Spotify Outlines Podcast Monetization Strategy

Further details were released today by Spotify regarding its plans to generate revenue from its podcast investments. The company announced the launch of a new audio advertising marketplace, known as the Spotify Audience Network.

This network will enable advertisers to connect with listeners across a variety of Spotify content, including Spotify Originals and Exclusives, podcasts hosted on Megaphone and created with Anchor, and its ad-supported music offerings, all within a unified platform.

Expanding Ad Platform Access

Spotify also intends to make podcasts available on its self-service advertising platform, Spotify Ad Studio. This will initially begin as a beta test in the U.S., focusing on Spotify Originals and Exclusives.

The company indicated that this access will be broadened to encompass third-party podcasts in the future, as revealed during its “Stream On” online event.

Currently, Spotify Ad Studio is utilized by advertisers in 22 markets, following its 2017 introduction, to reach Spotify’s music listeners with both audio and video advertisements.

Spotify highlighted the service as its fastest-growing channel for advertising purchases, although specific growth metrics were not disclosed.

The Spotify Audience Network: A New Marketplace

The primary announcement concerning advertising centered on the launch of the Spotify Audience Network.

Similar to other recent announcements, Spotify provided limited specifics regarding the operational details of the network, stating only that it is in the “early stages of development” and further information will be shared at a later time.

However, the company characterized the marketplace as a potentially transformative development.

This is particularly true for podcasters seeking to monetize their content through advertising, and for advertisers aiming to reach Spotify’s extensive audience, both on and off the platform.

Recent investigative reporting by The Verge revealed that Spotify had been the primary sponsor for Anchor advertising to date, despite previous commitments to secure sponsors for independent podcasters.

It now appears Spotify has been actively developing its advertising marketplace and associated tools to fulfill these promises, potentially delaying direct advertiser outreach in the interim.

Scaling Streaming Ad Insertion (SAI)

Spotify also discussed how its acquisition of Megaphone will facilitate the expansion of its Streaming Ad Insertion (SAI) technology.

Launched in early 2020, SAI will be extended to publishers beyond Spotify’s own Originals and Exclusives audio programs.

Currently, SAI is available in the U.S., Canada, Germany, and the U.K., with plans for expansion into additional markets throughout 2021.

Since its introduction, SAI has incorporated new features such as audience-based advertising, native ad placements, and reporting on creative performance.

Later this year, Spotify intends to make SAI accessible to Megaphone podcast publishers and select Anchor creators.

New Revenue Opportunities for Anchor Creators

Anchor creators will have access to more than just advertising to increase their revenue streams.

Spotify announced it will begin beta testing a new feature in the coming months that will allow Anchor creators to offer paid podcast content on Spotify, targeting their most loyal listeners, as previously reported by TechCrunch.