Spotify Introduces Podcast Ad Targeting

AP Photo/Richard Drew

The streaming service will be able to provide data around podcast ad effectiveness.

Spotify is introducing new podcast advertising technology that the company touts as helping producers and brands better track the performance of the spots that air during audio shows on its platform.

Through a product Spotify is calling Streaming Ad Insertion, the company will be able to insert more targeted advertising into podcasts in real time. That technology will power Spotify Podcast Ads, which executives, speaking on a panel during the CES technology conference, said will provide data around ad impressions, ad frequency and audience insights.

The technology will roll out with Spotify’s original and exclusive podcasts but content chief Dawn Ostroff, who assumed leadership of the advertising business after the departure of CFO Barry McCarthy, said “this is just the beginning.”

Podcasts typically monetize through host-read ads. While dynamic insertion has allowed companies to switch out the ads that air during a specific show, the industry has still struggled with a lack of data around the effectiveness of those spots. That’s because many listeners download podcasts onto their mobile devices, which makes it hard to track whether they later listened to the show. Spotify, however, allows for podcast streaming, which can make it easier to track listening habits.  

Bre Rossetti, executive vp at Puma agency Havas, told CES attendees that as an early tester of Spotify’s podcast advertising technology on the Jemele Hill series Unbothered, the company saw a 180 percent list in ad recall. “This is really needed in the industry right now,” she said, adding that despite the amount of time spent listening to podcasts, “the ad dollars haven’t yet followed. That’s because the products don’t exist for us to feel confident putting our dollars in. You don’t get the measurement, you don’t have the targeting, we don’t have that precision. This type of product can help unlock that.”

Spotify’s podcast ad tech will allow brands to target based on age, gender and location as well as interest segments.

Podcasting and nonmusic audio programming have become a focus area for Spotify as it looks to expand beyond its music streaming roots. In 2019, the company spent around $400 million to acquire podcast producers Gimlet and Parcast and technology provider Anchor. The company is riding a wave of growth in podcasting as the industry grows to an expected $1 billion in ad revenue by 2021, per the Interactive Advertising Bureau.