A deep dive into Spotify’s latest podcast-centric advertiser offering.
According to the PwC report, Global Entertainment & Media Outlook 2020–2024, India is the third-largest podcast listening market in the world, after China and the US. Despite the year-on-year growth in podcast consumption, its monetisation has been a challenge in the country due to various reasons.
Spotify is aiming to change this narrative by bringing ‘Spotify Audience Network’, its latest podcast-centric advertising marketplace to India. This offering will help audience-based podcast buying to brands in India.
Brad Grealy, head of ad sales, JAPAC - Spotify and Arjun Kolady, head of sales - India, Spotify speak about what this offering brings to the table.
Grealy highlights the significance of this move, stating, "This is really our first advertising product for podcasts in India."
The Spotify Audience Network serves as a bridge between content creators and advertisers, allowing brands to engage in audience-based podcast buying in India. Grealy explains, "What Spotify Audience Network does is that it's that connective tissue between these two sides that creates benefits for the creator as well as the advertiser."
Content creators create amazing listening experiences, but they may not have the ability to monetise their content or make a living off their work because they don't have relationships with brands or a way to go out and sell the content itself.Brad Grealy, Head of Ad Sales, JAPAC, Spotify
He further elaborates on the challenges faced by content creators, stating, "Content creators create amazing listening experiences, but they may not have the ability to monetise their content or make a living off their work because they don't have relationships with brands or a way to go out and sell the content itself."
Grealy also addresses the diverse scenarios where larger publishers, producing an array of titles, confront challenges in monetising their content. He states, "Maybe they have their own direct sales teams, they can also opt for the Spotify audience network to get additional monetisation.”
According to Spotify, advertisers across India will be able to target podcast listeners - at scale - both on and off Spotify.
Explaining this further, Kolady says, “The way the podcast ecosystem works is that you have a hosting platform. The creator will host a podcast there and they will distribute it widely across multiple listening platforms. Spotify is one listening platform, there are several others. The ads usually are served at the hosting platform, however, once the podcast gets distributed, the ads also go away.”
“Even if you are not on Spotify, you can continue to monetise this because it will be powered through the Spotify Audience Network,” he adds.
He shares that one major hurdle in podcast monetisation has been the lack of targetable content and irreversible advertising. “I have a great show, I'll go try some brand to sponsor it, and when some brand sponsors it, I am basically recording the ad with the content. So what do I do with that content one year or even a month down the line?”
Kolady underscores the dynamic nature of advertising with the Spotify Audience Network, emphasising that ads can be seamlessly inserted and removed. Podcasters are only required to specify the markers for ad slots, providing them with enhanced flexibility to regularly refresh advertising content in response to escalating demand.
He elaborates on the significant advantage of this approach, stating, “If somebody's coming and listening to an episode that you recorded one year ago, you would not be able to monetise that because it's an old episode and you would not be able to pull out older ads which might be irrelevant now. Now your entire catalogue technically can be monetised because the ads are dynamically inserted and removed based on the targeting.”
Spotify’s focus on podcasts
The company has been betting big on its podcast business for a few years now. It invested over a billion dollars to build up its podcast business with 5 million titles and 100 million podcast listeners over the past few years.
Podcasts remain a core focus for Spotify and will continue to be so for many years to come.Brad Grealy, Head of Ad Sales, JAPAC, Spotify
The company has struck deals with the likes of Kim Kardashian, Prince Harry and Meghan Markle and even Michelle and Barack Obama in the recent past to drive its podcast consumption.
Speaking about the company’s vision with regard to podcasts, Grealy says, “Podcasts remain a core focus for Spotify and will continue to be so for many years to come. We did make some large-scale investments in both technology and content.”
According to him, this has put Spotify in an excellent position in terms of the size and scale of podcast listenership on the platform. “We are evolving that strategy, and we want to ensure that we're bringing great entertainment, great content, great customers, and great listenership experiences to Spotify. But we also want to do it in a way that we can ensure that it's successful for our model. So the model continues to evolve.”
Grealy believes that despite the popular narrative of podcast audiences being niche, the medium has actually taken off well with the masses in India.
It's not like there was no demand from the advertiser’s side, however, until now, there was no modern, scalable, measurable tech to really power it.Arjun Kolady, Head of Sales - Spotify India
“When podcast consumption was in its early phase, it had highly educative and targeted affluent audiences and it expanded to general audiences because once you reach a certain size and scale, the listenership and the audience started to mirror the population itself,” he explains.
Kolady adds that it's not like there was no demand from the advertiser’s side, however, until now, there was no modern, scalable, measurable tech to really power it. He says the Spotify Audience Network challenges exactly that.
Spotify’s overall advertising revenue was up 16% in Q3 2023. Grealy says that India continues to be one of the fastest-growing markets from an advertising perspective globally. “It's part of the reason why we've expanded the size of the sales team so considerably over the course of last year.”