Spotify to Acquire Podcast Advertising Platform Megaphone

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The streaming music giant will pay $235 million in the deal, according to a source familiar with the terms.

Spotify has agreed to acquire podcast advertising and publishing platform Megaphone in a deal that could significantly significantly expand its targeted ad business.

The music streaming giant is paying $235 million for Megaphone, according to a source familiar with the terms, making this one of its largest acquisitions in the podcast space to date.

Founded in 2015, Megaphone provides podcasters with the tools to monetize their work through a technology called dynamic ad insertion that allows targeted and personalized ads to be swapped in and out of shows. The company says on its website that it works with some 20,000 publishers and advertisers, including Spotify and studio division Gimlet.

Spotify, which since investing in the podcast space a few years ago has amassed a library of 1.9 million audio-first titles, has been investing in advertising technology for the medium for some time. In January, it announced a new technology called Streaming Ad Insertion, where it could use targeted data about its 320 million users to serve them personalized advertisements while they listen to Spotify exclusive podcasts. Through its acquisition of Megaphone, Spotify will make that Streaming Ad Insertion technology available to third-party podcast publishers for the first time. Advertisers that want to expand the audience they reach on Spotify's original and exclusive podcasts, meanwhile, will be able to do so using Megaphone's Targeted Marketplace product.

"We are still in the early chapters of the streaming audio industry story, but it is absolutely clear that the potential is significant," Dawn Ostroff, Spotify's chief content & advertising business officer, said in a statement. "We look forward to Megaphone joining Spotify on our mission to accelerate smarter podcast monetization for advertisers and podcast publishers powered by a scaled audience and state-of-the-art technology."

Megaphone is the latest in a string of podcast acquisitions at Spotify. Since 2018, when the company first began investing in non-music audio programming, it has spent more than half a billion dollars on podcast studios Gimlet, Parcast and The Ringer and technology providers Anchor. The deals have sparked a frenzy of M&A activity in the podcast industry. In July, SiriusXM agreed to buy podcast platform Stitcher for $325 million. Studio Wondery, meanwhile, is currently on the market, according to a source familiar with the matter.

"We are incredibly excited to join Spotify to help advance the podcast medium for publishers and advertisers alike," said Megaphone CEO Brendan Monaghan. "We believe that Megaphone and Spotify’s shared value in innovation will drive the podcast ecosystem forward around the world."