Before you can introduce podcasting into your marketing mix, you’ll probably have to convince your marketing manager, marketing director or CMO that podcasts offer a positive return on investment (ROI). While you might be wondering how to measure the success of a podcast, no doubt, their first question will be around how to measure ROI on podcasts.
Unfortunately, most of the information available on how to measure ROI on podcasts relates to self-publishing podcasters and how they can get a return on their hard work.
Instead, we’ve taken a close look on how to measure ROI on podcasts from a business or marketing perspective, particularly if you’re using a podcast production agency.
In this article, we outline three different methods of how to measure the ROI of podcasts, including the all-important dollars and cents, as well as the brand ROI and educational ROI.
First up, let’s get some clarity around what ROI is and how to measure ROI.
What is Return on Investment (ROI)?
The challenges of measuring return on investment are a bit of a contradiction. Depending on your role in an organisation, ROI can be very easy to calculate – for others it’s very difficult.
The easy side of ROI is the formula – revenue minus expenses, divided by expenses.
ROI = (revenue – expenses)
Boards and CEOs love the simplicity of that ROI calculation. From a macro level you can say we put this much money in, and we got this much more money out.
The great challenge of ROI is that it means different things to different people. In business, budgets are divided up amongst departments – and those departments are further segregated into activities performed by employees.
The more micro you go in looking at ROI, the harder it becomes to determine which revenue relates to which expenses.
How to measure ROI
Years ago, when I worked in public relations (PR) we would put together clip books with each column-inch of press and every second of radio or TV we achieved. At the end of each campaign, we’d determine how much it would cost in advertising dollars to support marketing activities in the same way and that was our ROI.
With the power of today’s digital marketing, we can count views, click-throughs, sign-ups, and downloads, and determine the audiences from where each of those metrics came from.
However, both measurements are problematic, because the aim of marketers and advertisers is not to get the most clippings, or the most clickings!
Marketing efforts are supposed to lead to outcomes like sales, satisfied customers and repeat business. Not only are these returns on investment more difficult to measure, but even harder to trace back to individual business departments.
The ROI challenge increases when the marketing department is divided even further into the marketing funnel. For those working at the mouth of the funnel on awareness, is the return on your investment less than the return of someone working at the pointy, action end of the funnel?
Both of you are essential to the Awareness, Interest, Desire, Action (AIDA) stages of the marketing funnel – but one is closer to the return, while the other requires a whole lot more investment.
The function for calculating return on investment never changes, it’s just the definitions of revenue and expenses that differ.
Podcast ROI vs podcast advertising ROI
Before we explore how you can measure the success of a podcast, it’s important to define what we mean by investment in podcasting.
You can invest in a podcast by advertising on someone else’s podcast, or you can invest in a podcast by making your own brand or organisation podcast.
Advertising on someone else’s podcast is a lot like affiliate marketing, or advertising on radio. You identify a podcast that has an audience you want to reach and generally the podcast hosts read your ad as part of their podcast episode.
Making your own podcast is a way of investing in a podcast that gives you total control over the production. You get to choose the content, define the audience, and manage the distribution.
Advertising on someone else’s podcast is the old media buyer’s model, while making your own podcast takes advantage of the possibilities of audio hosting platforms to be your own media channel.
How do you measure podcast success? The ROI of being your own media channel can be measured in three different ways.
Financial ROI of podcasts
The financial return on investment of podcasts is the simple number that managers, boards, and shareholders love. It says, “we put this many dollars in and we got this many dollars out.”
While the ROI formula of revenue (minus expenses) divided by expenses is simple, unfortunately it’s not that easy to apply the formula to a podcast. The main difficulty is created by the position podcasts occupy in the digital marketing funnel.
Podcasts play a big role in creating awareness, they excel in developing interest and they’re great at building relationships of desire. When it comes to action, podcasts sit back with the satisfaction of a job well done, while other digital marketing tools step up to the plate.
The further you get from the bottom of the funnel, the harder it is to demonstrate a financial return on investment. But, like other digital marketing tools it’s possible to determine performance that influences ROI.
We made a podcast for the Burnet Institute with the intention of raising awareness of the medical research organisation. The Burnet Institute is a not-for-profit that relies on donations from the public to fund its mission to achieve better health for vulnerable communities in Australia and internationally.
The Australian Institute of Health and Welfare tells us that Australians over the age of 70 donate an average of $4500 each year, while those under 40 donate less than $500. Meanwhile, the University of Canberra tells us that more than half of all Australians under 40 listens to podcasts, while only 10% of those over 70 are plugging in.
So, when Burnet Institute’s podcast had over 4000 listeners in its first week, we can say confidently that the majority of them were young people who were not regular donors to the organisation. We also know that those 4000 listens were an active choice, they weren’t just 4000 views of a social media post, email or direct-mail.
Audio hosting platforms provide metrics that tell us how many people listened and how long they listened – essential data in how to measure the success of a podcast.
The financial ROI of the podcast may not be realised for a few years, but awareness of the Burnet Institute among millennials has increased. No doubt they’re more likely to consider supporting the medical research organisation as their capacity to donate increases in the future.
Another way to measure the success of a podcast is to compare like for like. If you’re wondering how to measure podcast performance in terms of educational outcomes expressed in numbers – you can calculate an ROI figure with this formula:
ROI = educational outcomes
Educational ROI is a good measurement to use for podcasts distributed within organisations for educational purposes. It’s also useful for public-facing podcasts that have an educational intent.
We made a podcast for the Department of Education to provide information to teachers on adjustments they can make in the classroom so that students with disability can learn on the same basis as their peers.
The aim of the podcast was to deliver information to teachers in a way that was enjoyable, convenient, and available when they needed it.
The ROI challenge was how to measure podcast metrics without a revenue component.
The podcast download figures revealed high levels of teacher engagement, with well over 211,000 downloads. When you consider that there’s around 289,000 teachers in Australia, the download figures indicate that a majority of teachers have listened to the podcast.
The Department of Education were so pleased with the educational ROI, that when it came time to provide more information to teachers, a second podcast series was commissioned.
Brand ROI of podcasts
How do you measure brand ROI or even just the value of a network of functional and emotional associations between your customer and your business? Identifying the ROI on activities related to your brand can be as difficult as defining brand itself.
What we do know about brand is that its value lies in the place it holds in our customer’s consciousness and their relationship with it. Brand marketing efforts intend to positively influence that relationship and the intimate nature of podcast listening is the perfect way to do that.
The ROI of branded podcasts is about more than money – it’s the metrics around awareness, connection, influence and so much more.
We worked with Professor Caron Beaton-Wells to create her podcast Competition Lore.
One goal of the podcast was to create a non-traditional research output (unlike a peer-reviewed journal) which brought academic knowledge down from its ivory tower so we could all access it. Another goal of the podcast was to elevate the brand of Professor Beaton-Wells.
Even as a senior academic at an esteemed university, Professor Beaton-Wells rarely had the opportunity to get into a room with senior management from Google, Facebook, or the Australian Competition and Consumer Commission (ACCC).
Instantly, by inviting them to be interviewed on the Competition Lore podcast, Professor Beaton-Wells created the opportunity to speak to all these people as well as senior academics from universities in USA, Europe, and India.
Right there, you’ve got the answer to the question, ‘how to measure the success of your podcast.’ But wait… there’s more.
The network effect of these interviewees helped build listeners for the podcast and grow the professor’s brand.
Professor Beaton-Wells was invited to deliver the keynote address at the United Nations Conference on Trade and Development in Geneva. If that wasn’t ROI enough, she got to measure the brand ROI of the podcast firsthand when a number of listeners approached her at the event.
As the podcast continued, she was invited to speak about Competition and the Digital economy at the OECD in Paris and the Australian Davos Forum in Queensland. Professor Beaton-Wells was also appointed to the Australian Competition Tribunal, the Australian Government’s review body for decision makers like the ACCC.
The brand ROI of podcasts is difficult to forecast in SMART objectives, but when you look back you often find an ROI narrative that’s worthy of a podcast itself.
The most important podcast ROI belongs to your listeners
Measuring the ROI of podcasts is an effective way to make sure that you get what you want out of the podcast you’re making. However, before you make a podcast, it’s essential to identify your audience and ask what they want to listen to.
Your audience holds all the answers when it comes to how to measure the ROI of podcasts in Australia.
That’s where we can help. We’re a premium podcasting service that makes podcasts that get your point across in a way that audiences want to hear. Drop us a line in the contact form below or call 0425 819 662 for a chat about creating some podcast ROI of your own.