News & Insights

The future of digital audio advertising is interactive

Spotify is breaking new ground in the world of interactive audio, with fewer barriers to entry for creators, more engaging features for users, and more paths to success for advertisers. Learn more about what this means for podcast advertisers.

An audience of listeners is a powerful thing. Our research shows that people are more engaged and attentive when listening on Spotify compared to other forms of media — both to the music and podcasts they’re streaming, and the ads they hear. A recent survey found that consumer receptivity to ads on music streaming services and podcasts both increased last year.1

For years, we’ve known that attention and engagement on Spotify is great for advertisers, especially when it comes to objectives like awareness, consideration, and purchase intent. But what about conversion? The barrier, of course, is that audio is typically a one-way street: Creators create, and listeners listen. And those listeners tune in across a variety of moments, many of which we know to be screenless. Let’s say a listener hears a compelling podcast ad while they’re running on the treadmill or making lunch, for example. It’s not necessarily easy to remember the promo code or URL you just heard, and it’s likely not convenient to stop what you’re doing to type all of that into your device.

That is, until now. At Spotify, we believe that the future of digital audio — including advertising — is interactive. That’s why we’ve introduced CTA cards: visual, clickable companions to audio ads on Spotify. Here’s what that means for advertisers.

Podcast advertising 101

What’s driving this new era of digital audio? The podcast revolution.

Over the last few years, the podcast medium has exploded with an increasing share of audiences’ attention. People in the U.S. now spend over 45 each day on average listening to podcasts.2 That increased consumption has been fueled by a rise in podcast creation: In 2021, more than 1M new podcasts were added to Spotify, representing nearly a third of our overall podcast catalog (3.2M podcasts).3 With this boom in consumption, we’ve doubled down on the medium and ways for creators to connect with listeners. From Video Podcasts to Q&As and Polls, Spotify is constantly working on new features to make podcasts more interactive and more fun. And now, we’re excited to bring that same innovation to the audio advertising experience across podcasts. The future of digital audio is interactive, and it starts with an important first step: making podcast ads clickable.

But first, a bit of history. Podcasts came onto the scene nearly two decades ago. In the early days, podcasters began monetizing their content by simply recording their ad reads directly into the audio file for a specific podcast episode – these became known as “baked-in” or “burned-in” ads. The rollout of Dynamic Ad Insertion (DAI) in 2013 was a big step forward for podcast ad tech: advertisers were now able to target and serve different ad creatives to different listeners, and scale their ads across multiple episodes or podcasts. Still, DAI had its drawbacks, namely that measurement is limited to downloads. Additionally, marketers were looking for more opportunities to reach and influence listeners. However, whether an ad is baked-in or served via DAI, it looks no different to the consumer. There’s no visual cue that an ad is playing, and there isn’t a convenient way for listeners to take action.

Podcast ads and the rise of streaming audio

The global shift in consumption from downloads to streaming has opened the door for advances in more data-driven podcast advertising. As the world’s most popular audio streaming service, Spotify is uniquely positioned to drive innovation for podcast advertising.

When Spotify launched Streaming Ad Insertion (SAI) in 2020, we introduced impression-level insight to podcast advertising for the very first time. Rather than relying on download data, advertisers now have access to standard digital reporting like impressions, unique reach, and frequency, along with unique audience insights and creative performance metrics powered by Spotify’s first-party data.

We’re essentially taking all that’s great with podcast ads today and adding real-time targeting, measurement, and interactivity to them.

Jay Richman

Spotify VP, Head of Global Ads Business and Platform

SAI also introduced a few subtle updates to Spotify’s podcast ad experience. First, as soon as the ad begins playing, the business’s name appears on the Spotify app – actually showing who’s running ads in the episode. In addition, the episode’s scrubber automatically resets to the length of the ad creative, giving the listener a quick understanding of how long the ad break will be.

With SAI, our goal was to pair a more insights-rich experience for advertisers with a better user experience for Spotify listeners. Now, we’re excited to share the next generation of podcast ads on Spotify, made possible by SAI: Call-to-action cards (CTA cards), clickable companions to the podcast ad experience designed to help listeners remember and take action on the ads they hear. CTA cards introduce interactivity to podcast ads for the first time, transforming the format from something that can only be heard, into an experience that you can also see — and, most importantly, click.

What’s next for digital audio advertising

For podcasts, this transformation is revolutionary. Since the medium’s inception, advertisers have relied on coupon codes and vanity URLs to track a campaign’s success. We’re taking the classic podcast ad experience further, allowing a brand’s message or coupon code to follow through from the confirmed ad impression to the advertiser’s website or app.

From music to podcasts, Q&A and Polls to Lyrics, we’re constantly working on new ways for creators and advertisers to connect with listeners. CTA cards are the latest step in Spotify’s future vision for audio: interactive experiences for listeners, creators, and advertisers.

Listen to a short Spotify Advertising podcast episode on the future of interactive podcast advertising — or log into your Spotify account to watch the podcast episode as a video.

  1. Kantar Research, Ad Age, September 2021
  2. eMarketer, US, April 2021
  3. Spotify For The Record: 2021 Wrapped for Podcasters, December 2021

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