The move follows earlier acquisitions of New York podcasting companies Gimlet Media and Anchor – part of a strategy designed to invest in podcast content and discovery and grow its subscriber base – and there are likely more to come.
The money being poured into acquisitions in the space doesn’t match the revenues currently being generated, although that is set to change. a study last year by IAB and PwC put 2017 advertising revenues from US podcasts at $314m (compared to $12bn spend on online video) but forecast this would rise to $659m by 2020 as the format attracts increased attention from brands and agencies.
That attention is bringing new problems, however: at Advertising Week Europe last week, Oli Walters, head of UK sales at podcast host and distributor audioBoom, flagged a shortage of quality inventory.
“Demand is up and the supply is quite low, which naturally in that climate drives high CPMs,” he explained.
“There are lots of podcasts, but we’re having inventory issues. On certain podcasts the demand is just overwhelming. We have advertisers that are booked up until the middle of 2020,” he revealed.
The current fragmented nature of the market also presents a hurdle to buying podcast media in an efficient, scaled manner.
Spotify’s acquisitions will start to change that but Apple remains the dominant force and its approach to sharing data will frustrate brands and agencies demanding listener-level measurement. (For more, read WARC’s report: Audio ad dollars will flow if podcasts can address measurement concerns.)
Platforms must combine Google Analytics material with their own web tracking data to piece together a “rough idea” basic demographic information, including age, gender and location.
“The growth of Spotify is fantastic, and the growth of Google Podcasts is great, but when Apple still has the lion’s share, it does make it, from an advertiser’s perspective, quite challenging,” said Walters.
“Brands want to know everything – how many people are listening, streaming, downloading, especially when it comes down to spot ads. We can’t always give them [that information].”
Sourced from WARC, Spotify