January 21, 2020
During CES 2020, Spotify revealed plans to leverage its massive amount of user data in order to introduce targeted advertising in its exclusive podcast content. With its proprietary Streaming Ad Insertion (SAI) tech, Spotify will analyze data based on user location, type of device, gender, age and more to insert advertisements in real time (Spotify already automates dynamic ad insertion for its music streaming). The company could eventually become a major podcast ad network if it ends up placing ads in other networks’ content as well.
Spotify has already hinted that it may apply the technology beyond its own exclusive content. “This is just the beginning,” said chief content officer Dawn Ostroff.
“That means it’s possible the company will take on big ad networks, like Midroll, to sell ads for other shows and share in the revenue,” reports The Verge. “Either way, Spotify is positioning itself to become the center of the podcast universe.”
Spotify is presently in a unique position since podcasting is experiencing significant growth, targeted advertising in the space is still new, and the company has more user data than most competing podcast players such as Apple and Google, “partially because of its sign-up process, and also because of its knowledge about users’ music taste.”
“In previous years, podcasts have been delivered by way of downloads from RSS feeds, which would make this sort of data collection difficult if not impossible,” TechCrunch explains. “The shift to streaming changes that, as Spotify can tap into its suite of planning, reporting and measurement capabilities, as it does for streaming music.”
“The problem we’re solving with Spotify podcast ads is really on the advertiser’s side — advertisers have no idea how their ads are working,” said Spotify advertising VP Jay Richman at CES. “They don’t even know whether or not an ad they purchase is being consumed by a listener.” Richman described the tech as a “first of its kind.”
Brands that opt to use the new tech would “receive more detailed data than they would from a typical podcast ad,” notes The Verge. “That includes the number of times listeners heard an ad, the ad’s reach, and anonymized audience insight.”
“It introduces new targeting measurements and interactivity, which is a big step change for the industry,” said Richman.
The Streaming Wars Come to CES: Quibi and Spotify Both Had Big Announcements, The Verge, 1/9/20
Lele Pons, Paul Feig and Spotify’s Dawn Ostroff Talk Comedic Potential of Podcasts, Variety, 1/8/20