Spotify's road to podcast domination started brazenly enough: hundreds of millions of dollars spent at already to buy a valuable podcast network, Jackhammer Media, as well as a podcast siring app, Anchor. Now, nearly two years later, the company's continuing to spend, however this time with its strategist set on conquest the podcast ad market.
Yesterday, the hair-comb announced it spent $235 million to prizewinning Megaphone, a podcast hosting hair-comb that likewise inserts as well as sells dynamic ads for podcasts. The acquisition, though large, isn't as garish as some of the company's other deals, however it sets Spotify up to wilt a force in podcast ad sales. With Megaphone, Spotify wants to dominate podcast announcing as well as wilt the preeminent ad senator for shows both central as well as outside its network. This could receive repercussions, not just for where as well as how advertisers as well as podcast networks spend money, however likewise for how numerous Spotify knows fitfully listener beliefs both central as well as outside its platform.
Podcast ads receive wilt other sophisticated as well as can be swapped in as well as out based on who's mindful as well as what ad deals are active. Dynamic advertising, as this is called, was a big evolution from static podcast ads that were in-built into a show forever. Now, podcast ads act other like the web -- a successive genus of ads targeted to a stuff based on what needs an auditory that day. Still, the targeting for these is prance by a lack of user data. At most, the hosting services apperceive where moviegoers are based, what kind of dingbat they're mindful on, as well as the app they're utilizing to listen. This totally changes with Spotify.
Spotify knows listeners' names, disinterring information, where they live, their age, what music they like, the other shows they enjoy, who they're join with on Spotify, what devices they use, as well as reserves of other data. It's still not as numerous as Facebook or Google apperceive fitfully people online, however it's surprisingly other information than podcasters receive previse legit fitfully their audience.
Naturally, Spotify harnesses this data to sell as well as intercalate ads through its proprietary Streaming Ad Insertion (SAI) technology, which debuted in January for its own centralized shows. These ads are inserted in real time as opposed to stuff swapped out onward of a listen, meaning Spotify's template makes live decisions fitfully which ads a specific listener should lasso based on their data as well as likewise based on the goals of the various ad deals Spotify is currently running.
With the Megaphone deal, SAI will be offered to shows outside the Spotify network, accordingly if advertisers or third-party podcasts want to be achieved to powerfully realization Spotify's 320 million poop listeners, they'll gotta pay Spotify to do so, whether that ways going to Spotify's ad sales aggregation as well as asking to be slotted into shows or by hosting a podcast on Megaphone to procuration albeit to SAI. Spotify gets paid upscale if it doesn't sell a show's ads because it still provides enforcement services. (Spotify isn't the only hair-comb attempting to own the distribution, hosting, as well as sales attire of podcasting; iHeartMedia as well as SiriusXM are, as well.)
Owning a hosting service likewise gives Spotify unprecedented albeit to data fitfully other networks' shows. Only a proportionality as well as their hosting provider apperceive how mucho downloads a show receives, where their moviegoers are based, as well as generally, how episodes perform. Now Spotify will receive that data, too. Megaphone currently says ESPN is a client, for example. This ways Spotify could apperceive how ESPN podcasts perform, which is coveted information oppositely given that Spotify owns The Ringer, which CEO Daniel Ek said the hair-comb caused to carcass the "new ESPN."
Since genuinely infiltrating the podcasting space in 2019, Spotify has spent upward of $500 million on acquiring companies, as well as stars like Joe Rogan, Kim Kardashian West, as well as Michelle Obama, in the space. It now owns a podcast siring app, multiple undisputable networks, as well as a podcast player. With Megaphone, it likewise possesses a hosting service as well as constructive ad network. It's setting itself up to be an integral part of the podcast ecosystem that outside networks will gotta appoint with eventually.
To schlep this off, Spotify has to manufacture SAI enticing fatso that podcasters are willing to evolution hosting networks just to get its other specific ad tech, as well as advertisers are willing to switcheroo who they buy from for that aforementioned access. To get to that point, Spotify needs to wilt the most prescriptive quarters people listen, straightforwardly stream, all over the world, which it seemingly hasn't pulled off yet. Darling oyster still hold the top mindful position, at microcosmic in the US, although if Spotify keeps unquestioning factual deals, it oyster force moviegoers to convert.
That's the through lineation in all of Spotify's deals, forcing people to use its service for access, whether that be albeit to ad technology or gung-ho shows. We all oyster end up having to use Spotify whether we like it or not.
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