Podcast Alchemy: Who is Helping Whom? Podcast Hosts, Guests, & Audiences

There are multiple models used by podcasters to make money, not all of which are obvious to the guests and audience. It’s not as simple, or even as linear, as people expect.

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When a new movie or TV show comes out, the celebrities do the talk show circuit. It’s a time-honored tradition. The movie gets publicity, and the show gets content, which draws an audience allowing them to get advertising dollars. Podcasts hosts are not talk show hosts; authors (and business owners) aren’t celebrities, but the idea is the same. But who is really helping whom?

We’re going to look at the business models behind informational podcasts with guests such as business, finance, parenting, relationships, self-improvement, and similar educational themes. This does not necessarily apply to news, current events, true crime, or other podcasts which it’s more about just attracting eyeballs (eardrums?) and selling ads or sponsorship. It also doesn’t apply to hobby podcasts. I didn’t create Brain Bump to make money, but to make an impact. Some people do podcasts just for fun, and money has nothing to do with it; there are also internal corporate podcasts used as a form of audio newsletter. Those are also not covered here.

The main takeaway, if you’ll forgive me spoiling the punchline, is that there’s no magic road to riches. None of the models will suddenly make you rich. They all work, but they all work slowly. It’s a marathon not a sprint, no matter how you approach it.

Model 1: Podcasters Want to Sell to Their Audience

The Idea

Podcasters are building an audience for a reason and often that reason is to make money. This can be done in a variety of ways.

Most directly is through advertising. The more eyeballs and eardrums the more money the podcast can charge for an ad. Broadcast TV and radio weren’t putting on shows out of kindness, but to sell ads. Print media runs articles to sell ad space next to it. This is the same model.

Sponsorship the same idea in different packaging. Instead of paying for an ad, the show is brought to you by the sponsor. Uncle Miltie’s show began with a reminder of who was putting on the show (and there are far older examples from radio).

Another variant is referral links. These might be links in the show notes or an audio promotion, typically with a code so that the listener gets a discount, and the advertiser then knows the source of the code from that code. In this case instead of paying CPM (cost per mille), the advertiser is paying CPA (cost per action or cost per acquisition).

The “advertiser” could be the host himself. For example, an executive coach offering leadership advice on each episode is signally that he’s a source of leadership knowledge. He may explicitly mention his products and services during the show or just have them implied.

One final variation is patronage. The rock band Ok Go astutely wrote in the Wall Street Journal (The New Rock-Star Paradigm) that album sales are a historical anomaly. Throughout most of human history music was funded through patronage. The same is true for other types of art (thank you Medici family). That some people were able to make some money selling records (or downloads) or similar types of sales was just a quirk of the twentieth century.

In all of these cases, the guests are there to help provide content to get the listeners. Content brings eardrums which brings revenue.

There are some niche exceptions. For example, I used to be an executive at a travel media company; we would get unsolicited travel products sent our way in the hope of a review for free publicity. The top bloggers who write about mattresses literally get mattresses sent to them weekly (which some of them resell, after testing out for a few days, for significant money). If you have a large following in some niche area like board games or acrylic nails, you may find free products coming your way. Still, those products probably aren’t going to replace the income from your day job.

The Reality

A podcaster making money by selling ads is like an author making money by selling books. A very few do, but most don't (we’ll provide some numbers in Podcast Alchemy: 10.  Is Podcasting Worth It? (As a Guest or Host)). It’s very unlikely this will ever be your full-time job, funded by episode ad revenue (in most of the forms listed above). Only the largest of podcasts will truly be profitable. (Wrote the man who builds tech startups, an industry with a massive failure rate—although I can usually draw a paycheck even if the stock options themselves become worthless.)

From what I’ve seen, the most effective use is to have a product or service being sold and the podcast is seen as part of the marketing spend. This is almost always the product or service of the host (or at least the producer, as opposed to a third-party product or service).

To understand why you need to know a little bit about sales psychology. Selling an item for tens of dollars can be done with a single engagement, it’s why infomercials work. You might buy a book or toaster oven based on a couple minutes of hearing about why it's great. What you're not going to buy is a high-priced product or service. No one buys a $5,000 executive coaching package after five minutes or hires a company for a $20,000 project off a single episode or encounter.

Going back to the lessons of Ok Go, throughout most of the twentieth century bands didn’t make much money from radio plays of their songs. Even selling albums typically didn’t get them significant money (usually the studios got the lion's share of it). But the radio plays and albums drove the concert sales, and that’s where bands made their money.

The podcast hosts know this, and their goal is to build a relationship with you, the audience, over time. You tune in each week to get free marketing tips, so then when it’s time to hire a marketing agency you think, “Well, Charlie’s always given me good advice for the past year” and you’re already comfortable with Charlie from listening to the show each week. Charlie was priming you for the sale with each episode. (In the alternative version of affiliate marketing, links from the show promote a third-party product or service which kicks back an affiliate fee to the show; even then it’s building an audience and instilling trust to lead to the sales elsewhere that drive revenue back to Charlie.)

But again, very few shows generate enough money from ad sales (in any form) to make them profitable. Some will make enough to cover the cost of production (including overhead). A few might put some dollars in the pocket of the host. Very few will replace the day job.

It makes the most sense where this is just one component of a larger marketing effort including online ads, partnerships, and other promotions. Recall how you can get more bang for your buck from a podcast episode using the ideas in Podcast Alchemy: 8. How to Get the Most Out of Your Podcast; the volume of content created ties into part of a larger marketing strategy. For many, it’s just easier if it's their own products and services and this just fits in as one of those components.

Model 2: Guests Want to Sell to the Host’s Audience

The Idea

Like celebrities promoting their movies, authors and business owners promote their products and services. As noted in Podcast Alchemy: 3. The Philosophy of Guesting the episode shouldn’t simply be an ad pitch. Most hosts and guests know this and provide entertainment and/or information to the audience. At the end of the show is a pitch, explicit or implicit, and in the show notes are the links to the guest’s product and service.

The Reality

The Oprah effect is real, but the hosts aren’t Oprah (and the guests aren’t A-list Hollywood celebrities). Being on the right show isn’t going to magically get you readers or customers.

As noted prior, if you’re selling a product or service, e.g., executive coaching, no one is going to spend thousands of dollars or more just because they heard you once on a podcast episode. That episode simply made them aware of you, but it’s not going to close a high-ticket sale, which takes multiple experiences with you or your brand.

Sure, you’ll get some new people to enter the top of the funnel. For podcasts with hundreds, even thousands of downloads per episode, you’ll probably get single digit sales of your book or $49.95 product, or a subscription to your freemium or low-cost service. You can maybe get double digit email sign-ups or followers on social media. Unless you’re on one of the very top podcasts, don’t expect much of a bump. Even then, we’re talking double digits of people entering the top of your sales funnel. (We’ll explore this more in Podcast Alchemy: 10.  Is Podcasting Worth It? (As a Guest or Host)).

Remember, on many podcasts there’s someone like you vying for the attention, and the dollars, of the listeners every week. There’s always a new book, product, or service that is equally relevant to the audience to help them get more customers, be more fit, have a better relationship with their spouse, or whatever it is you can help them do. If you have something really innovative that is very timely you might get lucky, but don’t count on it. They know there will be another product or service on next week’s episode; there’s another bus coming.

See guesting primarily as part of the marketing marathon. This is more PR and brand building than direct sales. You may get lucky. I’ve had people hear me on podcasts and it led to high value speaking engagements, but I see that more as a lottery ticket than a key part of my sales model.

Disclaimer: I don’t really sell much. I sell a book which is a low price point item (meaning it gets sold with a single touchpoint). I also do some high-cost speaking engagements. For those speaking engagements I do get from podcasting, they likely heard me on one show, and then checked me out on other shows as well as my other online content before they reached out. I give away everything else for free (career resources, career articles, media articles, and Brain Bump). Most people would have mid price point (e.g., $100-500 program, class, or service) and high-price point (e.g., $500-$10,000) service so they could move people along from free (email list, social media), to low price point (book, low-cost membership), to mid price point (training, premium membership), to high price point (coaching, mastermind, consulting).

If you have an especially good conversation rate, then the math may work out that this becomes highly profitable. I know a few people for whom it works. I know quite a few more who claim it works, but I suspect there’s some exaggeration of success as is all too common in the writing / speaking / coaching industries. I know many, many more for whom they want it to work, but they’re not there yet, and I suspect many will never be.

Model 3: Podcasters Want the Guest’s Audience

The Idea

Every podcaster wants to know what the guest can do to promote the episode. As noted in Podcast Alchemy: 6. How to Be a Great Podcast Guest, a good guest should share the episode on social media and email lists at the very least. The guest helps broaden the reach of the podcaster by bringing in new audience members.

The Reality

Shows love having big name stars. Bigger names, or hard to get people are worth more. They bring in more audience and also provide more credibility.

Steven Colbert has most guests in his studio, but when Barbra Streisand’s book came out, he flew out to her home to do the interview. He’s also traveled to interview presidents, and Steven Spielberg & John Williams. Those are all people who don’t normally do late-night talk shows. Yes, Colbert is at the top of his profession, and may not need the bragging rights from these guests, but those big names can bring in viewers who the producers hope will stick around to become regular audience members.

But a celebrity doesn’t just hit one late-night talk show (maybe a former president will stick to one, but the rest do a tour). Rather, that celebrity will be on as many as possible, including daytime talk shows, nighttime talk shows, radio, newspaper, etc.

As a podcast host you may find a guest not actively promoting themselves and you’ll be their one show, or one of a handful that year. The reality is most successful, accomplished people usually don’t go on shows for the heck of it. They’re busy being successful and go on shows to serve their needs (even if it's to sell an idea, rather than something commercial). Any business owner who knows anything about marketing knows that going on only a handful of shows statistically isn’t likely to move the needle. The people who are the highest value typically are doing a press tour (albeit a virtual one). This means doing multiple appearances a month or doing a few scores of appearances around a specific event like a book launch.

Around the time I started guesting Matthew McConaughey had a book coming out so I would see him on prior episodes of podcasts I was pitching. He has a much bigger name than I do (I’m guessing you knew his name before reading this article, but not mine) but decided podcasting was part of the promotional strategy for this book. I’m sure he sold more books per episode than I did. Even so, he went on many shows. (79 at the time of this article according to Podchaser. Even accounting for some being long before or after the book tour, I’m sure dozens of those episodes, if not scores, were specifically for the book.)

Most people have “one story.” When the celebrity goes on the talk show she’s talking about the current movie. Sure, she’ll tell some anecdote that may be different from show to show, but half the discussion will likely be about the current movie (and usually the same clip is played) and the talking points her PR team wants used. The author will have the “one story” about the current book or service being promoted. I’ve got about 15 different angles for my book, but still, many podcasts tread on similar topics (e.g., “How did you come up with the book?” “What goes into a career plan?” “What free giveaway do you have for our audience?”) even with different themes.

Realistically, even dedicated fans of the guest (and even with some variants on the show angles) may listen to a few episodes but then will say, “I’ve already heard this.” Consider how many people do you know who actively say, “I know I saw this celebrity on The Late Show last week, but now he’s on The Tonight Show so I want to watch him again.” And even if they do, how many will then say, “oh, I’m now going to start watching the Tonight Show regularly.”

Authors and small business owners are usually good at promoting your show. They likely have an email list and social media and love to post, “look at how great I am,” especially when it’s less, “look at me” and more, “look at this thing that’s not mine but shows you that someone else thinks I’m great.” But that’s the extent of it; they’ll bring their horses (audience) to the water (your show), but they can’t make them drink (listen to the show, let alone become a subscriber).

One podcaster, upon hearing that I had been on over three hundred episodes, commented that he wouldn’t want me on because my audience would not likely become his subscribers, as they’ve already seen me on many other shows.

He’s absolutely right; and to be fair my social media at that point has been a lot of, “look at me on yet another podcast” which gets very repetitive. When it comes to getting your audience to listen to your new podcasts, Dave Jackson of the School of Podcasting notes, “They will if you do an interview that wasn't the same interview as the last five they just did.” Again, this is true for all good guests. The more serious guests likely aren’t just doing a one and done podcast; they’re actively getting their message out and going on multiple shows.

The point is you as a host are not going to pick up most of their audience. If someone has 10,000 followers (not quite celebrity / influencer status, but a decent following), and promotes an episode, what percentage do you think will listen? Of those, what percentage will convert and start regularly listening to the host’s podcast? Again, we’re talking double digits if that. And that’s listeners, if you’re trying to convert (as opposed to selling ear drums), then those handful need to filter through your sales funnel.

Just like in model 1, it’s drips and drops which build over time. But it’s a marathon, not a sprint.

Model 4: Podcasters Want the Guest as a Client

The Idea

I’ve worked in and out of the lead generation business for years. Most people understand the “free giveaway” isn’t really free, it’s about getting you to sign up for an email list. (For the record: I give away career resources on my book’s website for free-–I don’t even ask for an email-–since I would rather more people have these tools to help them, and because I have nothing else to sell them. Likewise, not only is Brain Bump free, but you can use it without ever needing to create an account or provide any information.) But the audience isn’t the only possible target.

Some podcasters see the guest as a potential client. It’s easy to spot this type of podcast once you know what to look for. Look at who the host of the podcast is; who are the customers of the host? Typically, the host has a product or service for a business. Now look at the guests; are many of the guests, or their companies, potential customers of the host? If so, the host might be employing lead generation directed not at the audience, but at the guests.

The Reality

This is actually a good technique for the host. First, it’s relatively new, so guests aren’t yet on guard about it (as opposed to people giving their email to a website for something free where they know what’s coming). Second, selling something other than an impulse buy requires multiple touchpoints with the customer and that’s what this process naturally creates.

The typical process works as follows. The host will look for guests. Often, it’s very specific because they’ll give an industry, title, and/or company size. For example, “We’re looking for executives at manufacturing companies making at least $20M in revenue."

Once a guest fills out the form and is approved, there will be a pre-interview meeting. There may be another email with a shared document outlining the show, possibly reviewing questions. As the show approaches the podcast host will send a series of (automated) emails to the guest with tips. Remember that these guests, unlike the people doing the podcast media tours, aren’t normally on podcasts; they might be inexperienced or even nervous. The host will send tips about lighting, sound, etc. to the guest. I’ve often seen this done as brief video clips, so the guest sees and hears the host. The show itself will have a green room with brief conversation between the host and guest before and/or after the recording. Then there’s typically a follow-up meeting to debrief about the episode (and probably a few more emails).

At this point the guest has now had multiple conversations with the host. The video advice emails work as a proxy to a conversation and gets you comfortable with the host, building familiarity. (“Wow,” thinks the guest, “this host is so helpful and friendly; I’m feeling warm all over!”) Quite a few have them holding up a sign or whiteboard with your name on it to make it feel like this video was made just for you. (In fact, it’s all done with software that just overlays your name into the stock video.)

The final debrief meeting will typically have some level of sales pitch. Some may do a harder sell, “tell me about your work and how my company can help you.” Many just pitch their offer to plant the seed. You’ve been primed to like them, now they remind you of their service hoping that at some time in the future you’ll remember them and will come calling (or will refer others to them in the future as you’re likely to know peers at other companies).

This will likely become more common in the coming years as more firms provide this service and the cost of doing it comes down. Some podcasts source guests directly, others use third party services to do the outreach (including being on the podcast matching services mentioned in Podcast Alchemy: 5. How to Get on Hundreds of Podcasts (or Find an Ideal Podcast Guest)).

I’m not criticizing this model. It’s a very clever form of lead generation. If you think about landing one $50,000 contract, or even a few $5,000 contracts, the podcast pays for itself pretty quickly.

In a variant, some podcasts sell the podcast itself as a marketing package. It’s free to be on the show, but they upsell an episode marketing package or episode promotion. In some cases, the guest can buy the content (the episode itself or clips from it) from the host, for a fee. On other podcasts you can pay to “jump the line.” (In these cases, it may be the primary revenue source, or it may just be to help offset costs.)

Who Pays?

Beyond the models above there’s an interesting question of who should be paying whom? In some variants, it’s pay-to-play to be on the show; the guest must pay the host. In this case the podcast is more like late-night infomercials where the guest is paying for the airtime. Sadly, quite a few big podcasts follow this model, where guests pay thousands of dollars to be on the show, but it’s never disclosed to the audience. You can spot this by looking at the guest intake form for the show and seeing if there’s a fee. To be fair, my sources tell me shows like Good Morning America have also moved to a pay to play model and many of the featured products you see are now there because they paid to be. (That’s not to say for either podcasts or Good Morning America that they’ll take anyone whose check clears, just that even after you qualify as relevant, you have to pay, so it’s not the quality of your message alone that gets you on.)

For the record: I have never paid a host or third-party service to be on any show. I don’t recommend you ever do either. If you as a guest have good content, there are plenty of good podcasts that are happy to have you on at no cost.

Others, even if they don’t charge, have the attitude, “This is my platform and you’re lucky I let you get in front of my audience.” Certainly, the host has built up an audience and that can take years of hard work and money. Guests should be appreciative of being on the show. I appreciate being on a show whether it has tens of downloads per episode or tens of thousands.

But it's not a one-way street. Talk show hosts and writers don’t want to have to create an hour's worth of content for every show. They fill the time with guests. Guests still require some work (e.g., sourcing, research), but it makes the show more dynamic than the host speaking for 30-60 minutes straight each episode. Obviously, if the host doesn’t want guests they can do solo shows.

While I may be dubious of shows that make guests pay, it's important to note that this is not unique to podcasting. Professional speaking, an industry that’s first cousin to podcasting and its sibling book publishing, has the similar reversible flow of money. Higher end speakers are paid to show up and speak. This includes celebrities, retired (and sadly current) politicians, CEO, academics, and other experts. (I’m in this category in that I charge the event to have me come speak, unless it’s either a non-profit or a favor for a friend of mine in which case I’ll do it at a much lower price.) Many beginning speakers will even speak for free to gain experience and exposure. But then there are events that charge speakers to come speak. This fee could be hundreds or even thousands of dollars. The thinking (which I’m not saying is correct) is that the audience is so valuable that as a speaker you gain exposure to them, and they will then buy your products or services making this a cost-effective marketing tool.

It can be, but having seen this movie before, I suspect most of the time it is not. If you’ve ever heard someone say, “we can’t pay you, we’ll but give you great exposure” you’ve probably learned to be cautious. This is that model, but with the additional cost of an apple to whitewash the fence. [For those unfamiliar with this reference, that passage is from the book Tom Sawyer; written in 1876; the language and behaviors reflect that of the time.]

Likewise, traditional publishers pay you an advance for your book and cover publishing costs. Vanity presses, on the other hand, make you pay, with the promise that you’ll be a respected, successful author. Most never see the promise fulfilled and it's the vanity press who gets successful.

You’ve seen this revenue flow flexibility before. TV channels buy TV shows and make money off the ads; if you have a TV show, a TV station will pay you . . . unless it’s a late-night infomercial in which case you, the TV show producer, pay the TV channel for airtime. Bookstores buy books from publishers so they can be resold to the public for a profit . . . unless it’s Hudson News (the ones you see in every airport in the US) in which case the publisher pays the bookstore (thousands of dollars a month) to carry the book, hoping that will increase sales. Supermarkets buy products from manufacturers and sell them to the public for a profit . . . but if you want good shelf-placement (or an endcap display) then the manufacturer then also pays the supermarket.

Everyone Wants Content

As noted in prior articles, both parties can benefit from the content being repurposed in other ways. The most direct revenue means for hosts is to turn the show into a book; indirectly it becomes marketing fodder. For guests the content is less commercializable, although personally, I find the questions I get help inspire blog posts. (See Podcast Alchemy: 8. How to Get the Most Out of Your Podcast for ideas on how to extend the usability and value of your content.)

All of the above models are valid and I’m not arguing for any one over another (although I wish companies that charge a fee for a guest would disclose that to the audience). As a host, it’s important to understand what model is right for you. As a guest, understand what the host is trying to achieve, and when you’re on the show help them achieve it. (In the fourth model, I’m upfront when I get the pitch saying, “I’ll come on your show, but I want to be upfront that I’m not looking to hire your service anytime in the foreseeable future.”)

We often think industries have a simple buyer-seller relationship with a well-defined flow of cash. It turns out, the world, especially the media world including podcasting, publishing, and speaking, is far more complicated. Podcast hosts, guests, and audiences should all understand what product they are getting.