YouTube Ads - What's the Value?

Listen to the full Deep Questions podcast: https://www.listennotes.com/podcasts/deep-questions-with-cal-newport-cal-newport-t94EC0dyxsL/ (clip is from 40ish mins in)

Notes

• YouTube CPM $2.50, Audio CPM $25, yet Audio gets paid for non-listened downloads
• Low end YouTube podcast audience 37k, high end 400k views per episode
• Audio makes way more for something half that audience
• Audio targets 25-45yo professionals
• Bigger shows like Marc Maron have lower CPM, $9
• Science and education show: $35-40 CPM
• Chillax show: $15 CPM
• 10,000 fans * 4 ads a week * 25 CPM each ad = $1,000 a week, $4k a month
• 50,000 fans  => $20k a month
• Sales cut - 15-30%

Transcript

[00:00:00] swyx: Hey everyone today, I'm featuring a conversation between Cal Newport and Jordan harbinger. Both of whom are top podcasters talking about the economics of podcasting. So there are very few people who are as qualified to talk about it because the actual Lee have numbers and they make their living. 

[00:00:19] swyx: Partially at least on podcasting. There's two angles I'm interested in here. The first is of course just how people make money and what kind of money people make from podcasting. And second of all, I've been very interested in YouTube podcast versus audio podcasts. And Jordan goes a little bit brutally into why YouTube is just not that popular for podcasting. 

[00:00:38] YouTube vs Audio CPMs 
 

[00:00:38] Cal Newport: I think a little economics for my listeners will be useful to try to understand actual money amounts so that they can understand right now where the industry is before we go to where it could go in the future. So it might, if I'm correct. And I hope so because I'm doing some of this. Um, so our core number here to think about is four, uh, adds a CPM. 

[00:01:01] So cost per mil, meaning thousand, um, which is how many, how many dollars. Per a thousand people that are going to hear an ad, right? So is this, I think this is, this is the cord number, right? When trying to understand how to putting aside other types of revenue, but just for passive advertisers, this is the cord number. 

[00:01:21] Jordan Harbinger: Okay. It is, although I will nitpick one thing you mentioned, it's the cost per mil cost per thousand people who will hear an ad with podcasting it's actually download or even stream it doesn't mean listen. And there's a difference here for people who aren't super familiar with it. You probably have podcasts on your phone that you've downloaded, but you've never listened to, if you've got the Jordan harbinger show queued up on your phone, and there's an episode that you didn't think was interesting, but you still download it and you plan to delete it later. 

[00:01:48] I still got paid for every ad that is in there, you know, that fraction of a cent or whatever it is from you. So thank you for that. Um, That's important, an important distinction, because if you're a YouTuber, you don't get paid for somebody thinking about playing your video, right. You only get paid. If somebody hits play, they don't necessarily have to see the ad either they can quit halfway through and it counts as a play, but usually there's some sort of dynamic insertion that only inserts when you're playing yada, yada. 

[00:02:14] But what this means is it's important for the CPM, because what it means is the CPM for a podcast ad that is actually listened to is something like. Nine X or 10 X, the actual amount that you're getting paid per thousand downloads. So if, if I'm looking at it, there's some new technology that does this and they say, okay, we're only gonna pay you for the amount of people we think heard the ad. 

[00:02:43] And, but your CPM is 250. Yeah. Whereas if I sell an ad wholesale and I, and you pay for downloaded or streamed or listened to my CPMs, like 25 bucks. So it makes the pricing different, but it also shit, it sheds light on how valuable a viewer of a YouTube video is versus a listener of a podcast, because if you're a viewer of a YouTube video and you're getting three bucks CPM, and I'm getting, let's say 250, let's say you're getting two 50, $2 and 50 cents for a view of a video just to keep them. 

[00:03:15] I, my listeners are worth a hundred times more than your viewers, which means that a thousand people listening to a podcast is worth like a hundred thousand people watching a YouTube video. Now that is not actually true, but that's how the math works  

[00:03:29] out.  
 

[00:03:29] Cal Newport: Yeah. And what's interesting about it is, and this might have to do with the ad form because if you have. 

[00:03:36] Full U-turn version of your podcast. A lot of ad agencies are going to, um, count those views of the YouTube, like a download. So, so in other words, there's something about the host delivering the ad, I guess that, whereas the value is. If you listen to it, you're watching the host and the host is delivering an ad on a YouTube video. 

[00:03:58] And that's much more valuable, I suppose, than a banner pops up. Totally huts. It cuts to one of those skip, skip and five, uh, right. Like  

[00:04:05] Jordan Harbinger: Alexis ad in the middle of your favorite podcast. Exactly. Those are with way less and, and you're right. The host read is where the value is now. Again, slight nitpick just for the sake of being accurate here. 

[00:04:16] Um, if you have a, a YouTube based podcast where most of your views are YouTube, Yeah, you will generally get a lower CPM than somebody who's mostly get audio. Like if you look at my YouTube channel for the Jordan harbinger show, I've got like, I don't know, fricking 37,000 subscribers. Like no one is subscribed to my YouTube channel and no one's watching very few people are watching. 

[00:04:36] But my youth, my audio only impressions are obviously far higher and those ads are worth thousands of dollars each. Whereas I know a lot of people that have the inverse proportion where their audio downloads are sort of few, but their YouTube impressions are very high. Like 400,000 people are playing each video. 

[00:04:55] They're making far less money. Then somebody who has a podcast, an audio podcast show that's half the  

[00:05:01] Cal Newport: size. Yeah. Fair enough. So, so, and I've seen that before. Yeah. If you, if you have a big audio podcast, it's almost like the, the, the advertisers or the intermediate agency is saying, okay, if you have some extra listens or views of the show on YouTube, you can throw those into the count, but it's almost like you're being thrown a bone a little bit, but if you're a primarily. 

[00:05:21] Be that way that if it's you doing the read on YouTube, it shouldn't matter. But, um, I don't know if that's about a prejudice against who's watching YouTube or I think it is.  

[00:05:30] Jordan Harbinger: I think I hypothesize YouTube is a younger audience and also an older audience. And what I mean by that is I think. There's a higher concentration of, let's say 25 to 45 professionals that are employed listening to podcasts. And there is everyone is watching YouTube, but there's, that means there's...