How Much does your Podcast Cost your Business and Tax Payers?
As more podcasts are popping up, so are expenses, time management issues and an overall focus of an organization's bottom line.
Does America have a podcast problem? Many veteran media professionals are becoming increasingly concerned at the amount of public private money being given to companies, state agencies and public private partnerships who have started podcasts in the past several years.
Does anyone remember the blog revolution’s failure? How about the end result from the blog investments made 10-20 years ago?
The quick answer is that more than 9-out-of-10 blogs failed in the marketplace. The more layered answer is really about the amount of time and money that was spent on blog creation and it is still being felt in the form of public bailouts, bankruptcies and manufactured marketplaces.
In the current digital-first age, podcasts have become a popular medium for sharing knowledge, building networking communities, and promoting businesses. For companies, a podcast can be an excellent tool to build authority in an industry, generate sales leads, and create engagement with their target audiences.
However, launching and maintaining a podcast can be a costly and time-consuming endeavor. As a business owner, it is crucial to assess whether the return on investment (ROI) justifies the financial outlay and resource allocation.
This article will provide an in-depth breakdown of the direct and indirect costs involved in running a podcast, including time, money, marketing efforts, and the potential diversion of focus from core organizational activities.
Initial Setup Costs
Starting a podcast requires a few upfront expenses, primarily for equipment and software. While the price can vary depending on the quality of the tools you choose, here’s a breakdown of typical costs:
Microphone: A quality microphone is crucial for ensuring professional audio. Expect to spend anywhere from $100 to $500 per microphone. For example, the Shure SM7B is a popular choice among podcasters and costs around $400.
Audio Interface: If you are using an XLR microphone, you will need an audio interface to connect it to your computer. A good one, like the Focusrite Scarlett 2i2, costs around $160. More professional interfaces will run well over $500.
Headphones: Noise-cancelling headphones are essential for monitoring sound. Prices can range from $50 to $200.
Recording and Editing Software: While some basic software like Audacity is free, more advanced tools like Adobe Audition or Descript can cost between $20 and $50 per month.
Hosting Platform: Once you have recorded your podcast, you’ll need a hosting platform to distribute your episodes to platforms like Apple Podcasts and Spotify. This can cost anywhere from $15 to $100 per month, depending on the service and strategy.
Total estimated initial costs: $300 to $1,000 for equipment and $35 to $150 monthly for software and hosting fees.
Time Investment
While the financial cost of setting up a podcast is relatively clear, the time investment can often be underestimated. Producing a high-quality podcast episode takes significantly more time than simply hitting the "record" button.
Pre-Production: Planning each episode requires time to brainstorm topics, identify potential guests, conduct research, and create an outline. This can take anywhere from 2 to 6 hours per episode, depending on the complexity and length.
Recording: The actual recording can take 1 to 2 hours, depending on the episode’s format and whether it is scripted or an organic interview. However, additional time is often needed for setup, travel and troubleshooting technical issues. It is difficult to put a price on this, unless you are tracking the employee’s time and cross referencing their salary or hourly wage.
Editing: Post-production, which includes editing the audio, adding music or sound effects, and polishing the episode, can be extremely time-consuming. For every hour of raw audio, it can take 3 to 5 hours to edit, especially if the episode includes multiple speakers or complex sound elements.
Publishing: Uploading the episode to your hosting platform, writing show notes, and creating episode descriptions can take an additional 1 to 2 hours.
Marketing: Promoting the podcast is often the most labor-intensive aspect. And costly. There are billions of podcasts, why would anyone listen to yours? Creating social media posts, newsletters, and engaging with listeners across platforms can consume 3 to 5 hours per week. Plus the additional cost of any advertising.
Total time investment: Approximately 10 to 20 hours per episode.
Diverted Energy and Focus
Running a podcast is not just about time and money. As a business owner, your focus is one of your most valuable resources, and diverting it away from core activities can impact your business operations.
Opportunity Cost: Every hour spent on podcast production is an hour that could be dedicated to other revenue-generating activities like client acquisition, product development, sales procurement or employee management. For a small business owner, this opportunity cost can be substantial, especially if you are deeply involved in podcast production.
Team Distraction: If your team is involved in the podcast, their attention may also be diverted from their primary responsibilities. For example, your marketing team might spend time creating content for the podcast instead of working on other strategic initiatives. This shift in focus can affect overall productivity and slow down other areas of the business.
Energy Drain: Creative burnout is real. Producing weekly episodes can be mentally exhausting, especially when combined with the demands of running a business. Business owners must consider the mental energy and enthusiasm required to consistently produce high-quality content. Furthermore business owners must identify what their marketing and podcast goals are - to generate more business for the company, create product and service awareness or build their marketeer’s personal brand.
Podcast Priorities: Often times the podcast host’s personal brand will usurp the company’s brand. One easy way for a business owner to see where they are posting the podcast and attracting the engagement - on their personal social media page or company’s pages. The professional protocol is to post it on the company’s page and then to have the host share and repost the company’s page with the podcast on it. A company podcast is not recommended to be posted on a personal page unless the company is more interested in promoting the employee first and company last. Often times employees will use company resources to build their personal brands on social media in order to leverage new job offers, create and fund side hustles as well as promote their special interests.
Marketing Costs
Once you’ve created your podcast, you need to invest in marketing to grow your audience. Organic growth can take years, so paid marketing may be necessary to gain traction.
Social Media Advertising: To promote the podcast episodes on platforms like Facebook, Instagram, or LinkedIn, you may need to run targeted ads. Expect to budget anywhere from $500 to $2,000 per month, depending on the scale of your campaign.
SEO Optimization: If you want to drive organic traffic to your podcast, you’ll need to invest in search engine optimization (SEO). This may involve hiring an SEO expert, which can cost between $1,000 and $3,000 per month.
Guest Fees: If you want high-profile guests on your podcast, some may charge an appearance fee. Depending on the guest’s popularity, these fees can range from $500 to $5,000 or more.
Podcast Promotions and PR: Hiring a public relations (PR) agency or podcast promotion service to feature your podcast in the media or get cross-promotion on other popular shows could cost an additional $1,000 to $10,000 annually, depending on the level of service.
Experience Costs: How much media experience does your podcast host have? Media experience is completely different than marketing experience. Sure there are overlaps, but the end product, work flow and strategy are completely different. One quick comparison is a hot dog vendor operating a half a block away from a Ruth Chris Steakhouse. They both are in the same industry and their geographical location is close, however, to say they are the same is a gross misrepresentation and misunderstanding of the end product, professional quality and service.
Estimated marketing costs: $1,000 to $10,000 per month.
Hard Data on Podcast ROI
While it’s difficult to predict the exact return on investment for a podcast, there are some hard data points to consider when evaluating potential benefits:
Audience Growth: According to a study by Edison Research, 80 million Americans (approximately 28% of the U.S. population) listen to podcasts on a monthly basis. This represents a vast potential audience, but building a significant listener base can take time.
Lead Generation: HubSpot reports that 17% of marketers say podcasting generates the highest ROI compared to other types of content. While this shows potential, it is often contingent on the consistency and quality of the content, as well as a targeted marketing strategy.
Customer Retention and Engagement: Podcasting can enhance customer loyalty by providing valuable content that keeps your audience engaged with your brand. However, frequency is the number one factor when gaining loyal followers. Daily podcasts will attract more loyal listeners than weekly and weekly will attract more than monthly. Therein lies the challenge and escalating costs.
However, it’s important to understand that these benefits often take months or even years to materialize, and smaller businesses may struggle to see immediate returns.
Conclusion: Is a Podcast Worth It For Your Business?
The costs of launching and maintaining a podcast for a company—both in terms of time and money—can be significant. On average, a high-quality podcast can cost a business $2,000 to $5,000 per month in marketing and production expenses, along with 10 to 20 hours of labor per episode. Over the course of a year, this translates to an investment of $24,000 to $100,000 and upwards of 600 to 1,000 hours of time.
For larger businesses with dedicated marketing teams and established brands, the potential return on investment may justify the costs. However, for smaller companies or those with limited resources, it is important to weigh the opportunity costs carefully and ensure that podcasting aligns with broader business objectives.
Ultimately, a corporate podcast is an investment in brand building and customer engagement, but it is not a guaranteed quick win. Businesses need to have a clear understanding of the financial and time commitments involved, as well as realistic expectations regarding ROI.
At the end of the day, anyone creating a podcast is essentially starting a media company and is competing in the media marketplace as well as their own industry. Any business owner or decision maker with a podcast should really be asking themselves the basic question - is starting a new media company part of your company’s strategy or mission?
Article by Jason Spiess. Spiess has over 39 years of media experience from being the host to the publisher to an editor to the executive producer to having principal ownership in several media companies.
Spiess is currently the host of several newsmagazine radio podcasts that carry a 20-plus radio network, as well as worldwide through iHeart, Spotify and other podcast platforms. Spiess also operates a diverse professional social media audience with his media brands of over a combined 400K followers.
In addition to his newsmagazine radio podcasts, Spiess is a regular contributor to many industry publications, radio shows and traditional news websites.
Spiess is a full-time father, cancer survivor, environmental steward, author and graduate of North Dakota State University. Spiess also operates an off-the-grid office integrating sustainable solutions, including the best practices with an Industrial Forest and Digital Diversity.
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