Spotify’s podcast ad tools will be applied to music soon enough, execs say

During Spotify’s investor day this week, execs shed some light on their plans for the audio giant’s advertising business as it grows beyond music.

It’s no secret that in recent years, Spotify has dedicated more money and resources to podcasts, which brought in close to $215 million in revenue last year. That effort is “still largely in investment mode and not yet profitable,” said CEO Daniel Ek.

Reverse Uno: Nevertheless, in some regards, Spotify’s podcast advertising tools are actually leading the way for music.

• Take Podsights, the podcast ad-measurement company Spotify acquired earlier this year—making some waves in the industry.
• “Long-term, we intend to extend Podsights’s capabilities beyond podcasts to music,” said Spotify Chief Content and Advertising Business Officer Dawn Ostroff.
• Applying Podsights’s tech to music would be “a big step towards Spotify’s walled-garden approach being a necessary part of all audio campaigns,” Bryan Barletta, founder of podcast ad-tech publication Sounds Profitable, told Marketing Brew.

Another one: The Spotify Audience Network, or SPAN, is going a similar route. The network debuted more than a year ago to connect advertisers with podcasters, leveraging Spotify’s listener data to target campaigns across shows.

Spotify plans to add music inventory to that network in the future, Ostroff said.

• “I’m honestly a bit surprised it’s taken them this long to include music inventory in SPAN, considering the idea behind audience networks is to hit people wherever they’re consuming audio content,” said Jacob Schwartz, associate media director for national audio investments at Mediahub.
• Jeff Umbro, founder and CEO of podcast distribution and monetization company The Podglomorate, said while this “is a great business decision…the jury’s out on how effective the ads will be,” in that the same ad could have less of an impact on listeners between songs than it might in a podcast.
• James Ingrassia, EVP of client service at audio ad agency Oxford Road, who currently uses SPAN on behalf of some clients, said he’d be interested in testing this potential new approach as long as CPMs remain cost-effective.—AM