How can you measure the ROI of your podcast?
Well, it all depends on your end goal. Businesses and brands start podcasts for different reasons. And those differences affect how they should think about ROI. Broadly speaking, there are two main ways you can measure the ROI of your podcast:
- Financial ROI - The money you make from your podcast.
- Podcast Success - The downloads and engagement your podcast gets.
In this article, we’ll explore how you can measure and track these different ROIs.
Approach 1: Financial ROI
In business, there are two main ways you can make money podcasting. You can build an audience and generate revenue from ads and sponsorships. Or you can use your podcast to generate leads and drive sales of your own product or service.
The latter approach tends to be much more successful. It usually takes years to build an audience large enough to earn significant revenue from advertising. In contrast, businesses can generate leads and sales from a podcast within months.
ROI from Direct Sales
Podcasting can be a highly effective way of selling your own products and services. And it's often the easiest way for businesses to start generating revenue from their show.
A podcast can serve as an accessible entry point for potential customers to begin engaging with a brand. It’s then all about taking the right steps to move them along the buyer's journey - turning listeners into leads, and leads into customers.
The basic process involves using “lead magnets” (free downloadable content) to collect email addresses from listeners. You can then use email marketing to convert those podcast leads into customers.
Once you set up a system that allows you to track the source of sales back to your podcast, measuring the ROI isn’t difficult. All you need is the simple formula below:
(Sales Revenue – Expenses) / Production Time = ROI
Each month total all the sales you’ve made through your podcast lead funnel. Then total all your podcast expenses, which most months will probably just include hosting costs if you aren’t booking a recording studio.
Once you have these two figures, divide total revenue by total production time, and you have the hourly ROI for your podcast.
In a nutshell, all you need to do is create a process that allows you to track sales back to your podcast, while keeping track of the time and expenses it takes to produce the podcast itself.
Keep in mind that small changes in the number of hours you spend producing your podcast can have a dramatic impact on your podcast’s return on investment.
ROI from Ad Revenue
If you are basing the success of your podcast solely off ad and sponsorship revenue, the formula to work out ROI will look pretty much the same:
(Ad Revenue – Expenses) / Production Time = ROI
For example, a business might earn £1000 in ad revenue per episode and spend £50 on hosting costs. If it takes them a total of 5 hours to record and edit a full episode, their ROI equation will look like this:
(£1000 - £50) / 5 hours = £190 per hour
For every hour invested in podcast production, the business collects £190 in ad revenue. Not bad, but these aren’t huge numbers.
You might want to eventually run ads and sponsorships to supplement the revenue you make from direct sales. But it shouldn’t be the primary way you measure success. Business podcasts are generally too niche to bring in lots of money from ads alone.
Approach 2: Podcast Success
If the main goal of your podcast is to increase brand awareness, then things like listener numbers, site traffic, and social engagement matter more than financial return alone.
If you are taking this approach, it’s worth keeping an eye on the metrics below. Growth over time in these areas should justify the time and energy you put into producing your podcast.
Unique Downloads / Number of Listeners
This is always one of the first things that comes to mind when thinking about the success of a podcast. If your end goal is brand awareness, the size of your audience is a key metric.
According to IAB Guidelines, your number of unique downloads is the metric that most closely resembles your actual podcast audience size. Podcast.co’s analytics feature makes it easy to keep track of your unique download numbers across multiple directories.
But even if your business podcast doesn’t attract a huge audience, that doesn’t mean there’s no value in it. Podcasting expert Evo Terra offers a helpful analogy for businesses that reframes the opportunity presented by podcasting:
“It's basically the chance to get on stage and speak to 100 people every week or every other week. Forget about podcasting for a minute. If you knew that every Wednesday at 3pm, you could walk down to the town square and get on stage in front of 100 people, that would be awesome. Most small businesses I know would love to have that opportunity.
“In that situation, you'd work out the best way to talk to those people. You'd find ways to encourage them to interact with your business. And you’d find ways to track whether what you're saying matters to the people that turn up every week.”
As a marketer or business owner, it’s important not to fall into the trap of obsessing over podcast download numbers, especially just after launching. Podcast audiences tend to grow slowly over the course of months and years, not days and weeks.
Increased brand awareness usually correlates with an increase in website traffic. So it’s important to monitor your site analytics in relation to your podcast. Ideally, you should keep tabs on the following metrics:
- Average monthly site traffic and conversions prior to launching your podcast.
- Average monthly site traffic and conversions after launching your podcast.
- Traffic to individual podcast episode pages on your website.
- Traffic to any specific landing page URLs you direct listeners to in episodes.
Social Media Engagement
Social media strategy is now a central component of brand awareness. So if you’re running a podcast, you should be promoting your episodes on platforms like LinkedIn and Instagram. It’s also worth tracking how those posts perform over time. Are you getting more likes and comments as you release new episodes? Do your follower counts go up when you post about your podcast?
Taking time to like and reply to comments on your posts is a great way to drive more engagement. It’s also worth paying close attention to what people are saying, social comments can give you a valuable window into what type of content resonates most with your audience. For more on this, check out our guide to promoting your podcast on social media.
Reviews provide a powerful form of social proof which reflect on the authority and trustworthiness of your business. This in turn can have a strong influence on potential customers when making buying decisions (especially in the B2B space).
Not all podcast directories have their own rating and review system, but some do. Most notably, Apple Podcasts, Stitcher, and TuneIn. So it’s worth doing a weekly check-in on these directories to keep track of how many you have.
Getting more ratings and reviews helps you attract more listeners. They signal to directory algorithms to make your podcast more visible on the platform. So it’s always a good idea to politely ask your listeners to leave ratings and reviews during the outro of each episode.
Measuring the ROI of your podcast depends on what your end goal is. If you simply want your show to generate revenue, then the process is cut and dry.
However, if you want your podcast to help boost awareness of your brand, you’ll need to take a more holistic and inclusive approach to measuring ROI.