Rewriting the playbook for podcast advertising
Over the past few years we’ve seen podcasts evolve from a niche form of media into a mainstream activity that captures the valuable time and attention of consumers. According to Edison Research, over a third of Americans now listen to podcasts, and the most engaged among them are listening to more than 7 podcasts per week. 1
We’ve seen first hand that podcasts are a uniquely effective environment: 41% of listeners say they trust ads more if they hear them in a podcast and 81% report having taken action after hearing a podcast ad.2 However, a lack of clear and equivalent measurement has prevented podcast advertising from truly taking off like its digital media counterparts. Today, despite being a digital medium, the podcast industry measures audience, reach, and impact much like you would a full-page ad in a magazine. Advertisers generally have a sense for who they're reaching, based on survey data and the magazine's target audience. Total circulation measures the number of doorsteps that the issue hits, but there's no precise data on how many readers actually opened the magazine, let alone reached or acted on the ad.
Until now, podcast advertising has experienced many of these same challenges because the medium is still largely downloaded via RSS feeds. But the shift in consumption from downloads to streaming has opened the door for advances in data-driven podcast advertising, and here at Spotify, we’re moving beyond these constraints to reimagine what's possible for this uniquely powerful and intimate medium.
Introducing: Spotify Podcast Ads.
With a direct connection to millions of podcast listeners, best-in-class content, and a robust monetization platform, Spotify is uniquely positioned to make podcasts addressable for digital advertisers. Spotify Podcast Ads are powered by Streaming Ad Insertion (SAI), which leverages streaming to deliver Spotify’s full digital suite of planning, reporting, and measurement capabilities. Spotify Podcast Ads offer the intimacy and quality of traditional podcast ads with the precision and transparency of modern-day digital marketing.
Here are some of the areas we’re exploring:
- Reach the audience you want to reach
To date, podcast advertisers have had to rely on audience surveys or inferences about the podcast’s content to figure out where to allocate their podcast ad budgets. Spotify Podcasts Ads reach a logged-in user base of millions of listeners. We provide data-driven recommendations and insights to help you reach the right audience.
- Deliver your ads with confidence
In 2016, the IAB unified measurement of "ad delivery" across the industry,3 but due to the distributed, downloaded nature of podcasting, the new guidelines could not tell advertisers whether listeners actually heard their ads. Spotify Podcast Ads measure real impressions as they occur, reporting on the age, gender, device type, and listening behavior of the audience reached.
- Understand the impact of your investment
Without knowing who actually heard an ad, podcast advertisers have largely been unable to measure the impact of their podcast advertising through typical digital media practices like brand lift studies or conversion reporting. To date, podcast advertisers have found creative ways to directionally indicate whether their ads resonated through tactics like coupon codes and vanity URLs. With Spotify Podcast Ads, we will be able to tap into our suite of digital measurement capabilities to learn more about how people perceive your brand and take action after hearing your ad.
As you might guess, all of this makes for a vastly improved podcast advertising experience. Which is a huge win for brands. As Joel Withrow, Sr. Product Manager of Podcast Monetization at Spotify says, "In the past five years, podcasts have become a staple of pop culture. In that time, I've spoken to a lot of skeptical brands, and the conversation consistently begins and ends with measurement. I’m excited to continue evolving the medium at Spotify. With our trusted, logged in audience, we can finally prove out the effectiveness of podcasts with the data and insights that digital advertisers expect." Before coming to Spotify, Withrow played a key role in launching Megaphone in 2014, which popularized Dynamic Ad Insertion ("DAI") with leading podcast publishers like the Wall Street Journal and Gimlet Media.
One brand that has jumped on board is Puma—it was among our first partners to alpha test Spotify Podcast Ads powered by Streaming Ad Insertion (SAI). By teaming up with Jemele Hill, the host of Spotify original podcast Jemele Hill Is Unbothered, the iconic footwear brand drove ad recall lift of 18 points.4
“Podcasts have long been a highly compelling advertising environment, but we’ve been hesitant to dive in given the medium’s well-known limitations,” says Gabrielle Rossetti, Executive Vice President of Strategy at Havas Media. “Naturally, we were eager to test Spotify’s new podcast ad tech and have an influencer like Jemele endorse our new line of sneakers the Clyde Hardwood. We’re excited to continue partnering with Spotify to push the boundaries of podcasts.”
This launch opens up endless possibilities for podcast advertising. So keep listening. We’re just getting started.