Holloway Editione1.1.1
Updated September 14, 2022You’re reading an excerpt of Stop Asking Questions, by Andrew Warner, a veteran podcast host of 2000+ episodes. The book explains how to lead high-impact interviews and learn anything from anyone. Master the craft of interviewing with this complete digital package. Purchase now for lifetime access to the book and extensive audio and video resources.
It took me a year of publishing three episodes a week to finally feel “ready” to sell ads on Mixergy. The truth is, I had no idea what I was doing. But step-by-step, I built a sponsorship revenue stream that took my little podcast from a hobby to a full-time business with multiple employees.
Some podcasts will be ready to sell ads faster than I was. Some slower. No matter what, your podcast sponsorship journey will go through three stages: startup, growth, and maturity.
The startup phase began a year after I started interviewing and felt ready to look for my first sponsor. At the time, I didn’t know what to charge. I didn’t even know how many people listened to my podcast because the publishing software I used didn’t keep track of listenership.
The startup stage of sponsorship sales is full of unknowns for both creator and sponsor. That’s why you should start with learning, not selling. Then, when you start selling, prioritize getting data from sponsors over making money from them. And, to eliminate the uncertainty for them, guarantee results.
I first needed to answer a simple question: How much could I charge? There’s no ad platform for podcasts that will automatically tell you the value of your show. I had to find someone with some experience who would be friendly enough to help me. Scouring online message boards, I met Sunir Shah, an ads buyer from FreshBooks. At the time, FreshBooks bought a lot of advertising on podcasts similar to mine, so I asked Sunir if he’d help me understand ad sales. I sent him a link to all the interviews I had recorded to show I was serious. He and the FreshBooks team gave me invaluable advice. They taught me how they bought ads, which sites performed well for them, and what great ads looked like.
New content creators and publishers are intimidated by ad buyers. I’ve found it helps to remember that it’s an ad buyers’ job to find new, productive places to advertise. They want to work with us.
After talking to FreshBooks, I realized my interview podcast could get them customers, so I pitched them. I suggested a low price of $750. At that rate, they told me they needed 40 new customers to try their invoicing software. That information was more important to me than getting paid. If my ads generated only 20 users, I would know to charge $375 in the future. If they generated 80, I’d charge future sponsors $1,500. In the ad startup stage, it’s hard to know what your ads are worth without data from your sponsors.
FreshBooks was hesitant at first, even at that low price. I understood. They tried ads with other new publishers, and some didn’t work. Mine could be duds too. So I guaranteed my results. If I didn’t get them the number of customers they needed, they wouldn’t have to pay. I was fine giving a refund. The important thing to me was knowing the effectiveness of my ads.
I was so eager for numbers that I came up with a way to double-check their work. When I recorded the FreshBooks ads, I told my audience that if they signed up, they should send me a test invoice. Since my audience loves inside information about business, I said that if they invoiced me, I’d hit reply and tell them how much FreshBooks paid for the ads. The invoices started hitting my inbox immediately after I published their first ad.
Within days of the first ad run, FreshBooks told me they hit 38 users and that they expected more to trickle in. My ads really were worth $750. I started selling ad space to other sponsors at that price. I explained that FreshBooks tested them, and they worked. Once you get one well-known customer, it’s easier to get others to at least test you. By asking sponsors for metrics on the ad’s performance, I could gauge the best time to increase my rates.
The startup stage was defined by selling single-episode ads to individual sponsors. My goal during that stage was to acquire data, not make money. With data in hand, I felt confident to move to the next stage of ad sales: revenue growth.
I hired Sachit Gupta, a business development consultant, who helped me realize that my reputation was strong enough for companies to invest in long-term relationships with my audience. Before I started working with Sachit, my sponsors were companies with relatively low-cost products. They needed to acquire a lot of new customers to make the ads worthwhile.
To increase my ad rates, Sachit suggested going after businesses with high customer lifetime values (LTV). That meant they only needed a few new customers to be profitable, and they’d be willing to spend more to acquire them.
A good example of a high LTV sponsor is Toptal, which helps businesses hire top developers and other professionals. Though prices start low, it’s not uncommon for a Toptal client to spend tens of thousands of dollars per year on developers. Customers don’t make that kind of decision after just one ad. It took time and repeated exposure to Toptal ads. Sachit realized that based on my reputation, Toptal would be willing to invest in a long relationship and multiple ads.
He was right. His insight took our sponsorship revenue from under $50K annually to over $200K within a year. He doubled it the following year and kept growing it by working with sponsors that earned more from their customers by establishing longer relationships with them.
The maturity stage of the ads journey can be traced back to a little link that’s been on my site for over a decade. It simply says “Sponsor.” It links to a form where businesses that want to sponsor my interviews can tell my team about themselves and schedule a call to talk about buying ads.
Today, every single show sponsor uses that link to start their relationship with me. Ad buyers find it because of the reputation my site built over the years. Each interview I publish draws in new listeners. Some of those happen to be ad buyers who want to buy podcast ads. Each link to my site adds to my reputation with Google, which helps me show up higher in search results done by ad buyers. Each new article written about my work is another potential source of sponsors.
My job isn’t to hunt for new sponsors anymore. It’s to talk to each potential sponsor and make sure that what they have to offer would be a good fit for my audience.
I’m surprised by how many interviewers will pitch socks, mattresses, and other random goods for their sponsors but never sell their own products to their audiences.
You might be OK forgoing the revenue, but by not selling your own products, you’re missing an even bigger opportunity: to understand your customers and make their lives better in ways that only you are qualified to do.