Big quote: "U.S. podcast ad revenue grew 53% in 2018, according to the IAB, and with 32% of Americans (age 12+) having listened to a podcast in the past month, according to Edison Research, marketers and platforms are seeing untapped potential. Spotify is looking to entrench itself early to become a leading platform in the sector."
Spotify has announced that it now allows advertisers to target their ads toward specific podcast listeners. Previously campaigns had to focus on playlists and genres for directed marketing, which can be somewhat generic. The new tools allow sellers to seek much more relevant audiences since podcasts tend to have more specific content.
Spotify’s recent interface redesign shows the company's interest in making its podcast-related acquisitions of Anchor and Gimlet Media pay off. Targeting listeners by noting their podcast interests may prove more lucrative than those based only on music preferences. For example, finding products to point toward listeners of a tech podcasts is going to much more straightforward than basing ads for those who like Nirvana songs.
“Over time, we aspire to develop a more robust advertising solution for podcasts that will allow us to layer in the kind of targeting, measurement, and reporting capabilities we have for ads that run alongside other content experiences like music and video,” a spokesperson said in a statement.
"[Marketers will] be able to narrow their campaigns to certain podcast categories, such as 'Comedy,' 'Lifestyle & Health' and 'Business & Technology.'"
As of today, the targeted advertising is available in 10 regions, including France, Germany, Italy, Spain, Brazil, Mexico, Australia, Canada, the UK, and the US. The changes will not affect premium users.
As far as how the advertising will work, Spotify says that nothing will change for free users other than the ads being more tailored to their interests. The spots will still only appear between songs and will not be inserted into or over podcasts (except for the already existing mid-roll ads), which is a smart move.
Podcasts typically have their own sponsors with ads embedded within each episode. Adding another layer of advertising would likely drive podcast listeners to other platforms, which is the last thing Spotify wants.
Ultimately free listeners will only notice ads becoming more specific to their interests. Frequency and method of delivery will not change.