A company that many see as the world’s preeminent music engine is planning to purchase a podcast advertising company as part of its expansion this year.
Reports today talk about Spotify preparing to acquire a business called Megaphone in a $35 million deal where the new platform would help Spotify to create targeted ads for better ad growth in the fourth quarter of 2020.
Tying a large and successful audio platform to podcasting seems like a good idea. Megaphone boasts 60,000 Nielsen audience segments and the capability to create automated campaign insights. Here’s how the company promotes itself on its web site:
“Megaphone Targeted Marketplace (MTM) revolutionizes podcast advertising by providing the same effective targeting and measurement options used across other digital media.”
This strategy is part of a larger pattern where Spotify has already bought up Gimlet Media and Ringer, with an eye toward expanding services and creating a more robust ecosystem for its business.
Spotify’s plan seems ambitious in the age of coronavirus, but according to some analysts, it’s exactly this change, the move by consumers toward hunkering down at home, that’s part of the ballast for the firm’s game plan.
“(Spotify’s) heavy investments in podcasts, in an effort to become the Netflix of audio content, have helped drive subscriber growth at a time when many people are homebound due to the coronavirus outbreak,” writes Reuters staff.
“We are still in the early chapters of the streaming audio industry story, but it is absolutely clear that the potential is significant,” said Dawn Ostroff, Spotify’s chief content and advertising business officer, according to coverage by Wendy Lee at the Los Angeles Times, who notes that competitors iHeartMedia and SiriusXM are also making their own podcasting plays. Podcasting as a practice has become an enormous industry in a fairly quick time frame, as hosts find ways to monetize their live audio streams, and build their target audiences.
Keep an eye on this big audio player.
