Spotify’s Podcast Business Is Getting Its Own Advertising Engine to Help Boost Revenue

By Elijah Labby Monday, March 1, 2021

Spotify has made a massive investment in its podcast business in recent years. Now, the music app company is taking its business to a new level by launching an advertising engine that the app hopes will boost revenues and give them some return on the podcast business investment.

A person holding a smartphone with the Spotify app open.

Spotify’s Investment — Podcast App Features

In 2019, Spotify bought Gimlet, a podcast creation company that had been able to rack up millions of listens across its podcast network. In 2020, it was announced that Joe Rogan, who consistently tops the podcast ranking numbers with his brash, long-form interviews, would sign an exclusive deal with Spotify. His podcast would no longer be available on any other app — listeners could listen only on Spotify.

Those two acquisitions underscore just how much Spotify, which was previously an app solely for music, is betting on the podcast business medium as the way of the future.

On the Advertising Network

Now, with the announcement of an in-house advertising network that allows any advertising company to reach customers on the app at scale, Spotify wants to start cashing in on that bet.

“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,” the music app company wrote in a press release. “...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. We are in the early stages of developing this offering and look forward to sharing more in the coming months.”

The company spoke with the HBO Max Vice President of Growth Marketing, Katie Soo, to get a feel for how the company — which often provides original podcast entertainment to accompany its original series — uses Spotify to increase participation in its new streaming business via advertising.

“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,” said Soo. “Our early campaigns have been successful, and we plan to continue partnering with Spotify to explore what’s possible in this growing medium.”

The Market for a Podcast App Like Spotify

By taking part in the podcast business, Spotify stands to take from a market growing at a compounded annual rate of over 27%. In 2019, it was worth $9.28 billion. By the end of 2021, it should be worth about 50% more.

But it’s more than that — Spotify’s investment in the podcast business is an opportunity for advertisers to reach the people that listen to those podcasts. It’s a new era of podcast advertising, and Spotify is at the forefront.

About the Author

Headshot for author Elijah Labby

Elijah Labby is a graduate of the National Journalism Center. He has previously written for Broadband Breakfast, a technology and internet policy website.

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