The fast-growing popularity of podcasts makes it one of this year’s most popular trends, and marketers are catching on. With millennials leading the Podcast revolution, it has become a unique medium for storytelling and conveying information of many different topics to the masses.
As of June 2019, there are over 700,000 active podcasts and counting, which is quite a large jump from when Apple confirmed that there were 550,000 podcasts just last year. The increasing amount of streaming services has surely contributed to making this growth possible. While the number of Podcast listeners continues to expand, there comes a boost of new podcast marketing strategies.
Spotify bets big on podcast marketing
As Spotify’s number of premium subscribers continues to grow, the ad revenue starts to take a hit. A recent Guggenheim study revealed that adding podcasts to the music platform increases the potential for not only revenue growth but also user engagement. In hopes to boost its advertising revenue, the music platform has integrated podcasts into the streaming app in a big way. For example, Spotify spent up to $400 million in buying major podcasting networks such as Parcast, Anchor, and Gimlet media to build up their library with a variety of genres. They have also announced a partnership with Barack and Michelle Obama’s company, Higher Ground Productions, to make podcasts exclusively for Spotify. The deal allows for the former president and first lady to produce and be featured in podcasts covering a wide range of topics. Spotify’s chief content officer Dawn Ostroff responded to the announcement with, “President Barack Obama and Michelle Obama are two of the world’s most important voices, and it is a privilege to be working with them to identify and share stories that will inspire our global audience, which looks to Spotify for unique, breakthrough content.”
The integration of podcasts and strong newfound connections are proving to be successful marketing tactics used to produce rapid user growth and engagement. In a recent post, Daniel Elk, Spotify’s CEO, stated that the app has become the second biggest podcasting platform in just under two years, and that it “will focus intensively on the curation and customization that users have come to expect.” This fast progress is indicated by the app placing ninth in overall application downloads this year. Spotify recently released its second-quarter update revealing that its monthly active users grew by 24% while the advertising revenue grew by 34% ($184 million). After the layout change, Spotify’s podcast listeners grew by 50% just between the first and second quarter. This goes to say that they are breaking into the Podcast business at the right time. During these new developments, the app has been open about their aim to use ad-targeting on their listeners to improve their revenue.
What is ad-targeting and how does it impact Spotify’s Podcast listeners?
Ad-targeting is a way that advertisers place ads based on the users listening history. Now advertisers can be more specific in the types of ads consumers hear based upon what categories they take a specific interest in. Spotify free users will still experience ads the same as before, but this time the ads will be adjusted to better fit the user based on their past data. By using this strategy, the company can have a solid basis on which ads they should be purchasing to further catch the podcasts listener’s attention.
For instance, Spotify found that a popular category among podcast listeners falls under crime/mystery, which caused them to purchase a company, Parcast, that specializes in that genre. By giving the users advertisements they are more attracted to, the streaming app’s ad revenue goes up. Ad-targeting also allows the advertising industry to create more relevant content that is less likely to drive the user away. To make the addition of Podcasts noticeable to the users, the app updated its layout by separating ‘Music’ and ‘Podcasts’ in your personal library.
The new layout design allows listeners to navigate through the podcasts and episodes they are subscribed to in a much easier and faster way than before. Therefore, making the app more convenient to the audience creates higher podcast user engagement, and in addition, further opportunity for ad-targeting. Even though Spotify has separated its library in efforts to grow its Podcast listeners, the app now incorporates Podcasts into playlists such as “Your Daily Drive” made specifically based on your listening preferences. This brings a unique element to their platform that gives the audience a personal touch based upon the topics they are intrigued by while at the same time being mixed in with their favorite music.
Getting familiar with Spotify Ad Studio
To grow the advertising side of Spotify, the Swedish company has enhanced its self-serve advertising platform, Spotify Ad Studio, to make it more beneficial for advertisers concerning ad-targeting. The options of interest targeting and real-time context targeting have been added for brands to choose how to effectively captivate podcast listeners which then boosts revenue. By choosing to use interest targeting, advertisers target listeners about topics they enjoy based on the data from podcasts and playlists they have frequented.
On the other hand, real-time context targeting allows users to be targeted at specific moments throughout the day so that they can hear an ad message at the perfect time. These maneuvers are then more likely to charm the consumers into following the advertisements instructions.
In conclusion, the podcast marketing industry is relatively new and highly competitive. Based upon the statistics we are seeing of quick podcast listener growth, specifically among younger people, there is always room for new creative ideas for advertisers to better appeal to their audience. As podcasts continue to grow as a desired source of information, how are you utilizing this medium to further advance your business? Whatever your goals, we have the expertise to help you get there. Contact us today.