link to the whole thing and you can go check it out.

Krystal: 4:50

But I wanted to talk about larger organizations that are investing in podcasting and continue to invest because things have changed. Like gone are the days of the big boom that we saw during 2020, when a lot of people just started podcasts. They weren't sure what they were doing, and then here we are, a few years later, and people are trying to figure out do I keep doing this? Or they ghosted their audience a long time ago and just completely gave up, which you know, that happens. Podfade is a real thing, but I want to go into this. So the title of this says have podcasts been a good investment for companies? The US economy has been teetering on the edge of a recession for the past year. Typically, when that happens, marketing and advertising budgets are among the first to go for companies that want to curb spending. This is so, so true. The podcast industry has seen this in real time and has been in its own recession late 2022. Now I want to stop right here because I'm not into the fear mongering and all the things of the economies and financial worlds, but I have seen this huge investment in these larger podcasts dwindling down. We all have seen headlines about Joe Rogan's show and then armchair expert and call her daddy All of these really large Spotify things that happened a few years ago. That was good, bad. The other, and there was a lot of like millions and millions of dollars that were invested in these specific shows and that was kind of the approach for several months, like 12 to 24 months, a lot of companies were doing this and that has kind of it's kind of gone like the wayside. You're not hearing, that's not in headlines, that Spotify or other Apple, these other exclusive shows are making these huge like millions and millions of dollar brand deals.

Krystal: 6:53

But let's continue down the article. So it says, while companies are continuing to spend on podcast advertising to the tune of 2.25 billion in 2023, what is considered a quote good ROI is changing. Now I really wanted to focus on this next part of the article because this is where this audience really needs to pay attention. If you're thinking about getting sponsorships for your show, or you're wondering what can I do? What can I offer my potential partners that I wanna work with? This is the key piece that I want you to hone in on. So it says podcast advertising, along with other creator focused mediums, is no longer about awareness or top of funnel exposure. Okay, I'm gonna say that again 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.

Krystal: 8:00

Now, why is this important for you? The reason why this is important is because it's not just okay to you know, partner with a brain and say hey, look, I have this huge audience here. Like, let's throw an ad in and see what happens. People want demonstrated ability for their investment. They want to know hey, if I give you $10,000 for this ad spot on your podcast, what are you gonna give me? Like, are your listeners gonna convert? Are they engaged? Are they actually clicking and doing the thing that you asked them to do, whether it's going to a website and putting in a promo code, or going to a specific page and registering for a free product or a download or a trial, or whatever it is that you're doing? Are they actually doing it? Are your listeners doing the thing that you asked them to do?

Krystal: 8:50

And now you're thinking, crystal, I don't have a huge show, like I'm an independent podcaster. I don't have millions of listeners or even thousands of listeners and millions of downloads. Why is this relevant for me? Well, I want you to first like let's adopt the mentality of maybe your show isn't that big yet. Let's throw that yet on there, because I hope that that is where you're going right. That's your goal. I hope that you're aiming for the stars and hoping for a larger audience, a larger podcast, a larger YouTube channel than what you have today. So that's step number one.

Krystal: 9:28

But the second piece is you have this insider information of what brands are looking for. Like it said right here in this article, they're not just looking to buy attention. They want to know that, if they come to you as a sponsor, that you are going to deliver. You're actually going to deliver some results, not just say, oh look, I got this many downloads, yeah, but how many people did you actually get from your podcast to do the thing that you asked them to do, whether it was in a host read ad or it was a link in your podcast description, or it was something on your website, or you know a link in bio and your Instagram. Whatever it is that you're asking people to do, are they actually doing it? And when I think about this, I don't want you to think about the fact that you've never worked with a brand, you've never partnered with a sponsor, and say, well, crystal, I don't have any of these metrics. I don't know. Yes, you do.

Krystal: 10:27

Are people doing the things today that you're asking them to do? If you ask people to subscribe, are they doing that? If you ask them to take a screenshot and share it on Instagram about their favorite thing which I encourage everybody to do, by the way like, if you haven't already, make sure you're subscribed or following this podcast, that way, you don't miss any of the content that we're putting out, and I would love it if you would take a screenshot and share on Instagram. Okay, there we go. Let's get back to the content today.

Krystal: 10:56

But it's so important that you have metrics that you can show a sponsor and say look, my audience is giving me this kind of engagement today, and this is for my own products. This isn't even for something that has paid advertising dollars behind it. They're just doing this organically because they are connected with me and they want to see the things that I'm sharing. They want those resources. They want to check out the products that I'm recommending Look, my Google Analytics can tell you that, or my podcast downloads, or the clicks on my website. There's a lot of different ways that you can look at the data that you have and the metrics that brands want to see to showcase that you are a brand worth partnering with, and looking into different ways that you can be creative on how to showcase your numbers in those types of engagements. Okay, let's move on. Let's go back to the article.

Krystal: 11:57

Okay, so the next piece of it is it's also worth noting that advertising isn't the only way companies have invested in podcasting. Exclusive deals with creators and the production of branded shows were also on the rise. During the recent podcast boom From 2018 through 2022, many companies were in experimentation mode as podcasting shifted from an emerging channel to a core medium. Now, this is especially true for the ones where Spotify invested a ton of money in all these shows and those shows are no longer around or they broke their contract. Spotify there's a few I'm not going to say I don't like to to, you know, start some drama or gossip, like all those things. But I will say there are a lot of these deals that happen on these exclusive channels that are no longer around or they jump shipped. They were able to break their lease and say I'm out of here. I don't like this situation that's going on. So I will say that, yes, some brands are investing in exclusive podcasts still, but it's not what we're seeing today.

Krystal: 13:10

So, according to this HubSpot article, it says well, what is next? And it says podcasting is far from over. Duh like, we are just getting started. We're still on the infancy stage here, but the industry is in a period of transition where companies and creators should evaluate where their time and resources are most valuable. And I'm going to keep reading because this is a good point. 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. So this is exactly what we just said.

Krystal: 13:53

As another point in this article is, you can't just come to a brand and say, look, I'm getting tens of thousands of downloads for every single episode. Yeah, that's fantastic, but what are they doing? Like downloads aren't good enough anymore. You need to have conversions, you need to have metrics, you need to have quantifiable information, the numbers to show that people are actually engaging with your podcast. Because, unlike other platforms, like on YouTube, you can see there's likes, there's comments, there's thumbs up, thumbs down, like you see all the engagement pieces that happen on a visual platform like a YouTube channel, but with podcasting it's pretty much behind the scenes, unless you share those things publicly with the people that you're advertising with or they're sponsoring your content. Like, no one knows what's actually going on behind the scenes and you can't just expect to unveil your numbers to a sponsor or a brand and then say, oh my gosh, this is exactly what we were looking for. They're going to say, yeah, that's great, but we need more than just downloads. We need to know that our $10,000 investment or $50,000 investment or even a $500 investment is going to pay off. What numbers do you have to show for that?

Krystal: 15:16

So, again, if you're thinking, well, Crystal, you haven't really talked about this before. Why is this something you're bringing up now? Well, it's because I've been looking at these things for my own podcast, my own metrics. I've been looking at conversion rates, click rates. I've been looking at the different pieces of my content and tracking them on a regular basis, and I'm encouraging you to do the same as well. Are you tracking your podcast downloads? Are you tracking them by app? Are you looking at how many downloads you're getting on your show in the first seven days of an episode or the first 30 days? These are the things that I recently started tracking and I will call myself out on this that I was not doing this very well.

Krystal: 16:00

For a long time I was kind of avoidant to the whole situation because I would just keep looking at my numbers and say, oh, they're up, or they're the same, or oh, they took a little dip, but that's okay, that's over the holidays, it's usually when people are doing whatever and they're not really tuned in to podcast, about podcasting, about podcasting, about podcasting. There's a lot of. I know it's meta, so meta the show that I have, but you can hear what I'm saying. I didn't, I didn't. Okay, I'm calling myself out. I would just open up Buzzsprout.

Krystal: 16:36

I would look at all of my numbers across the board. I would put on the filter that says all time and it would just show oh, it's going up into the right. That's what we want, right? We want our numbers to go up into the right. We don't want them to plateau and be flat. We also don't want them to go down very dramatically and drastically. We want everything to steadily go up into the right and that's what I was doing and I feel like it's been a disservice as me as your podcast coach. If we're brand new, then welcome. I am now your podcast coach. I hope so. I hope that you're gonna subscribe and come back and listen to this podcast and watch the YouTube video on a regular basis, because I wanna show you how to take the metrics that you already have, even if they're not a lot. Okay, because I know somebody's like I don't have a bunch. I'm a little embarrassed about my numbers.

Krystal: 17:30

You need to start tracking things today so that you can plan for the partnerships and the brand deals that you're gonna have in the future, because if you're not tracking them today, let's say, the brand that your dream brand that you would love to work with is coming knocking on your door and then all of a sudden, they're like hey, we wanna give you $5,000 as an investment in your brand. What can you give us? I mean, typically, deals don't work that way. But just bear with me for a second. What if you said well, I know that on my podcast I get so many listens for a seven day period. So I know that if I put out a dedicated episode that is talking about your brand and what you do, there will be this many people that listen.

Krystal: 18:20

But I will take it one step further. I will also include a dynamic ad with a call to action that will be placed in all of my podcast episodes, and in that ad I'm gonna say make sure you go to this website, enter in this code or register for this thing and make it happen, and I know that I can do this because I've done it with my own products. Now this is where the scenario kind of ends of you talking to a brand and you have to go back and look at your own metrics of what you're doing today. Do you have affiliate products? I don't even care if it's an Amazon affiliate stuff, or maybe it's your own book. Like, if you have a book, whether it's an ebook or a physical book are you selling those today? Do you have a digital course? Do you have a low ticket offer that you were selling today? And you know those people came from your podcast. There's different things that you can set up to where you can track these things on the back end.

Krystal: 19:14

But I really just wanted to share all these ideas with you today because, even if you have a smaller show, that doesn't mean that you're never going to grow or you're never going to have a more expansive audience, or you can really take these metrics and take everything that you have today, all of your hard work, the incredible things that you're creating. You could take all of these ideas and go to a brand and say look, this is what I've been doing for my own podcast and I know that I can get results for your product and this is why we should partner together. That sounds so much more confident than someone's like oh yeah, sure, I don't know. I've never worked with a brand before. I don't even know what conversions could look like. I don't even know how many clicks I get. You sound so much more confident when you know the numbers that you have for your podcast, the numbers you have on your website, if you have. This is another reason why I tell everybody you need a website for your podcast. But it's just one of those things that everything works cohesively when you think about them as an ecosystem of all of your content.

Krystal: 20:23

But I want to go back to the article because there was a few other things that I want to throw in here. So it says 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 we talked about this earlier. Like gone are the days of the huge payouts for these Spotify exclusive shows. However, exploring independent podcasting that's you, that's me, that's what we're talking about today 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 disrupt disruptor to help the business side be as democratized as distribution. Now, the other reason why I wanted to share this article with you is because one I wanted you to have another resource. If you're into business, if you're into marketing, go check out HubSpots blogs. They always have really great insights and resources. But I think it's also important to look at the industry across the board.

Krystal: 21:36

Maybe podcast maybe you're not like me right Like I'm a podcast educator. I have been in the podcast space for several years now and I get into this. I know it out about these things right. This is part of my job is just to stay up to date on the concepts, get a pulse of what's going on in the larger podcast industry. But it's also for you to think about yourself as not just a quote podcaster, but think about your podcast as a business. How can you start generating revenue from your podcast? How can you use the audience that you've built within your show to offer products and services that are specific to your audience? How can you start offering merchandise or maybe other really specific affiliate programs that would work well for the audience that you've already built?

Krystal: 22:31

I want you to think bigger, and I've never really targeted this audience to be like hobby podcasters or people that just want to start a show, just because I know so many of you that want to use a podcast as the main marketing tool for the business that you're building, and so you need to think about your podcast is part of your business. You need to think about it that way, not just oh, that's my lead generator, I'm just putting out free content to put out free content. Somebody told me somewhere along the way I need to put out something. It's kind of like my business card. It's the thing, it's the beacon that I'm using to call my customers to me. But you're also missing the mark in the opportunity that you could have if you started thinking more strategically about your content, about your business, and your podcast needs to be part of that strategy. So I want to know your thoughts. So, whether you're watching this on YouTube or you're listening on the podcast, I want you to comment and tell me what do you think about thinking about your podcast as part of your business? Tell me below or send me a message on Instagram. I would love to know your thoughts because let's get this conversation going.

Krystal: 23:49

Like I said previously, this isn't a topic that we cover a lot here on the channel or on the podcast, because it's not really something that you have come to me and asked about too much. But there are so many of you that are in this audience. You've been around here for a while and you're in this growth spot. We're no longer just talking about starting a podcast. That was several years ago. I know you you I'm pointing to you right, like you listener, you got the earbuds in. Right now I'm talking to you. You've been listening to this show for a long time. You've had your podcast, let's say, for 12, 24 months, and you're thinking what now? What's the next step?

Krystal: 24:32

Well, the next step is getting more strategic with the content you already have, thinking about your audiences in a much bigger way and asking how can I find partnerships, how can I work with brands that want to elevate my audience's experience? Because you're not just looking for that get rich quick like oh, let me find a brand that'll pay me thousands of dollars. I mean, yeah, that's cool, but it's not going to be sustainable and that's not something that you can really pull out of thin air when you need to. You want to think about strategic partnerships that will offer value to you, to the brand and to your audience. You're going to have that win, win, win. That is absolutely going to be something that is sustainable and help your show and your audience continue to grow. But that's all I have for you today.

Krystal: 25:23

I'm going to link to this article in the show notes. It's going to be in the video description if you're watching on YouTube, but I want you to go check it out. It was so helpful and I'm going to do more stuff like this If y'all want it. I will, you know, do more of the high level podcast industry, what is going on? But I wanted to cover the profitability of podcasting and how things are changing so that you are aware.

Krystal: 25:47

So your takeaway from today is start tracking your metrics, all of your content metrics, not just your podcast, not just your email, not just your YouTube channel. Start tracking all of them and let me know if you want me to show you how I'm doing this in my business, so that I can give you a visual of what that looks like and how we are doing this at profit media. But that's all I have for you today. So if you're watching on the YouTube channel, make sure you hit that subscribe. If you're listening on the podcast, hit that follow button wherever you are listening and make sure you tune in the next week as we share more about tips, strategies and all things content creation. But, as always, remember, keep it up. We all have to start somewhere.