Investors need a new ROI perspective for investing in podcasts
As I pitch different Studio Jijiji 'Theater of the Mind' projects (i.e. podcasts) the one question that keeps coming up is about ROI. People don't believe podcasts have an ROI. I prefer to see it as it's not evident to them. I'm used to this kind of wall because I've spent my whole career innovating. There's a penalty for being first. And a reward.
Calculating the return on investment (ROI) for podcasts is like herding cats through a maze on a moonless night. What we need is new perspectives on evaluating podcast performance.
Metrics
1. Awareness:
Podcasts build awareness. Awareness builds an audience. Audience creates loyal listeners. Loyal listers engage.
Awareness is gauged by listener numbers versus production costs.
Calculate:
- Downloads/Unique Listeners: The formula: (# of downloads or unique listeners/ production costs), measures how widely your podcast reaches.
Example: 1000 downloads divided by $100 CoP = ROI $10
If your total Cost of Production is $35,000 and your goal is to deliver a 10% ROI you would need to generate 3500 downloads.
This gives a working number to judge ROI. It's a start.
- Social Media/Websites: Evaluate the impact on digital platforms by measuring interactions specific to the podcast, using the formula (# of impressions or website visits/production costs).
Example: 1000 visits divided by 100 visitors + an ROI value of 10.
These two examples give you a working metric to judge your podcast's impact on awareness. If you're seeking brand investment, you can show a brand an awareness curve.
Brands often invest in 'awareness' marketing, and it can be useful when seeking funding to be prepared to discuss your goals and how your goals enhance a podcast's ROI.
2. Sales Metrics:
Tracking sales from podcasts is complex, but successfully monitoring sales and leads generated offers a clear financial perspective of your podcast’s impact.
The ROI here can be calculated by:
- Revenue from Conversions: The amount earned from podcast-driven conversions divided by production costs.
- Leads Generated: Number of leads from the podcast versus the cost, providing a cost-per-lead insight.
3. Paid Advertising Metrics:
Paid campaigns can amplify reach, targeting podcast listeners specifically. The ROI for paid ads is calculated by dividing campaign results (subscribers, leads, etc.) by the production costs.
4. Engagement Metrics:
Engagement can be an indicator of content resonance, measured through consumption rates or social interactions:
- Consumption Rates: Calculate the total minutes consumed (average consumption rate multiplied by listeners) and compare against production costs.
- Social and Web Engagement: Interaction on these platforms can also reflect listener engagement, quantified similarly through ROI calculations.
The key to a healthy ROI is your production costs. Studio Jijiji innovates every aspect of our production to deliver high-quality results within reasonable budgets. By showing investors how we work, we are also showing them how we are focused on our ROI metrics.
Brand Benefits
- Awareness: Podcasts increase brand recognition significantly. They foster thought leadership and can align closely with a brand’s mission.
- Engagement: High engagement levels not only maintain audience interest but also guide content strategy through direct feedback. Which leads to:
- Sales: Podcasts humanize brands, enhancing customer relationships and ultimately boosting sales, as authenticity ranks highly with consumers.
Podcasting is a long-term strategy. It is one-on-one marketing, the most potent marketing possible. Podcasts deeply engage audiences. Podcasts are a valuable medium for brand building.
When it comes to ROI, the measurements should be adaptable and flexible, reflecting the varied objectives and benefits each podcast aims to achieve.
Podcast power is a critical arrow to have in your contemporary marketing quiver.
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