Podcast Advertising – By the numbers

So its been quite a while since i talked about podcast advertising here (mainly because I’ve been so busy, and also nothing new was being talked about in this market).Well today we’re going to look at how the numbers break down in podcast advertising (now remember, this is based on pre-launch figures). The basic premise of podcast advertising as I see it now is something similar to radio and tv ads, in which they are passive audiences that are reached by the thousands. Unlike radio and tv, where there is no way of selling your ads to an exact number of people (you have to hope the ads you bought months prior will reach as many as the network claims), podcasting offers precision download statistics, thus making a CPM (cost per thousand) model the ideal way to go.Using a CPM model we can effectively compute the revenue we generate per podcast. So for simplicity sake, lets assume a cost per thousand of $10 (which is probably at the low end of the scale). This means for every podcast downloaded, we are charging $0.01. 1 cent folks, this is a rounding error for most people, but here it isn’t about the pennies, its about the aggregate.So now that we’ve got our income, how much does it cost to host a podcast? Well if you were to use your run of the mill shared hosting, and figured for $20/month you can host 1000 podcasts (1000 x 10MB each = 10GB of traffic), then it is effectively costing you $.02 per podcast to run this show (all other costs excluded for this argument). By using the scale we’re looking to provide at castvertising.com, you effectively group the buying power and scale advantages that large scale webhosting has to offer. So with that in mind, we can effectively lower the distribution costs to a fraction of a cent. Only through use of economies of scale can the podcast advertising be both cost effective to advertisers (you don’t want them priced out of the equation), and profitable to the podcaster himself.Got any thoughts? discuss!