We have officially reached a critical inflection point for digital audio.

In 2019, Americans, for the first time ever, spent more time on their mobile devices than they did watching television.¹ And, in 2020, audio was the No.1 activity on mobile, outpacing stalwarts like social, video, and gaming.² Podcasts have been at the center of audio’s renaissance and today reach over 100 million Americans³ for over 40 minutes per day.⁴

Over the past year, we doubled down on our commitment to become the world's leading audio platform. We introduced Streaming Ad Insertion (SAI), an industry-changing podcast ad technology that unlocks digital planning, reporting, and measurement for advertisers. We acquired Megaphone, a leading podcast advertising and publishing platform. We made strides to reimagine the audio experience with innovations like Video Podcasts and Music + Talk. And we continued to invest in content with the acquisition of The Ringer and exclusive partnerships with some of the world’s most influential voices including President Barack Obama and First Lady Michelle Obama and Joe Rogan. Spotify is now home to over 2.2 million podcasts.⁵

Today’s Stream On announcements represent the next step in driving growth for the audio and podcast industry at large. Read on to learn how we got to this point—and what the future holds for podcast advertising.

Introducing: Spotify Audience Network

In February 2019, we acquired a leading podcast creator platform in Anchor. With Anchor, the path to audio creation was reimagined — the platform is now powering over 80% of all new podcasts on Spotify, totaling over 1 million podcasts in 2020.⁶ In December 2020, we acquired Megaphone — the advertising and publishing platform of choice for enterprise podcast publishers like The Wall Street Journal and ViacomCBS. By combining these two world-class platforms with the power of Streaming Ad Insertion (SAI) and our catalog of Original and Exclusive content (Spotify Studios, The Ringer, Gimlet, Parcast, etc.), we will soon activate one of the world’s most scaled and sophisticated audio advertising marketplaces.

While title-based podcast buying remains an effective way to align with trusted voices, the podcast industry is still highly fragmented. This presents a significant challenge for advertisers who want to reach screenless audiences at scale and the vast majority of creators who want to earn more from their work. Want to reach new parents, tech early adopters, or foodies? You’ll have to connect with multiple different podcast publishers or creators, negotiate one by one, and work to land your message with the right audience at the right reach and frequency. Today, we are addressing this challenge with the introduction of the Spotify Audience Network.

The Spotify Audience Network is a first-of-its-kind audio advertising marketplace in which advertisers of all sizes will be able to connect with listeners consuming a broad range of content across Spotify Originals & Exclusives, podcasts from enterprise publishers via Megaphone, podcasts from emerging creators via Anchor, and ad-supported music. We’ll leverage our medium-defining technology to give advertisers the ability to reach our audience of hundreds of millions of listeners — at scale — both on and off Spotify. Through this offering, advertisers will be able to:

• Reach engaged audiences in screenless moments at scale on and off Spotify
• Leverage easy-to-use audience targeting tools to reach the audiences that matter most
• Explore advanced insights powered by Streaming Ad Insertion

All media available via the Spotify Audience Network will be addressable based on demographics (age, gender, and location) and audience segment (ex: fitness enthusiasts, gamers, luxury shoppers) with contextual targeting (ex: business & tech, lifestyle, gaming) coming later this year. We are in the early stages of developing this offering and look forward to sharing more in the coming months.

Modernizing podcast advertising

We have known for some time that podcasts are a uniquely effective ads environment: 41% of listeners say they trust ads more if they hear them during a podcast and 81% report that they have taken an action after hearing a podcast ad.⁷ However, there have been some fundamental challenges that have prevented advertisers from taking full advantage of this emerging medium.

Challenges for podcast advertisers:

• Inability to target audiences with precision at scale
• Limited insight and understanding of ad delivery and efficacy
• Barriers to entry (high CPMs, lack of self-service, etc.)

In 2020, we started addressing these key challenges head on with the launch of Streaming Ad Insertion (SAI). With SAI, we were able to finally deliver the intimacy and quality of traditional podcast advertising with the precision and transparency of modern-day digital marketing. SAI marked a huge step forward for podcast advertising—and over the past year, we have made it more widely available—extending SAI to nearly 100% of our US Original & Exclusive podcasts and expanding into the United Kingdom and Germany with more markets planned for later this year.

SAI’s 2021 product features:

• Confirmed Ad Impressions
• Audience-Based Buying [ALPHA]
• Streaming Insights
• Native Ad Placements [BETA]
• Creative Performance
• Third-Party Brand Lift Measurement

We have recently begun alpha testing audience-based buying. This new feature allows podcast advertisers to reach relevant audiences by leveraging our first-party data based on our logged-in audience. Audience-based buying is the No.1 way that advertisers want to buy podcasts today⁸ and we are excited to unlock this new way to buy later this year.

“During the launch of HBO Max, our strategy was to expand our reach and align with digital audio to find entertainment seekers. We turned to Spotify, given its audio-first strategy, scale and cutting-edge technology, to address both of these key pillars,” noted Katie Soo, Senior Vice President, Growth Marketing at HBO Max. “Our early campaigns have been successful, and we plan to continue partnering with Spotify to explore what’s possible in this growing medium.”

We are also pleased to share that we will soon be extending SAI beyond our Original & Exclusive podcasts to opted-in podcasters across both our Megaphone and Anchor platforms. This will help podcast publishers and creators earn more from their work and extend the potential reach for our advertisers through the Spotify Audience Network.

Making podcast advertising available to all advertisers

Finally, it’s incredibly important to us that podcast advertising is made available to businesses of all sizes. That’s why we’re so excited to announce that podcast advertising is coming to our self-service platform Spotify Ad Studio.

By using Spotify Ad Studio, advertisers can tap into the Spotify Audience Network, reaching their target audience by demographic (age, gender, or location) or interest segment (ex: cooking or fitness). For example, a local university could run ads about their upcoming information session, targeting listeners by geography and across relevant age groups as they listen to podcasts and music.

With a direct connection to listeners and creators, Spotify can now help advertisers of all sizes take full advantage of podcasts. The future of podcast advertising is here—one that is addressable, scalable, and insights-rich, delivering greater results for advertisers and greater value for creators. Reach out to your Spotify client partner to learn more about how your business or brand can be part of the future of podcast advertising.