Spotify is to monetize its newly won podcast audience with the launch of Spotify Audience Network, an audio advertising marketplace where advertisers can reach listeners across ad-supported music and premium podcasts – including those hosted on Spotify-owned Megaphone and Anchor.
Spotify is in a podcast honeymoon phase, with testing already underway to introduce the format on its self-serve ad platform Spotify Ad Studio, starting with Spotify Originals and Exclusives for US advertisers.
Spotify doubles down on podcasts
Spotify Audience Network will hand advertisers the opportunity to “reach and target audiences at scale, both on and off Spotify“, according to chief content and advertising business officer Dawn Ostroff.
These lofty aims are not yet backed up by a hard breakdown of precisely how the system will work, with the audio streamer issuing only a vague statement that it is in the ‘early stages of developing the offering‘.
Spotify has high hopes for its fledgling network, hyping it as a ‘game changer‘ for the business as it seeks to monetize hard-won podcast audiences by enabling advertisers to reach Spotify‘s audience of hundreds of millions of listeners.
During an address to the advertising community, Spotify also referenced its recent purchase of dedicated podcast monetization and publishing platform Megaphone last November, which would allow it to turbocharge its own Streaming Ad Insertion (SAI) technology.
Launched in 2020, SAI is now in use across North America, Germany and the UK, with plans to bring the technology to additional markets later this year.
As part of this process, Spotify is simplifying podcast advertising with Spotify Ad Studio, a self-serve platform for advertisers of all sizes. It has been beta testing in the US since 2020.
Cumulatively, this trifecta of technology solutions aims to prise open advertiser wallets with the promise of lending them the ear of listeners.
Why it matters
The podcast industry is booming, with the number of British listeners doubling in the past year alone to account for a quarter of all adults every week, of whom 79% tune in via a mobile device.
Spotify credits its recent success of adding 74 million subscribers (a record 30 million of them paying) in 2020 to riding the crest of this wave.
Hungry for more, Spotify has splashed the cash on a succession of content deals to bring high-profile podcasts its way, including the Obamas, comedian Joe Rogan and a criminal justice podcast with Kim Kardashian West.
Spotify first embarked on its podcast journey as early as 2019 with its acquisitions of Gimlet, Anchor and Parcast. This early embrace has propelled it to the forefront of today‘s market, reinforced by a well-established listener base.