Spotify adds Streaming Ad Insertion technology to its podcasts

• Spotify’s podcast consumption increased 39% from Q2 to Q3 last year and ad revenue for the podcast industry is projected to skyrocket to more than $1 billion in 2021.
• After experiencing a staggering growth rate, Spotify has opened its doors to advertisers by launching Streaming Ad Insertion (SAI).
• SAI is a new proprietary podcast ad technology that powers Spotify Podcast Ads.
• Puma was among its first partners to test SAI and the ads resulted in ad recall lift by +180%.

2019 was a huge year for the audio industry with Spotify leading a wave of investment and innovation that’s accelerating the growth of podcasting. Time spent listening to online audio reached a record high, while in the US, the number of people who are monthly podcast listeners is expected to climb to 106 million by 2023.

Simultaneously, ad revenue for podcasts is projected to skyrocket to more than $1 billion in 2021. These numbers point to an incredibly bright future for podcast fans, creators and brands alike.

Spotify, therefore, has launched Streaming Ad Insertion (SAI), a new proprietary podcast ad technology that powers Spotify Podcast Ads. As audio and podcast consumption increases at staggering rates — on Spotify — podcast consumption increased 39% from Q2 to Q3 last year. And ad dollars follow — Spotify is all set to unlock the potential of this uniquely powerful and intimate advertising medium.

Here’s how it works

SAI technology leverages streaming to deliver Spotify’s full digital suite of planning, reporting, and measurement capabilities for Spotify original and exclusive podcasts. This includes data such as actual ad impression, frequency (number of times a listener heard the ad), reach and anonymized audience insights (age, gender, device type). This is the first time such data is available for advertisers and podcast creators.

Today, despite being a digital medium, the podcast industry measures audience, reach, and impact much like one would a full-page ad in a magazine. Advertisers generally have a sense for who they're reaching, based on survey data and the magazine's target audience. Total circulation measures the number of doorsteps that the issue hits, but there's no precise data on how many readers actually opened the magazine, let alone reached or acted on the ad.

Until now, podcast advertising has experienced many of these same challenges because the medium is still largely downloaded via static RSS feeds. But the shift in consumption from downloads to streaming has opened the door for advances in data-driven podcast advertising. Spotify, therefore, is moving beyond these constraints to reimagine what's possible for this uniquely powerful and intimate medium.

With this technology, Spotify is offering the intimacy, quality and efficacy of traditional podcast ads with the precision and transparency of modern-day digital marketing. In short, Spotify is keeping what podcast listeners, creators, and advertisers love about podcast ads and making the medium addressable for digital advertisers.

Puma was among its first partners to test SAI. It ran host-read ads during the Spotify Original podcast, Jemele Hill Is Unbothered, and the ads resulted in ad recall lift by +180%.