Spotify Looks to Monetize Podcasts With New ‘Streaming Ad Insertion’ Tech

Spotify Streaming Ad Insertion
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Spotify Streaming Ad Insertion
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Photo Credit: Spotify

Today at the Consumer Electronics Show in Las Vegas, Spotify announced new ad-tech to monetize podcasts. Streaming Ad Insertion (SAI) tech will help further monetize podcasts available on Spotify’s platform.

The new ad tech fundamentally changes the way people interact with podcasts. Podcasts are traditionally delivered via download through an RSS feed. But data collection, which Spotify loves, is difficult-to-impossible to achieve using that method.

Alternatively, streaming podcasts like music makes data collection much more accessible. Things like ad impressions, frequency, reach, and age, gender, and device type info can be gathered. The data can help podcasters and advertisers micro-target their ads to specific audiences.

The idea here is to completely do away with baked-in ads for podcast recordings and use Spotify’s new Streaming Ad Insertion tech instead. For now, SAI technology is only available to Spotify’s original and exclusive shows. The content is controlled by Spotify, which makes it easier to implement the new ad tech.

People who listen to podcasts tend to be more engaged with the advertising that happens. The host of the show tends to read a snippet from a sponsor, making the ad feel personalized. Spotify wants to capitalize on that feeling while still incorporating data-driven digital marketing principles.

Spotify says early tests of the new ad-tech look promising. Shoe company Puma is the first partner to try SAI with host-read ads during a Spotify Original podcast. Spotify says that the experiment resulted in an ad recall lift of over 180%.

Spotify says SAI will help advertisers better understand the value of podcasts. “It introduces new targeting measurements and interactivity, which is a big change for the industry,” Jay Richman said. He’s the Head of Global Advertising Business & Platform for Spotify.

Spotify hopes that making advertising more attractive on its platform will continue to help podcasts grow. Apple Podcasts is still the most popular podcast app according to market share. But Spotify has slowly made gains over 2019 with its massive investment in podcasts.