Spotify Is Becoming a Podcast Ad Network

As we’ve covered previously, Spotify are really the player in podcasting along with Apple. 

They’ve been pushing aggressively into the format throughout 2019, and have already started 2020 with a bang by announcing Streaming Ad Insertion for podcasts.

According to Spotify, the new tools solve a problem that has been limiting the revenue potential of the podcast space for some time. That problem is:

“A lack of clear and equivalent measurement has prevented podcast advertising from truly taking off like its digital media counterparts

Up to now, the podcast industry has measured audience, reach and impact like the traditional print media.

Advertisers know roughly who they’re reaching, and how many they’re reaching – but there’s very little exact data on impressions and conversions. Insight is generally sought by relying on promo codes, unique URLs and such. 

The reason for this is that the podcast listening experience, since its inception, has been largely dependent on downloads via RSS feeds. However, recently there has been a marked shift toward streaming, which Spotify thinks has:

“Opened the door for advances in data-driven podcast advertising….. We’re moving beyond these constraints to reimagine what’s possible for this uniquely powerful and intimate medium”

Is it uniquely powerful and intimate? It seems so:

“We’ve seen first hand that podcasts are a uniquely effective environment: 41% of listeners say they trust ads more if they hear them in a podcast and 81% report having taken action after hearing a podcast ad”

Spotify is wonderfully positioned to seize the initiative in modernizing and optimizing podcast advertising.

They know a lot about their listeners through their sign up process and also by leveraging what they know about user music tastes. The fact that they’re primarily a streaming platform also gives them the opportunity for ad insertion and tracking how users interact with the ads. 

While podcast advertising is currently rather primitive compared with the wider digital ecosystem:

“Spotify Podcast Ads offer the intimacy and quality of traditional podcast ads with the precision and transparency of modern-day digital marketing”

Spotify already dynamically inserts ads into its music streaming, serving different ads to different users based on data about their age, device, tastes, location and other factors.

This tech is getting updated and applied to podcasts too, so for the first time two people can be listening to the exact same podcast episode and get very different ads. 

Some key areas being explored through Streaming Ad Insertion are:

Targeting

Instead of relying on educated guesses and audience surveys, Spotify’s new platform will provide “data-driven recommendations and insights to help you reach the right audience” gleaned from their data on millions of logged-in listeners.

Measuring Reach

Advertisers have been struggling to know how many people actually listened to their ads. Spotify’s new offering will measure “real impressions as they occur, reporting on the age, gender, device type, and listening behavior of the audience reached”

Understanding impact

Spotify will be leveraging a host of digital measurement capabilities to “learn more about how people perceive your brand and take action after hearing your ad”.

The launch is pretty interesting and exciting, and gives a hint at the direction that both Spotify and the podcast space are moving toward.

They are positioning themselves as the center of gravity for the whole podcast world- and it could pay off for them big time. This is surely a story to watch!

Written by
Thomas Goss

I'm MobiLoud's marketing manager.

I write about media trends and business models - and host the Digital Media Growth Podcast, where I interview fascinating people from the world of digital publishing.

When I have time I like reading, skiing, fitness, cooking and learning languages.

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