Even though podcasting has been around longer than YouTube, it is less popular than the latter. That has a lot to do with the fact that while targeted ads have revolutionized online advertising, the same might not be true in the case of a podcast. So far their advertising methods had very much in common with the old days of broadcast rather than with the new era of the internet.
However, the secret for audio advertising to make more money is to target advertising more, Spotify will definitely be able to help with that. Being a top streaming service with more than 200 million users, they are preparing to focus more on podcasts. Spotify announced last week that they are acquiring two major podcast companies. This means they will be able to make better recommendations and help people find more podcasts they will like. They will also update the app’s interface, as well as insert highly targeted ads raising the potential for podcasts to become more popular and to generate more revenue.
Even though Spotify has been selling its own ads in its original podcasts since last year, the portion of Spotify’s ad business focused on podcasts will only grow. Also, the company seems to be taking a different approach to working with podcasters than it does when working with musicians. They want to either bring in podcasters’ voices in-house or exclusively license their content.
Courtney Holt, head of Spotify Studios recently stated during the Consumer Electronics Show (CES) in Las Vegas: “The first step was to make sure that we’ve got the world’s best podcasts on Spotify, and integrated the experience into the service in a way that allowed people to build habits and behavior there. What we started to see is that the types of podcasts that really were working on Spotify were ones where they were really authentic voices… so we just decided to invest more in those types of voices.”
Basically, Spotify realized that by bringing in influencers of the podcast community they will also bring along their own community with them and grow the listener base. Spotify will also be recommending other podcast content the listeners might like based on factors like mood, behavior and moments.