Is Spotify the next major paid ads platform?

Posted 27.11.2020

By Annabel Thomas

There is no question that Spotify has changed the way we consume audible media. Having started out in 2006 in Sweden, it has gone on to generate 286 million active monthly users. Ed Sheeran’s ‘Shape of You’ was the most streamed song in Spotify’s history with 2.5 billion streams! Not only is Spotify changing the way we consume music, they have also played an enormous role in making podcasts part of mainstream media. It is through podcasts that advertisers can expect big changes. Spotify aims to be the largest audio platform in the world, as well as becoming the next big ad network through competing with radio advertising revenue and utilising podcast ads.

How does Spotify advertising work?

Spotify has launched a new type of audio ad network that allows advertisers to target their ads to certain podcast listeners. It looks through the data it has collected on it’s users to allow advertisers to target based on certain criteria. This new technology is called streaming ad insertion and it allows users to target spotify members based on their location, age, the device they are using, interests, gender and even target a specific music fan base. Spotify knows more about it’s podcast listeners than other podcasting platforms do, as it also understands their music taste. This means that we could both be listening to the same podcast but be listening to different ads. 

Whilst Spotify’s technology is not as advanced as that of other web advertisers who know everything about their audience, it is a huge advancement in changing the way we advertise through audio. Spotify users tend to stream podcasts in real-time rather than downloading them. This means the ads are inserted in real-time and you can keep track of what people are listening to and when!

is spotify the next major paid ads platform?

Podcasting is growing

Podcasts have hugely taken off in recent years and become a mainstream way to consume media. Spotify itself has grabbed onto the podcasting trend by investing in it’s own podcast series as they see it as a huge potential for growth.  Spotify aims to develop a similar algorithm to Netflix, where they are able to recommend accurate content based on user data.

From learning about cooking, travel, history and business, podcasts have become a habitual part of many people’s weeks. In the UK as of spring 2020, 18% of us listened to podcasts each week compared to 14% in 2019, with the most common age group of podcast listeners being 12-34. That is over 10 million people in the UK listening to podcasts every week! There are so many podcast genres to choose from, whether that is from parenting to sports or news and politics to relationships, they cater to a huge demographic.

So why does Spotify advertising matter?

Podcast listeners are a great advertising target because they can be reached on the go and from anywhere – on their morning jog, midday dog walk, commute to work or whilst sitting on a train. Many advertisers are keen to exploit this booming type of content and Spotify are at the forefront of offering a space to do so. 

Also, research shows that younger demographics don’t respond well to display ads and often subconsciously filter them out as well as using ad blocking software. However it is suggested that 71% of podcasts listeners approve of the advertisements they hear in their favorite shows as they believe it funds the content they love. This means that if you want to target those younger generations podcasting advertising is a great way to do so!

working from home spotify

Podcast advertising is set to become the new player in advertising, and Spotify isare the platform at the forefront of this trend. Investing in podcast ads is a great way to reach people on the go and target those key younger audiences. If you want any help on using Spotify ads then get in touch with us today!

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