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.
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….
Chris,
Thanks for the the thoughtful comments.