Spotify announces ad network in push to monetize the audio-only market
At virtual event, audio giant reveals new podcasts and ad tools.
Spotify announced a new advertising marketplace -- the Spotify Audience Network -- that will allow brands to tap into the streaming giant’s audience of audio consumers. The company provided an update during its "Stream On" event today, it's first such event since 2018.
The Spotify Audience Network will include podcasts, ad-supported music, and Spotify originals and exclusives with the goal of becoming a one-stop audio shop.
“For the first time, audio creation, consumption and monetization is taking place in the same place," says Jay Richman, VP, head of global ads business and platform at Spotify. “Today’s announcement is about assembling all the pieces into one place.”
The Audience Network will combine Spotify’s audience inventory generated from music, exclusive shows with monetization independent podcasts on its platform Anchor, and Megaphone, its publishing and ad platform for enterprise publishers.
Richman says advertisers will be able to reach listeners at scale, both on and off Spotify. “If there’s someone interested in personal finance, we can find them across disparate sources, for instance Megaphone audiences or Spotify audiences,” says Richman. Last year, Spotify acquired Megaphone, and in 2019 purchased Anchor. Spotify says the Audience Network is in the early stages of development and that the company will share more information in the coming months.
The streaming giant is also upgrading its existing streaming ad insertion technology, which can serve audiences targeted ads, to now include audience-based buying, native ad placements, and creative performance reporting. The technology, previously available only to original and exclusive shows, will become available to Megaphone podcast publishers and Anchor creators globally later in the year.
Spotify is also upgrading its existing Spotify Ad Studio to support podcast ad buying through a beta test in the U.S. The ad studio will now be accessible to “advertisers of all sizes,” and will let advertisers connect in more ways with listeners at scale, according to a company statement.
The company said the news was spurred by an explosion in podcast listeners and what Spotify calls a “natural lag” in monetization of a new technology. “We saw it in mobile, saw it in video,” says Richman. “Video is probably the best most recent example of something that’s reached equilibrium in digital ad spend, and now it’s the time for audio.”
Spotify also made several other announcements during its “Stream On” event, including a new premium audio streaming option called Spotify HiFi and a collaboration with WordPress that can turn written content into a podcast. It also unveiled a new podcast from President Barack Obama and Bruce Springsteen.
“We see a huge opportunity [in audio], going up not just against radio buyers of the world, but digital buyers like Facebook, Google and Twitter. We see our place rightfully alongside those giants with an audio-first strategy,” Richman says.