How Podcasting Can Unlock Lucrative Monetization Models

0:00All right. So we want to talk about how podcasting can produce lucrative monetization models. and I actually got this idea yesterday as I was flying back from Turkey en route to Miami and I was listening to a podcast and this one guy was just talking about the different monetization models and first of all for this podcast, the way we want to start this one is talk about the typical monetization models that you might know about and then we want to talk about different ideas that you can pursue if you want to start a podcast. So Neil, you want to go first or you want me to go? Go for it. It was your idea based on your flight, so go for it.

0:36All right. So obviously the most common monetization models for podcasts are ads. So for example, on this podcast, we have DreamHost and we've tested with Shopify. We're now going to test with Athletic Greens. So Neil, I'm actually going to have to send you a package of Athletic Greens. So you're going to have to try it yourself. And the point is that's a very common way of monetizing. But you can also, what else is common? You can promote your own products. You can promote your own services. And at some point when we do our longer reaction videos, Neil, I actually didn't tell you this, but I'm going to have you record a 30-second video promoting your products or your services.

1:09So it could be MP Digital. And I might record a 30-second ad promoting my stuff. That way, we can put them into longer episodes. So you can promote your own products and services. I tend to believe that that's more lucrative because you have better margins and you have more control most of the time over your products and your services. So I think that's another layer that you can go down. Those are common ways of doing it. And here's another common way before we flip over into more lucrative ways. You can also... We tried this in the past. It didn't work well for us, if I'm being honest, but selling subscriptions for the podcast.

1:39So$5 a month,$10 a month or whatever, and you can get premium content. I tend to believe that we've talked about this before, but if you're going to do content, you should give the vast majority of it away for free because you're just trying to build reach at the end of the day. You're trying to build relationships at scale. And when you do these premium podcasts, you're actually withdrawing from the relationship bank account where you should probably just be continuing to deposit. and then go for a bigger ask at the end. So Neil, you have any thoughts on lucrative models, or I can go again. So conferences, we once did a conference at marketing school.

2:14Eric picked up some clients from that as well. That was another way to monetize. I look at podcasting a little bit differently, in which I personally don't think monetizing podcasts is the right approach. Eric and I may differ on this one a little bit. If it was up to me, I wouldn't care to monetize one single media channel, whether it's podcasting, blogging, social media, or any of them. I think the better approach is you find a much bigger TAM and a much bigger product or service and you promote that. Not someone else's, just your own. I think that's the best way to make money from any media channel.

2:59TAM is total addressable market. So for example, AI is a TAM. How much will businesses spend on AI? Design is another TAM. People spend money on tools like Canva, Adobe, right? Marketing ads is, or advertising is another TAM. It's a massive one. Look at Google, look at the television networks, look at Facebook. Marketing services is another TAM. EXWPP, an ad agency like Omnicom as well, or Eric Singlegrain, or mine, NP Digital. But the point is, the bigger the market, the easier it is to make money because it's really hard to gather 50 % of a$1 million market. market. But on the flip side, if you're in a$100 billion market, it's much easier to conquer and penetrate maybe 0.1%.

3:50And you'll make way more money than if you go after a million dollar market and you try to, you know, dominate 50 % of it. It's really hard to be the leader in any market. But what's easier is to go after a really big market and just take a really, really, really small fraction. And that's been my business model. I think it's worked out really well. Eric has somewhat of a similar model, but we just try to keep giving away more and more stuff for free. And we try to monetize from on our end, we have SMB accounts or clients as well as fortune 1000. But we really make our money from fortune 1000 or global 1000, whatever you want to calling it, like I'm in Brazil right now.

4:34So instead of worrying about how much am I going to get paid to speak at a conference, which I can charge your arm and a leg. We still get a lot of companies hitting me up saying, Hey, Neil, we'll give you 50 grand to talk. Don't really care about that. I want the right audience. You know, we just got hit up by a company who's valued over a billion dollars. They raised a few hundred million. They're like, we have offices all over the world. I think they have over 20 offices. Like we want Neil to go and talk to each one of our offices and bring in our partners. It doesn't matter if that contract, and I'm saying, I'm not saying they'll pay me this, but let's say if they'll pay me a million bucks, I'm not saying that's worth it or it's not worth it.

5:10Honestly, I wouldn't do it for a million dollars, but the main reason being is in their offices, if they bring their partners, their partners, none of them, we've already looked at it, or majority or 99 % of them won't be ideal customers. I'm better off speaking for free at conferences and getting set up with meetings with like companies like Procter and Gamble and Nestle and Michelin and Whirlpool and the list goes on and on because one of those contracts could be a multi-million dollar contract and I would make more money from that in the long run than just focusing on speaking for money and monetizing quote-unquote media or brand value in smaller ways and that's why I'm a big believer in which just give away everything for free and just go after a massive TAM and focus on that and nothing else.

6:01If I were to thread this all together, what we're really talking about at the end of the day is you can take the short-term money, which could be ads, or you can go for the long-term, which usually has bigger money. And so if you wait, if you delay gratification, build out a product, you build out a service, and it's a high ticket type of thing, it could be high LTVs, high average order values, then you're going to do better if you're able to delay gratification. Here's another example what we'll leave you with in terms of a lucrative monetization model for podcasts. The example that I got when I was listing on the flight back was, Neil, have you heard this company called Tegus?

6:37Tegus? No. Yeah. T-E-G-U-S. So what Tegus does is imagine when you can pay for data on how much software is or how a certain company is doing and all that. But this Tegus company is probably doing 60, 70, 80 million dollars a year right now. And in the very beginning, they were advertising on this podcast, one of these investor podcasts, and they actually got most of their customers from this investor podcast. I believe the podcast is called Invest Like the Best from Patrick O'Shaughnessy. Funny enough, I'm actually going to his conference capital camp in a couple of weeks. That's a separate thing.

7:09But key thing here is he saw that this business that was very research heavy, that was really targeted towards high net worth individuals, more so investors, and they would pay$10 ,000 to$20 ,000 a year for these TIGAS contracts. Well, he's like, you know what? The ad stuff is great, but I want a piece of your company. And so I believe that if you have a significant podcast, and it doesn't even need to be that big, but if you have strong mindshare for a really high net worth audience, then you can actually take some equity inside of the company if you believe it's doing really well. And so you can do, instead of saying, hey, I'm going to run ads, say I'm going to take some equity in your company.

7:45By the way, if you've got a really cool company and it's growing really quickly, send Neil and I your numbers. Maybe we'll do some ads for equity. Yeah, that's what we'll call it. AFE, ads for equity. You heard it here first. So that is it for today. Please don't forget to rate, review, and subscribe, and we'll see you later.