How to Apply a Business Mindset to Your Podcast, With Gary Arndt

How much money does your podcast bring in for every new listener that you get? How much money can you spend to get even more listeners of your podcast while still making the podcast profitable? Do you know the answers to those questions? Now, if you haven't monetized your podcast yet, that's okay, but even if you have monetized your podcast, there's a chance that you still don't know the answer to those questions. And in either case, whether you have monetized or you haven't yet but you plan to, these two questions are crucial. Because if you're able to answer them, you'll give yourself the clarity that you need to know how to grow your podcast audience in the fastest and most fruitful way possible. For me, I know that every listener of Grow the Show brings in about $250. The show has gotten about 40,000 downloads. Each listener has listened to about 10 to 15 episodes and about 4 to 6% of those listeners have converted into clients of the Grow the Show podcast accelerator. That is all combined to bring in a shade over $500,000 in revenue in Grow the Show's first 18 months, which is totally mind-blowing and I am so, so grateful to all of you for that. But because I know that each Grow the Show listener brings in about $250, I know how much I'm able to spend in order to get more of them. And there's a really good chance you saw one of my Instagram ads, which cost me money. For example, purposes say it costs me about $100 to get a new listener. If I bring in an average of $250 per listener, that means I get to keep $150. Pretty awesome, right? And pretty simple. This figure that we're talking about is called Annual Listener Value or Annual Subscriber Value. I call it ALV and knowing this number makes it way, way easier to decide which strategy to use when growing your podcast audience. And again, even if you haven't monetized yet, if you haven't cast your first check, if you really do want your podcast to be a thriving business someday, you have to start thinking like a business owner now. And that's what this episode is gonna help you do. But it's not gonna be me just helping you figure this number out because today on Grow the Show, we are joined by a world famous travel blogger. And the world's fastest growing podcaster, according to me, Gary aren't. Gary is a beloved member of the Grow the Show community in our free Facebook group. He launched his daily podcast called Everything Everywhere towards the beginning of the 2020 pandemic. And in the roughly 18 months since then, his show has garnered over a million downloads. And that's happened because Gary has spent the last 18 months painstakingly experimenting and testing out virtually every single podcast growth method you can think of. And today, he's not only gonna walk you through how you can calculate your current or future projected annual listener value, but he's also gonna share which of those podcast growth methods? Some of them free, some of them paid, have been the most effective. And which ones you can start using right away to grow the show. This is Grow the Show. The podcast that helps you grow your podcast. My name is Kevin Schmidland, and my mission is to help you the podcasting entrepreneur to grow your audience and monetize now so your show can be a thriving business. Today, we're gonna be joined by Gary aren't million download podcasting as short and air, and he's gonna share exactly how he hit the seven-figure download mark in only 18 months and how you can too. All of that is now on Grow the Show. The Show. Today, Gary aren't is a well-known blogger and podcaster who originally built his career off of traveling the world. Gary is an OG travel blogger who has a massive online following and has even been named by Time Magazine as one of the best travel bloggers in the world. Given that, you would think that Gary has been roaming the earth his whole life, right? But that's actually totally not the case. Gary was a bit of a late entry to the travel scene. In fact, when he was growing up, he barely left his home state of Wisconsin. Famously, I tell people the first time I saw salt water when I was 21 years old, I was going to the national debate tournament in Bellingham, Washington, and we landed in Seattle and we were driving past this park near Puget Sound and we were in a big 15-pass near van. And I was like, stop the van, stop the van. And I ran to the water and I tasted it because I never experienced salt water before and I needed to verify that it was in fact salty. So in the early days, Gary wasn't a traveler. He also wasn't a blogger. I started a very early internet company back in 1994 and we were doing integration with websites and databases. And then in 1998, I was 20 years old. I had 50 people working for my company and I sold it to a big multinational firm. At this point, having seen a bit more salt water, Gary was starting to feel the travel itch. So when I sold my company, I conned the company that I sold it to to send me to their offices around the world. They sent me on a three-week whirlwind tour, I went to Tokyo, Taipei, Singapore, Paris, Frankfurt, London, Brussels. And after that, I did a trip in I think 2000. I went to Iceland for the heck of it. And then in 2005, I did a trip to Argentina. It was a research trip for geology. And that's when I came up with the idea of selling my home and traveling around the world. Wow, it was in my mid 30s at the time. I had no wife, no kids, no obligations. It took me about 18 months to tie everything up. So the house in March 11th, 2007, I turned over to the keys to my house and started traveling. And I thought I'd be gone for a year or two. It turns out the earth is really big. And it kind of dawned on me at that time that, oh man, this is really gonna take a while. This was almost 15 years ago. So there was almost no social media. Sharing your trips wasn't as easy as uploading a photo to Instagram like it is today. But Gary still wanted to share his travel experience. So being an internet guy in the 2000s, Gary did what internet guys do. I started a website for my travels right away. It was primarily for friends and family. And there was no travel blogging at the time. Today, it's almost a cliche to say, I wanna quit my job, sell everything and start a travel blog, right? But back then, this was actually unheard of. There were very few travel bloggers and seemingly fewer travel blog readers. I could tell you the names of most of the people that were reading the website. Travel blogging was niche and it was cool, but it was not a booming business. And I realized, okay, this isn't gonna work, but nobody was making it work. There were no professional travel bloggers. No one in the travel industry even talked to me until I had been doing it for three and a half years. But Gary saw potential for a business and he loved what he was doing. So he decided he was gonna be the guy that figured out how to make it work. I was in Hong Kong. I went to a newspaper stand. I bought all the travel magazines I could. I created a spreadsheet and I did an analysis of all the magazines. I don't have a background in journalism or anything. I said, what is in these magazines? Why do people buy this? Gary put himself in the head of his target audience. What is the value that they're looking for? I think I realized was that it's basically the equivalent of travel porn that people are looking at this, fantasizing about places they wanna visit. And photography was a big part of it. So I was like, okay, I'm gonna start posting a photo every day to my website. And I did that for eight years straight. And at first they weren't great. I'm really kind of embarrassed today at some of the photos I put up. But eventually I got pretty good to the point where I was winning major awards against, you know, like National Geographic photographers for my work. In addition to posting a photo, Gary would also include a little blurb. I would write something just giving my thoughts about whatever I thought that day. And I'd use a clever headline of a song lyric or something like that. I didn't put any thought into SEO or anything like that. I was just doing stuff. With time, people started going to Gary's website every day. And they didn't just read his posts. They commented, they engaged. And Gary had figured out travel blogging. But just then the internet landscape changed. People stopped going to websites and they stopped following websites. And all of the traffic to websites started to become ephemeral. This is because social media was invented. And the likes of MySpace, Facebook and Instagram became the only places people went to consume content online. So it became harder and harder to get organic reach. And today, the whole blogging world at least in travel, everyone's just turning out the same top 10 list type articles for SEO. And that's all it is. Either way, despite the breakneck evolution of the internet, Gary spent over 15 years traveling to 200 countries and territories. He won awards for his photography and his writing. And he spoke at travel conferences. He basically built the travel blogging career that very, very, very many people dream of. But then all of that basically disappeared overnight. In my wildest dreams, I never imagined that the travel and tourism industry, which a lot of people don't realize is actually one of the largest industries in the world, everything just died. And I lost about 95% of my income between March 1 and March 31 of 2020. And even when some people talk about, well, when things go bad, you can rely on your network. Well, my network was all in the same boat. And they were in a position as bad or worse than me. So it's not as if I could contact these people and say, hey, you guys want to do a project or something? No, everything was just gone. And I had to do something. And that's kind of where the genesis of the new podcast started. As you well know, podcasting was one of the few things that was in no way stopped by the pandemic. If anything, it was accelerated. Gary, like many of us in quarantine, decided to start a podcast. But also, like many of us, while Gary didn't actually launch his show until quarantine, quarantine wasn't the first time he considered launching a new show. In fact, when 2020 began, Gary had already made some progress towards launching a podcast. I had artwork made. I had bought the rights to theme music. I had everything set to go. And I began doing research. And every show was going to be something completely different. I had enough for like a three hour show. But remember, this was pre-pandemic and Gary was still busy traveling and writing. Given that, launching a podcast where each episode is super long, didn't really fit into his schedule. And I just kind of just said, well, this isn't going to work. And I put her to side. Fast forward to quarantine. And suddenly, Gary had enough time. On top of that, he was about to get a timely piece of advice from another podcaster. I met a guy I know who's been involved in travel, but not the travel's not really focused. Chris Gillibot, who does a daily podcast called Sighthouse-L School. And we were talking, he said, doing a daily podcast was the best thing I've ever done. And I thought, OK, the original idea I had wasn't going to work. And then I thought, well, what if it's a daily show? So I started looking at the math of a daily show. And it was like really compelling. So I thought, OK, I'll do the same format. And this will, I can have one foot in the world of travel. Meaning I can talk about all the places I've been and the stories I've learned and the things I had, but I won't be bound to it. If I talk about the Leaning Tower of Pisa, which I did an episode on, it's about the history of it. Why this thing exists, why it leans, famous events about it. This was a totally different concept. Gary's new podcast would look very different than the podcasts that most people start these days. Instead of really long, unedited, weekly episode featuring interviews, Gary would do something totally different and release small, daily, scripted episodes. And on July 1, 2020, that's what I started doing. I do a scripted daily show. I have to write a 1,500 to 2,500 word script every single day. Now, what we haven't mentioned yet is that this show, which is called Everything Everywhere, is actually Gary's second podcast. This first podcast has actually been around for a really long time. Early on, back in 2009, I went to the very first conference for travel bloggers, which was in Chicago. And I was a big fan of this week in tech with Leo Laporte. And one of the other big travel podcasters was there, another woman I know, and we were sitting around at a bar. And I said, do you guys like to start a podcast? And so we started this week in travel, which we've been doing. 2009. Yeah, and we've been doing it ever since. I just uploaded this week's show right now. So I've been podcasting a while, but we never took this week in travel seriously. Because we had three co-hosts. We never monetized it. It served its purpose. Basically, this week in travel was meant to be a supplement to Gary's travel blog. But there was no plan to turn the podcast itself into a business. Everything everywhere has a different story. The difference was this time, I started it with a business in mind, with a plan. I had a set format that I developed for the show that I've never deviated from. And an idea of exactly what I was going to do to grow the show. And that's what I started doing. Since then, Gary has surpassed the 1 million download mark, and his podcast has been picked up by a network. So what did he do to take this podcast from 0 to 1 million in just 18 months? Well, it turns out that Gary has used a ton of different strategies to grow his show. And what's great for us is that he has treated every single strategy like an experiment, meaning for every growth strategy Gary used, he's been super careful to track and measure exactly how well that strategy worked, and whether the juice was worth the squeeze. This is something that you should start doing now in the earlier stages of growing your show. That's when you can most easily see if something is working. Because a spike in 20 downloads a day may be huge for someone who just started a show, whereas if you have tens of thousands, you're not going to notice 20, right? That's going to be lost in the data. So that's the time where you can really start to experiment and see what works and take the data approach every single time. And once you find something that works, double down on it if you can and keep doing it again, and the things that don't work, stop doing it. It's always better to do more of something that's working than to start from scratch with a different strategy. I see this all the time with podcasters. They ask, how can I start getting PR? To which I ask, why do you want PR? They say, so I can grow my show. I say, well, is your show growing now? They're like, yeah, I say, how? They say, by me being a guest on other podcasts. And I'm like, so why start PR from scratch? Why don't you just do more of that? It's counterintuitive, but it's actually better to scale one strategy that's working than to try to do a little bit of a bunch of strategies that really aren't working. But then that begs the question, how do you know which strategy works? Always look at data. There's nothing wrong with, okay, I'm gonna put my new episode on Instagram. Okay, did you see a spike in downloads after you did that? Okay, try it without doing it. Try putting on a different platform. Did you see a spike? I've skipped a couple days on Instagram. You don't happen to my traffic? Nothing. Absolutely nothing happened. But I did notice, and I never used TikTok before. I talked about all these platforms I've grown. I've never bothered with TikTok until I started my podcast, just for the hell of it. I created a TikTok account and started throwing up the videos that I was putting on Instagram. A couple of them went quasi viral, where they got several tens of thousands of views. And I did notice a spike in downloads. So always use a data driven approach. Don't be banging your head against a wall without seeing results. Once you find a strategy that works and you go all in on it, eventually, it'll actually stop working so well. Every phase of growth, you have to kind of adapt your strategy to something else. And it's scary because you often don't know what it is. So eventually, I'm a couple of months into doing the show. And I keep abreast of everything that's going on with different podcast apps. And I notice a lot of people doing advertisements on certain apps, so I look into it. And so I started buying advertisements on podcast apps for my show. And that has been a real eye-opening experience. And that is where a lot of my growth has come from. Now, I know when I first started in podcasting, I was super skeptical spending any money at all on my podcast. And that's true with a lot of new podcasters. There's this weird mentality that everything about podcasting should be totally free. But that's not how you treat a business. One of the problems I've noticed, and I've seen this in blogging for over a decade, and I've seen it in podcasting now, is so many people want to start a show, and they want to make money, but they want to spend nothing. Absolutely nothing. It's like $5 for a monthly Lipson account is too much. That's why they'll use anchor. If your show is not worth a $5 investment, you're probably not going to make any money. This is not going to be a successful business. Because I don't know of any businesses in any niche where you can be successful with a zero investment. You have to spend something, a couple hundred bucks maybe, right? And I don't know why that's unreasonable. If you look at a major motion picture, if they say it costs $200 million to make, a hundred million of that may be marketing, right? I don't see why podcasting is any different. And I think this is a mature enough medium now, where the build it and they will come days are kind of over. We're not saying that you have to start throwing money at every roadblock you encounter, because that's not what you should do. And it's certainly not how Gary has become so successful. Gary's success in blogging and podcasting is because he has learned the question that you must ask if you want to know how much money you can afford to spend in order to grow. And that one question is this. What is the value of a subscriber? Because once you have that number, everything kind of makes sense at that point. Or at least it gives you some parameters to work under. That you don't want to be spending a ridiculous amount of money to acquire subscribers. But it also says, yeah, I can spend this amount of money in and still be doing well. So how do you find the value of a subscriber? It turns out there's a pretty simple formula. You do it based on how you get revenue. And you need to figure that out. Gary's show is monetized via paid ads. So here's how he calculates the value of a podcast subscriber. So really all you're figuring out is the number of ads per episode times the number of episodes in a year times your CPM. CPM stands for cost per mill. Mill is Latin for 1,000. So when you run CPM ads, you get paid your CPM rate for every 1,000 downloads that an episode gets. So for simplicity, let's say that your CPM is $25. That means for every download you get, you make 1,000th of $25 or 2.5 cents. If you have two ads in each episode, you double that to $5 per download. And if you publish your show weekly, which is about 50 times per year, and you assume that your podcast listener listens to every episode for that year, that means that with these numbers, for every listener you have, you make $2.50 per year. They listen 50 times and you make $5 per download together, that's your annual listener value or ALV. This was probably a lot to take in without any visual component. So we did make a handy cheat sheet for you to use to calculate your annual listener value. The link to that is in the show notes. Okay, so that's a basic way of calculating ALV if your show is monetized via CPM paid ads. But what if your show is monetized in a different way? What if you have CPA ads or you're like me and your show is monetized via a product or service? Or what about those who are monetized via Patreon? If it's on Patreon, then you need to figure out, okay, if I have this many listeners, what percentage of them are converting into patrons and what is the average amount that they're donating? Very simple. And then you can just, if you're doing advertising, you can add that on top. If you're selling a good or service, again, how many people are listening to the show? What is the average number of people that convert to whatever the product is? From there, you can then figure out the average value of a subscriber in terms of your product. And this doesn't have to be a super precise number, but you need a ballpark. Even if you haven't started monetizing, it's a good idea to go through this exercise. And I did this even before I launched my podcast. I said, okay, this is what I know the CPMs are for the industry. And when I get to that point, I'll then be able to monetize it. But I also, because I did it before I launched the show, I was able to say, okay, what would it take me to get to that point where a podcast network would want me in to start selling ads? And how much would it cost me to acquire that size audience? You know, when I did the math and I realized, I could build that audience and basically recoup the value within one to two months. And so that's the other thing that will go through it. It's like, okay, if I know what it's worth and I have to meet a certain threshold, then once I get to that threshold, how much would it take me to recoup my investment? And this is what every business does. If you're starting a restaurant or you're starting anything, you're gonna have to make an investment up front. You're gonna be bringing in revenue later on. How much will it cost to pay off the investment? Really straightforward. And podcasting, if you think of it from those terms, like it's an investment for a normal business, the returns are really good. I mean, they really can be because you don't need to spend a lot of money. And once you can get to that threshold, you can start to recoup it rather quickly. If you're like me, you did not think about these kinds of numbers when you started podcasting. And that is totally fine. You can still build a solid foundation without them, but learning these numbers at any point in your podcasting journey, AKA right now, is going to be insanely valuable because it'll remove the mystery and the mystique behind podcast monetization. It's not easy, but it is actually simple. The other benefit to knowing your ALV is this. When you know how much money you make per listener, you also know how much you can afford to spend in order to get more listeners. So if your ALV is $10, you can spend $5 in advertisement to get a new listener and you get to keep an extra $5. Scale that into the thousands and you've got yourself a thriving podcast business. Sounds great, right? So the next logical question after that is, okay, I know I have the budget to spend to get more listeners, but where and how do I spend that money in a way that actually works? Well, this is what Gary has been testing and tinkering with for the past year and a half. And the one he's here to tell you about and the one that's most interesting to me is advertising in the podcast listening apps. Pretty much all the various podcast apps that are available if you'd like that are out there because they're all different, they all have different pricing and you kind of have to know what's up with all of them. And it's not something like Facebook advertising where you can do a test for $20 and see if it works. You have to pretty much buy a month so you're making a commitment of at least several $100 to test this out. Second, you know how the other thing, oh, you need to niche down. Like my show is literally the antithesis of that. So in this case, it would be beneficial to be less specific. It sounds like. To a point, but you know, there are lots of history shows and you can buy like an overcast, you buy your ad for a category. So if you're a sports show or a history show or a educational show, you can just buy that category. So you can be niche within that category and I think you'll do fine. But if it's hyper-hyper niche, where you're really only talking about a few people that may ever be interested in it, then this is probably now what you want to do. If you've heard any episode of this show before, you know that I very much recommend going as niche as you can. And my podcast is admittedly to niche at this point to utilize these types of ads. But I wanted to know which podcast listening app ads have generated good returns. Podcast Republic has been good. Podcast Addict is doing well right now. Their rates are reasonable, especially if you buy two months in advance. Every podcast app does it differently. Podcast Addict do it by calendar month. So it starts on the first ends on the last day of the month. They do it two months in advance. So right now, we're recording in November, you can book December and January. So I always get on like the first of the month and then I book it for I book January, say on November first, because the rates are cheaper the earlier you buy it. Overcast, I just finished an add on overcast in the history category. And I bought it for about $350. The price has recently got up to $750. So now I'm just waiting for it. I look at the price every day and I just wait, wait, wait, wait, wait, wait for it to get back down to somewhere in the 300, whatever range. Because I just don't think it's worth it beyond that. And I've tried other categories as well, but education is the other category I've tried, but that tends to be very expensive, more expensive than history. And like the business categories are the most expensive at all because there's just so much competition. I'm not gonna stop doing that because it works. But the thing I'm doing now are feed drops. And this is kind of the advanced thing. Odds are, you're not yet in the place to toss a few hundred bucks into the streaming apps and see what happens. But this next strategy for growing a podcast, everybody can do. It's called a feed drop. There was a podcast that got launched on November 1st by a large network. And I followed the host on Twitter and he was saying after two weeks, they had like 30,000 downloads per episode. That's really good for two weeks. And so I'm always looking to see, okay, well, how did they do it? So I began a reverse engineer it and I tried to research what they did in terms of promotion. I searched for it on Google, I could find nothing. There were no mentions of it on any website I could find. I searched for it on social media. I could find almost nothing. But what they did have were feed drops on very big successful podcasts. And that's basically where they got it from. So I finally reached out to one of my friends who has a really successful history show. He's got 40,000 people downloading an episode. And I said, hey, are you ready to do that feed drop? He goes, yeah, anytime. So I finally sent him the script, sent him the audio file and he's gonna be putting it up. I literally just sent it to him like 10 minutes before I started talking to you. And hopefully that'll be up sometime next week. And 40,000 people will hear an episode of my show. This is what all the big podcast networks do. I listened to one show on Wondery and I swear to God every week, they're doing a separate thing in the feed for a new show. So what a feed drop is, is you put in a full episode usually or it could be part of an episode. But it's not embedded in a regular episode like an ad would. It's separate in the feed and then you take it out of the feed after say two weeks to a month. But basically people can hear the whole thing. And if you have a show that is on a comparable size of yours, you could just do a feed swap. I know of many people that have done that. But this is how the big networks are big. They get one big pillar show, then they use that show to promote the next show. Now, not everybody is going to get tens of thousands of downloads from this method, especially if you aren't a member of a giant podcasting network. However, there's a reason that all the big networks do this. It works. So if you're an independent podcaster and you want to experiment with feed drops, episode swaps, trailer swaps, I recommend you simply head to listennotes.com and search for other podcasts that are in your niche and reach out and see if you guys can collaborate. You can also find 1,700 other podcasters, including me and Gary in the Grow the Show Facebook group. And I guarantee that if you hop in there and you ask, you will almost certainly find someone who is down to swap. The link to join us in there is in the show notes. Grow the Show is written and produced by me in Catherine Nails with host production by Jeremy Bishop and a very special thanks to Gary Art. For Grow the Show, my name is Kevin Schmidland. Until next time.