As Spotify ‘Wraps’ the decade, it reveals the payoff from podcast investments
Spotify, the global music audio streaming service, each year unpacks the listening habits of users and unveils the artists and trends shaping the industry with its ‘Wrapped’ campaign. The data revealed the increasingly important role that podcasts are clearly taking in the business.
On Thursday 5 December, Spotify summed up the listening habits of some 248 million listeners
On Thursday 5 December, Spotify summed up the listening habits of some 248 million listeners. For 2019, Post Malone (6.5bn streams) was the most-streamed artist, followed by Billie Eilish and Ariana Grande. For the decade, Bohemian Rhapsody was the most popular album. Drake was most popular artist with 28bn streams, followed by Post Malone, Ariana Grande and Eminem.
The most interesting data shared by Spotify described the growth exhibited by its podcast business.
Spotify said it now has more than 500,000 podcast titles available and its podcast listeners have grown by more than 50% since the start of 2019. It has seen a 39% increase in podcast hours consumed by listeners quarter over quarter. The Joe Budden Podcast with Rory and Mal, which was the most consumed podcast, globally this year. Comedy, Society & Culture, True Crime, News, and Health & Fitness were the most consumed podcast genres of the year.
In preparation for this boom, Spotify went out on an acquisition spree. Early in 2019 Spotify acquired podcast owner Gimlet and production tool Anchor. Reports claimed it had put down $300m on the properties. Months later, Parcast, the crime, mystery and sci-fi producer joined the fold bringing spend to around $400m.
At the time, Daniel Ek, Spotify co-founder and chief executive, said it was to set to “become both the premier producer of podcasts and the leading platform for podcast creators”.
Meghan Keaney Anderson, vice-president of marketing for HubSpot, wrote in The Drum that the podcast advertising game was due for disruption and could offer an easier-to-use ad network, with access to a range of shows and price points.
With 75% of UK marketers looking to up spend in podcasts, Spotify is in prime position to monetise. Of course, on the Premium tier, listeners should be ad-free, but it can reach more than 100 million free listeners.
In April, Kantar predicted that Spotify may struggle to monetise its podcasts. It may face troubles in running ads on podcasts with an April study from Kantar AdReaction claiming that they are received by audiences more negatively than other ad formats. It ranked podcast ads a net positive score of -9 globally vs +43 for top scorer magazine ads. It also lagged behind out of home ads (+42), TV ads (+32), radio ads (+27) but ahead of mobile display (-11) and mobile video (-13).
Jane Ostler, global head of media at Kantar’s Insights division, marked the format's growing appeal nonetheless, claiming that podcast ads are “becoming increasingly embedded in consumer and business marketing” due to the ease of handpicking audiences and serving relevant and tonally appropriate content.
Taking this one step further in June, Spotify let advertisers target podcast listeners directly and changed its UI to help users find their favourite shows. Previously audiences were only broken down by music streaming habits. Samsung and 3M were among the first brands to test the tool. It has since made the targeting even more granular.
But Spotify hasn't stopped building out its content library. It has Barack and Michelle Obama on board to co-produce podcasts exclusively for the platform. In the last month, it has also partnered with BBC Studios and P&G to further populate with podcasts.
The Drum has collated the major 2019 audio advertising trends, in which Spotify and its podcast strategy plays a vital role.