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Why Podcast Sponsorship Deals are “Confidential.”

3/9/2006 By Michael

In the last few weeks there have been a number of posts on the podcast discussion boards about sponsorship deals for podcasts, particularly those put together by podcast ad networks. Interestingly, no one wants to state the total compensation involved. (Or for that matter, the average compensation to the podcaster.) It is all “confidential.” Why is that? I know what it costs to run a 30 second ad during the Super Bowl, why is the cost for sponsoring a podcast top secret? The answer is simple; the amounts involved are embarrassingly low. I know they are, if they weren’t people would be “leaking” them non stop. Instead, people are using terms like “fair” and “we are excited a major sponsor is involved”, that is code for underpaid. Unfortunately, most podcasters are not well positioned to demand their worth; they are relying on others to dictate the value of their shows. This means opportunity for the ad aggregation networks at the expense of podcasters. Nothing against the ad networks, I have some smart friends building them and it is dumb to pass an opportunity like that by.

Why is this important to me? I want podcasters to get paid their true worth. In many cases I am convinced that the people doing the deals are underselling the value. The more that people undersell the value – the more the market will come to accept those prices. The debate on the Podcast boards by the so-called “experts” center around CPM and justification for the amounts being asked; $10 – $30 CPM depending on the “expert.” These guys don’t know what they are talking about; they are missing the whole opportunity. Often times they are comparing their prices to the CPM of a mature industry, this is a rookie mistake – these numbers are way too low. Podcasting is an emerging medium; this is the time when the opportunity is most ripe. If you are having a CPM debate with someone you are having the wrong discussion. The discussion you should be having is about unique opportunity and new market penetration. I have been saying this for months now and interestingly the only other person I have heard banging the “forget CPM” drum is Ron Bloom of Podshow. I know people have strong opinions about Podshow, but on this issue I am in total agreement with Ron.

The lesson? Ask for what you are worth, not what is offered.

Filed Under: General, Podcasting Tagged With: podcast, Podcasting

Filed Under: General, Podcasting Tagged With: podcast, Podcasting

About Michael

Michael W. Geoghegan is founder and CEO of GigaVox Media. NewMedia Entrepreneur & Podcast Pioneer/Pundit. Author of two books. Creator of two time James Beard Award winner GrapeRadio.com
My Books on Amazon / GigaVox Media / Grape Radio / Podcast Academy / Reel Reviews Radio

Comments

  1. Chris MacDonald says

    3/13/2006 at 9:07 am

    Michael

    Thanks for the reality check. We have been building our show subscribers and being EXTREMELY careful about our sponsorship relationships. We are lucky to boast some very serious donload numbers at IndiedFeed (happy to provide to the interested), and despite this it’s disheartening to hear how quickly some organizations are closing on below-reasonable rates, but shows and aggregators will continue to make their choices despite the long term implications.

    I honestly believe that if a sponsor finds an association in their best interest they will pay the appropriate prices. This is not idealism but simply a business-based reasoning that some innovative marketers will match with the right content providers. What does this mean in the aggregate? Not sure, but I agree that Googling “podcast CPM” and coming up with a blended average of the results is perhaps the silliest way to establish value between a marketer’s objective and the content provider’s reach. Great discussion….

  2. Michael says

    3/13/2006 at 6:37 pm

    Chris,

    Thanks for the the thoughtful comments.

Trackbacks

  1. Podcast Free America » Podcast Sponsorships Underpaid? says:
    3/10/2006 at 4:31 am

    […] Why Podcast Sponsorship Deals are “Confidential.” at MWGblog Why is that? I know what it costs to run a 30 second ad during the Super Bowl, why is the cost for sponsoring a podcast top secret? The answer is simple; the amounts involved are embarrassingly low. I know they are, if they weren’t people would be “leaking” them non stop. Instead, people are using terms like “fair” and “we are excited a major sponsor is involved”, that is code for underpaid. […]

  2. Paul Colligan’s Profitable Podcasting » Blog Archive » New Meme I Like Even More … Podcasters, Don’t Sell Yourself Short says:
    3/11/2006 at 4:23 pm

    […] I’m sure Michael ruffled some feathers with this post, but, gosh darn it, he’s right. […]

  3. » Podcasters: Ask for What You Are Worth, Not What is Offered says:
    3/13/2006 at 10:59 pm

    […] The title of this post is a quote from a great post by Michael Geoghagen, author of Podcast Solutions and a bright entrepreneur. […]

  4. Podcast Academy - Boston University at MWGblog says:
    5/2/2006 at 2:54 pm

    […] As for the presentations, they were terrific. A lot of smart people were presenting. Best of all, BU did a great job of posting both audio and video of the presentations as well as interviews with the Instructors. Rather then forcing hundreds of MBs on you via RSS, I will link to the page where you can download the presentations individually. I did one each day; on Friday I covered “Making Money” and on Saturday I covered podcasting “Inside The Corporation”. Most readers here will probably be more interested in the first presentation, where we covered Reel Reviews, Grape Radio, French Maid TV, The Disneyland Podcast and Right Look Radio. Basically I highlighted a number of approaches to monetization. I also spent some time explaining and expanding on my earlier thoughts regarding podcast ad aggregations networks and CPM models. You can find the podcasts and videos here: Podcast Academy – Boston University. […]

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About

Michael W. Geoghegan is founder and CEO of GigaVox Media.

As a pioneer of podcasting, Michael created some of the first corporate podcasts, including efforts by Disney. Michael is also creator of the 2008 & 2011 James Beard Award winning "GrapeRadio" and "Reel Reviews: Films Worth Watching."

He is editor-in-chief of the Podcast Academy™ book series and co-author of Podcast Solutions: The Complete Guide to Podcasting.

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