Monetize Your Facebook Live Videos (Via Sponsorship)
Monetize Facebook Live Videos via Sponsorship
Facebook Live is the new marketing black. Forget those gorgeously shot, highly produced videos of yester ( read: last) year. In-the-moment streams are where it’s at when it comes to nurturing community, engaging with consumers, and promoting anything from personality to product to an audience that cares about what you have to share.
I started using the “live” function on Facebook the first day it was offered via their Facebook Mentions App in beta form to verified (those folks with the little checkmark by their names) users. That was a year and a half ago, and since then I’ve integrated the capability as a major part of my business plan.
In addition to the occasional one-off videos, I also produce a weekly live stream called, Ask Me Monday. As a tv show host/producer it was an easy transition for me to treat the weekly stream as a (rudimentary) tv series. As long as there was consistency in original air time, a general theme, and a name then people would follow it as they would any other series. As the host of a podcast, I saw the monetization opportunity parallels between the two mediums. After several months of experimenting I began applying a method commonly used amongst podcasters for sponsorship, and have since found it to be a success model for Facebook Live streams as well. With a few minor tweaks, I came up with a plan. Since sharing is caring, it’s time I pass along what I’ve learned (so far.) So, stream-y friends, let’s talk sponsorship!
Different Types of Sponsorships
Here’s the sponsorship breakdown.
1.) Product Only: Trade with companies. Your” face time” in exchange for their products.
$0 cash exchange, but potential option for high-dollar items that are worthwhile for your business. This is also a good option if you don’t currently have a consistent video schedule.
2.) Package Deal: Incorporate live video(s) as a feature (or perk) of a larger deal.
For example, if you’re courting a company to pay you a regular payment of $X/month, and need to line item several things (blog posts, social media coverage, tutorial, etc.) to make it worth it for them, then live video will sweeten the deal. Live streaming is a hot-topic marketing term right now, so use it! This option can, but does not have to be tied to a regular video schedule. You may choose to offer X amount of live videos as part of the deal, vs. specific episodes on a regular schedule.
3.) Flat Rate: Sole sponsorship offer to one company for a specific amount of time (ie. 1 quarter, 6 months, year, etc.). This rate would be based on viewership (see formula below) PLUS an exclusivity fee (there’s value in being the sole sponsor, but also the broadcaster should get a bump for taking him or herself off the market for other sponsorships during that term, even if his/her viewer numbers rise.)
4.) Episode Sponsorship: Rate-based structure on a per episode basis (with or without a discount for multi-episode sponsorship.)
Over the past 18 months, I have used Options 2, 3 & 4. The latter, however is where there is the most room for financial growth. As you nurture your audience, gain a following, and invest in “Boost”ing videos you’ll see your numbers S-L-O-W-L-Y, but surely rise. With more viewership, you can charge more money. How’s that, you ask? Well, there’s a formula. Ok, there isn’t a formula specifically for live streaming, but as I mentioned above there is one for podcasting. That’s the one I use for my, Ask Me Monday Facebook Live stream. Podcast sponsorship is based on CPM (cost per mile, which for whatever reason means, 1,000 listeners/viewers.) Instead of counting each individual viewer, marketers will round up or down to the nearest thousand (or fraction thereof) and pay a rate for each 1000 (rounded up to .25 or .5.) The going rate scale is between *$20-$50 CPM. To figure out where on that scale your broadcast would fall, I’d refer to your Facebook follower numbers, then go from there. This is a bit of a grey area because X number may be a big deal for the Mom & Pop craft store you’re pitching to, but pitiful in the eyes of the Fortune 500 company you hope to woo. Like anything else be honest with yourself about your value, and know your audience.
*If you work with a marketing hive group, the rate will be lower as their business is bulk. It may or may not be worth it for you to go with that option. I usually only go this route if I haven’t secured full price sponsorship for the episode.
THE EPISODE SPONSORSHIP BREAKDOWN
For the purposes of this article, let’s just work under the assumption that prospective sponsors are all in the craft industry. Let’s say that you have 80k followers. Solid! Not mind blowing, but respectable. Based on that assumption let’s also say that you feel comfortable asking for a $35 CPM fee. What now, though? Just do the math!
RATE FORMULA: Rate x CMP Average = Episode Rate
Now that you know your rate, here are some options of how to serve it up to perspective clients.
Pay for What They Get
Do you wait to quote the company the total until you see how many views occur over a 1-2 week period? You could, although getting a marketing exec to approve a number that doesn’t exist yet would be a feat unto itself.
How about guaranteeing a number of views and quote on that? Eek, that’s risky. Facebook algorithms are one of the great mysteries of life, and they change frequently. You really won’t know how much reach your video will have (even if you “Boost”, which you should, that’s only an estimated reach. Facebook is under no obligation to deliver on the maximum reach suggested at the rate you’re boosting for.)
“Over achiever” is probably a term that’s been used on many people taking the time to read this article, so aiming for “average” is tough. It’s also smart. That is, basing your rate on the average number of viewers your videos receive. By telling your sponsor you average X amount of views (based on at least 3-6 past live streams), it does not guarantee that number of views for their video. It simply states that it’s the average for which they’re paying on. If their video gets less views, you still get the same amount. If it gets more, you still get the same amount. It’s a safety net for all. Not to worry, though. As I mentioned earlier, this net is one that can grow…and relatively quickly. The key is: consistency and knowing your numbers, then making those numbers work for you. What that means is that if you know your viewer average breakdown for “All Time”, “Year to Date” and “Quarterly”, then you can see which number looks the most favorable and quote from there. This may ebb and flow. If you have a great quarter (as I did for Q3 in 2016), then you might want to quote on that. If you had a lesser quarter (as I did for Q2), then you’d avoid that. I actually recommend avoiding quoting off of either of those, though because one means less money, and the other means you have to hustle your arse off to make sure you meet that goal again. We do enough hustling as independent contractors. We should be kind to ourselves. How? Look at all of the numbers, then go with your gut. Ok, this is where I get number-y. Here’s a hypothetical breakdown of a fictional live stream series I’m calling, Facebook Live Fantasma (FLF)!
FACEBOOK LIVE FANTASMA BREAKDOWN
–All Time Views: 172, 925 over 25 total episodes.
All Time AVERAGE: 6,918 views
If the FLF host based his/her rate on All Time Views based on a CPM rate of say, $35 then the math would look like this:
$35 x 7 (rounded up from 6.9k) = $245 per episode/sponsor
–Year to Date Views (YTD): 60,739 views over 7 episodes.
YTD Average: 8, 677 views
$35 x 8.5 (rounded down — if you’re being conservative– from 8.6k) = $297.50 per episode/sponsor
–Quarter (3 month period) Views: 100, 025 views over 10 episodes.
Q Average: 10, 002 views
$35 x 10 = $350 per episode/sponsor
Looking at these numbers, I’d probably recommend that the FLF host charge the YTD rate. The quarter average is significantly higher than the other calculated averages, so it’d be risky to attempt to replicate that average for the following quarter. We don’t need that kind of stress, people. Conversely, the All Time Rate is a number that seems pretty easy to hit, so YTD seems like a happy medium.
Ok, there you go. That’s how I run financials on the live streaming portion of my business. I hope it’s helpful info for those of you considering taking the plunge into the Facebook Live frontier!
Sponsor My Facebook Live Series
If you’re interested in partnering with me on a Facebook Live video for your product or business, go here to nab a spot!
More on Crafty Monetization
If you’re starting a new, craft-based business and would like more info on earning money from it, then check out my CreativeLive course, Monetize Your Craft.
Happy creative marketing!