Updated January 25, 2019
John Lee Dumas here, founder and host of Entrepreneurs on Fire, an award-winning Podcast where I’ve interviewed over 2,000 successful Entrepreneurs. I’m excited to drop some Podcast Sponsorship knowledge bombs on you today!
Before we dive in, make sure to check out my Free Podcast Course to learn how to create and launch YOUR own podcast!
When I launched Entrepreneurs on Fire back in September of 2012, I had no idea what the source of my income would be.
However, I did know that if I provided amazing value to my listeners, the income side of things would follow.
“You can have everything in life you want, if you will just help other people get what they want.” ~ Zig Ziglar
Sure enough, after 6 months our listenership began to attract sponsors.
The month of April, 2013 turned out to be our first 5-figure month. We generated $12,584, and 85% came directly from sponsorships.
We spent a lot of months in the red leading up to that. You can check out our first 365 days – income, expenses, wins and losses – in this income report.
In September of 2013, we began releasing a monthly income report and have now published well over 60 of these reports.
Today, sponsorships make up about 30% of our monthly income, as we’ve introduced funnels, affiliate relationships, products, and services into our business as well, including:
- Your Big Idea & Real Revenue
- The Freedom Journal, The Mastery Journal, & The Podcast Journal,
- Free Podcast Course & Podcasters’ Paradise
The rest of this post is focused on podcast sponsorships, specifically best practices and approaches, and just so you know: we express a lot of personal opinions here, too. :)
This guide is not meant to communicate that podcast sponsorships are the be-all, end-all when it comes to monetizing your podcast.
In fact, there are several other ways – arguably better ways – to monetize your podcast outside of sponsorships.
Because when it comes down to it, bringing on sponsors puts you at risk for diluting your show, plus it takes time away you being able to share your own products and services with your audience.
Alright, we know what you came here for, so here it is…
All things Podcast Sponsorships
Let’s get one thing straight: if you start a podcast today, will sponsors be lined up at your doorstep tomorrow?
No, they will not be lined up at your door.
Can you start a podcast today in a niche you are passionate and knowledgeable about; work hard for a significant amount of time providing free, valuable, and consistent content; build a captive and engaged audience; and THEN have sponsors knocking at your door to get in front of your listeners?
Let’s take a minute to turn back the clock and go through my first 6 months, which we’ll call the ‘Pre-Podcast Sponsorship Phase’
I launched on September 22nd, 2012 to four straight days of crickets, also known as no downloads. Zero, zip, zilch.
Then, as my guests began sharing their interviews with their audiences, the download numbers began to climb.
Next thing I knew, I was ranking high in the “New and Noteworthy” section of iTunes, which began to drive a ton of organic traffic my way.
My first email every morning was to my featured guest whose interview went live that day.
Here’s what the email said:
Thank you so much for sharing your amazing journey on Entrepreneurs on Fire. I would be honored if you would share with your audience.
Here are the links if you decide to do so. <insert links here>
Thank you again for igniting the world!“
The email template I use today is available for download at the end of this post.
Is this email corny?
Was it effective?
Heck Yeah! :)
Soon, the combination of Entrepreneurs on Fire being shared with massive audiences daily, plus the organic traffic coming my way as a result of ranking high in New and Noteworthy, got the Entrepreneurs on Fire “snowball effect” rolling.
Our guests sharing Entrepreneurs on Fire with their audiences resulted in more downloads; more downloads resulted in higher rankings in iTunes; higher rankings in iTunes resulted in more organic downloads; and more coal was being added to the fire daily!
Within 3 months of launch, Entrepreneurs on Fire was generating over 100,000 unique downloads a month.
This success landed me a speaking engagement at NMX Blog World in Vegas, January 2013.
This was the same conference I had attended just six months prior as an attendee.
Now I was speaking and hanging out with other speakers, and it was amazing!
The conference was powerful, and the credibility from speaking at NMX in Vegas landed me interviews with Tim Ferriss and Barbara Corcoran in rapid succession.
Then things really started to take off.
In February 2013 I published Podcast Launch: A step by step guide to launching your Podcast.
Podcast Launch immediately became the #1 ranked book in Amazon on Podcasting (and remains so), with over 500 5-star reviews.
Podcast Launch established Entrepreneurs On Fire and myself as an authority figure of sorts on podcasting, and because of that, other opportunities began to appear.
In mid-March, I was approached by 3 sponsors.
I kindly replied by asking for a week to consider the opportunity, and then I immediately got on the phone with a friend and fellow podcaster who had been in this game for a while to ask for some unbiased advice.
During our conversation, I found out what sponsors have come to expect from sponsorships and podcast hosts.
I’m about to reveal what I learned on that call, and in the 5+ years that have followed while working with over 100 sponsors.
Below is the “Industry Standard”.
Always remember that YOU are the host of your show and should propose any arrangement you feel is best for you and your listeners. If the interested sponsor is not game, then bye, bye!
I ONLY partner with sponsors who will add value to Fire Nation, and I never hesitate to turn away sponsors that do not have my listeners’ best interests at heart.
I have created many valuable relationships this way, and many of my current sponsors stay with Entrepreneurs On Fire month after month because I strive to create a win-win-win in every partnership.
Industry Standard for Podcast Sponsorships
Check out the ‘Podcast Sponsorship Calculator‘ to see what you could ask of sponsors given your current download numbers.
The current “Industry Standard” podcast sponsorship is a combo 15-second Pre-Roll and a 60-second Midroll.
Pre-Roll: Prior to launching into the main content, the host will talk about the sponsor’s product or service for 15-seconds.
When I was doing pre-rolls on Entrepreneurs on Fire, I would insert them right after my episode introduction: Click here to listen to a sample.
Midroll: You have lot more flexibility here.
Typically your Midroll is inserted somewhere around the 40 – 70% mark of the podcast episode.
During these 60 seconds the host will talk about the sponsor’s product or service, often sharing a personal story if possible and revealing some of the features and benefits. Click here to listen to a sample.
Another opportunity for sponsorships is a Post-Roll, which is typically between 15 – 30 seconds. This is the last call to action your listeners will hear, and on Entrepreneurs on Fire it’s proving to be a call to action that drives results.
So what exactly are these “Industry Standards” for Podcast Sponsorships anyhow?
A 15-second Pre-Roll commands $18 per 1000 CPMs (listens).
A 60-second Mid-Roll commands $25 per 1000 CPMs (listens).
A 30-second Post-Roll commands $10 per 1000 CPMs (listens).
For ease of math purposes, let’s say your podcast averages 10,000 listens per episode (you find this number by guaranteeing the number of listens on any given episodes 6 weeks post-publishing).
18 x 10 (for the 10,000 listens) = $180 is the cost to the sponsor for a Pre-Roll.
25 x 10 (for the 10,000 listens) = $250 is the cost to the sponsor for a Midroll.
Therefore, your 10,000 per episode podcast would cost a sponsor $430 for a Pre-Roll/Midroll combo.
Let’s say you allow 2 sponsors per episode, now you are talking $860 per episode.
If your show is 4 episodes a month: $3,440
If your show is 8 episodes a month: $6,880
If your show is 30 episodes a month: $25,800
The above model is only the “industry standard”, and I have structured deals with both higher and lower CPMs.
Always remember: when you create an agreement with a sponsor, regardless of industry standard and CPMs and CPAs – it has to make sense for you and your business based on your current goals.
A common question is, “How do I know what my ‘average’ listens are so I can determine my CPM rate?“
Look at the download numbers of your episodes starting at 6 weeks out. Remember, you’re guaranteeing a MINIMUM number of listens, so you need to be confident that you are fulfilling your end of the bargain.
Once you see that EVERY episode is over a certain number of downloads by week 6, that is your CPM.
You can adjust this monthly as your show grows. What we’ve done here at Entrepreneurs On Fire is sign a sponsorship contract for a quarter, then re-evaluate at the end of that quarter and renegotiate.
Sponsoring your own podcast
Thus far, we’ve only talked about what it would look like for you to bring a sponsor onto your show.
What we haven’t mentioned yet is the incredible value in sponsoring your own podcast.
This means you create pre-rolls, midrolls, and/or post-rolls for your podcast that promote and market your own products and services, and this can be HUGELY beneficial in so many ways, including:
- Growing your email list by offering free downloads or checklists when someone opts in;
- Letting your audience know about free courses you’ve created, that then lead to paid products you have;
- Sharing opportunities like coaching or events with your audience – things you’ve created as a direct result of what they’ve asked you for;
- Continuing to share your brand message with those who are choosing to tune in to hear YOU;
- And the list goes on…
I want to include this here because we’ve sponsored our own podcast multiple times, and it has proven to be a very strong call to action and backend conversion for us due to the fact that we’re not “marketing” to a “cold audience”.
The listeners who tune in to your podcast know, like, and trust you, and they value your expertise and the opinions and advice you have to share. That’s why podcast sponsorships work.
So don’t always think that it has to be you featuring someone else’s products and services.
Why not leverage your podcast as a marketing channel for YOU!?
Pricing Model for Podcast Sponsorships: CPM vs CPA
Alright, now that you know there are two main options for sponsorships: either having someone pay you to sponsor their product or service OR sharing your own product or service, let’s take a look at the different pricing models when bringing on a sponsor.
There are 3 main pricing models you can use with your sponsors:
- Cost per mille (CPM): Cost per thousand impressions (listens in the podcast world).
- Cost per Acquisition (CPA): Cost to acquire 1 customer.
- You name the price, sponsors say yes or no (this model great for new shows that have a niche and engaged audience, but not a ton of listens).
Cost per mille (CPM)
This is only going to work financially for BIG shows with a lot of listens.
The Podcast Sponsorship Calculator will prove this.
Cost per Acquisition (CPA)
This is an underrated option and it’s how I first started monetizing with Entrepreneurs on Fire.
In Podcasters’ Paradise I have a great video tutorial that walks you through the entire process of setting up a partnership with Audible, where you will get paid a certain dollar amount for every customer you send to their sales page that results in a sign up for a free audio book and free 30-day membership.
For those of you who have heard me say EOFireBook.com, that’s my Audible affiliate link.
In the Podcasters’ Paradise tutorial, I delve into why it was so strategic to use that domain as a forwarding domain instead of the link Audible provides.
This is a perfect example of the CPA model: there is no upfront or set sponsorship rate for the duration of a campaign; instead, it’s based on the number of customers you send to the business.
Why not increase the number of your Podcast sponsorships?
Valid question, and one I get asked often.
I will say once again: your podcast is your show, and therefore, it’s your decision how many sponsors you bring on or have in one single episode.
However, my opinion on this matter is this:
I am a believer in the law of diminishing returns.
In this case, I believe having more than 2 Pre-Roll and Midroll sponsors is bad for everyone involved.
- It’s bad for the sponsor, as their message is getting diminished, less listener action is being taken, and therefore, it is less likely that the sponsor will stay with you when it comes time to talk about an extension.
- It’s bad for the listener, because your listener loves listening to podcasts because they’re free, on demand, and they don’t have to put up with annoying commercials on the radio. Podcast sponsorships work so well because it is YOU, the host, that is promoting the product or service, and your listeners trust you.
That trust will deteriorate if you make it seem more about the sponsorships than the listener. My listeners understand that after 30 seconds of me sharing two 15-second sponsorship slots, we will dive into the content. 30-seconds is not too much to ask, especially when my sponsors are all relevant to entrepreneurs.
- Finally, it’s bad for the host… you! Why? Your goal is to provide valuable, high-quality content that your listeners not only keep coming back for, but that they’ll tell their friends and family about. Your goal is to provide great content, and as a result increase your listener base.
The math is simple: it’s better to have 2 sponsors paying you $430 per episode than 3 paying you $287 for all the reasons above and every other obvious one.
I will never have more than 2 Pre-Rolls and 2 Midrolls on Entrepreneurs On Fire because I care about my listeners, Fire Nation.
And I will only partner with sponsors that I truly believe benefit Fire Nation on their entrepreneurial journey.
Don’t believe me?
Here’s a quick story to prove it:
A few years ago I was approached by a Pay-Day Loan company that offered me double my going rate to sponsor Entrepreneurs on Fire. I do not believe in Pay-Day loans for many reasons – especially as a recommendation for Fire Nation – so my answer was simple: No.
Saying yes would have generated $18k MORE in sponsorship revenue. But iwasn’t even close to worth it… no dollar amount would be.
Show the same care for your audience and you’ll be serving yourself, your sponsor – and most importantly, your listener – better.
When should I bring on sponsors?
My first recommendation to each podcaster who is interested in going the sponsorship route is to sit down a think.
Sit down and think about the LEAST amount of money it would take for you to dilute your podcast with a sponsorship.
Did I just say dilute? Yep… and I meant it.
Dilute is not meant as a dirty word here. It is meant as a reality.
When you bring on a sponsor, no matter how relevant, and no matter how awesome, you are on some level diluting the message of your podcast.
You’re going to turn off some listeners, (although very few if you do it right), you’re going to be sending some listeners away on actions that do not involve your platform, and you’ll be distracting some focus from the main content of your podcast.
Are any of these things bad?
But I bring them up because they should come with a minimum price tag and they have to be aligned with your current goals.
So sit down and come up with that baseline price.
Your listeners are valuable, don’t sell them out as otherwise.
For me, $500 was my baseline number.
I said to myself that if Entrepreneurs On Fire could bring in $500 per episode, that would be $15k per month at 100% capacity… and that made sense.
Anything less – nope, not ready yet.
In April of 2013, I hit that magic number, and my sponsorship revenue has been growing ever since!
So what’s your number?
If you know your number, you will be in a MUCH better position come negotiation time with your sponsors.
How do I find Podcast Sponsorships?
Within Podcasters’ Paradise, I have some great video tutorials on how to find the perfect sponsors, how to email them, and how to lock in the best possible rate for your show.
For purposes of this post, I will share some of those great tips with you now.
What is your niche?
Start by creating a list of companies who make sense given your topic or niche.
What companies currently market to your niche?
Is your Podcast about raising children? If so, then I am sure Babies “R” Us would love to offer value to your audience.
Fishing? L.L. Bean and Cabelas are already lining up!
Also, listen to other podcasts in your niche… Do they have sponsors? If so, a well-crafted email to that sponsor could yield a partnership – it has for me on numerous occasions.
The secret is out!
Podcast hosts have a captive audience. We have engaged listeners. We have followers who know, like, and trust us, and when we put our stamp of approval on a product or service, then that means a lot to our listeners, and sponsors know it!
Think of the podcasts that you listen to regularly. Don’t you feel a closer connection to the hosts than you do to the author of a blog, or some unknown voice on a radio ad?
So create your wish list of sponsors – at least 15 to 20 companies or products and services that you know would be a great fit for your audience.
Once you have that list, it’s time to start approaching those potential sponsors.
How should I approach sponsors?
I have linked to a well-crafted email template to the end of this post that I have used to successfully approach many sponsors. Enjoy!
Also, use common sense: what are the important points that someone would want to know who is deciding whether or not to pay you money to promote their business, product, or service?
Well, they’ll definitely want to know who your audience is – and not just demographics.
They’ll want to know how many people they’ll be getting their message in front of (number of listeners, or at the very least info on how niche or engaged your audience is).
And they’ll probably want to see some type of proof – have you successfully marketing something to your listeners before? Do you have emails from listeners who are so incredibly grateful for the advice and value you share on your podcast?
Again, think about the important points that someone would want to know who is deciding whether or not to pay you money to promote their business, product, or service on your podcast, and craft a meaningful email that shows you’re serious.
I have interested sponsors, now what?
Now it’s time for you to decide what your number is.
As discussed above, you should have a minimum number that makes sense for you and your business based on your current goals.
If your downloads don’t command that minimum right now, then that’s fine!
Let your sponsors know what your download numbers are and what it will cost for them to sponsor an episode. They can take it or leave it, and you will be better off for it whatever decision they make because you stuck to your guns.
At some point, your download numbers may be able to be inserted into the above “Industry Standard” CPM rate and command a higher price than your minimum baseline number.
At that point, it’s time to go back to the negotiation table with your sponsor and start increasing the amount you receive per episode.
Fire Nation, I would like to end this post by saying this…
Building an audience is an incredible way to create a viable business, and podcasting is an incredible way to build an audience.
It’s the model we chose to follow here at Entrepreneurs on Fire, and we’re currently living our dream life while inspiring millions – that was our goal at the start, and we’ve kept that goal in view every step of the way.
Everything I’ve shared here is to help you turn your podcast or business into a viable one, and I hope you’re able to take some of the information provided to create your own freedom – your own dream life.
Haven’t even started a podcast yet? No worries! Make sure to check out my Free Podcast Course to learn how to create and launch YOUR podcast!
Until next time Fire Nation…
Prepare to IGNITE!
Email template of How to approach a sponsor for the first time
EOFire’s Sponsorship page
Email template of Sponsorship Proposal
Example of podcast stats for a sponsorship proposal