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The Spotify Experience

Digital

The Spotify Experience

Digital Advertising Specialist Chris Gregory-Pasha reflects on what the Joe Rogan deal really means for the future of podcasts on Spotify.

Hands up who only started listening to The Joe Rogan Experience podcast during lockdown and quarantine? Me too (I typed that one-handed).

Spotify announced recently that it has entered into a multi-year, rumored to be worth upwards of $100 million deal to exclusively host the popular podcast on its platform. The media attention this deal has attracted has, in many ways, overshadowed much of the underlying strategy behind the decision – which looks to be growing podcast ad revenue and having a tighter grip on their first-party data.

The move isn’t surprising, as we hurtle towards an advertising ecosystem that doesn’t rely on cookies. Many publishers will be making huge plays in the data space to ensure their first-party data is as rich as possible. Only this week, we have seen Facebook launch an e-commerce platform aimed at helping businesses build a digital presence while at the same time gaining access to even more user purchase data.

Right now, walled gardens such as Google, Amazon, and Facebook seem to be leading the way when it comes to ensuring their advertising revenue continues to grow, especially when we eventually say goodbye to third-party cookies in 2022. Both Google and Facebook are positioned to benefit by further forcing advertisers to use their first-party data and ad-buying tools if they want to continue reaching their audience at scale, with Google’s Privacy Sandbox allowing them to attach a unique ID to every ad impression they serve and ultimately allowing them to truly understand if a person who saw an ad eventually did buy the product.

Giant duopolies aside, the next few years will be very important for many publishers still selling their own advertising inventory; and Spotify has drawn a very clear line in the sand between themselves and other podcast hosting platforms. This Joe Rogan deal will mark the beginning of an aggressive push to host popular podcasts exclusively on Spotify, allowing them to serve their own adverts within these programs – something they cannot do currently. Outside of their own podcast network, any paid promotion you hear within your favorite podcasts on the platform today will have been sold through a rival hosting platform or by the podcast themselves – not ideal for Spotify and their 250 million podcast listeners around the world.

Podcasting advertising is still in its infancy, relatively speaking. Yes, you may have been able to advertise in podcasts for many years. However, these were largely stitched into the programming (to ensure downloaded episodes still contained ads) or more recently as pre-roll. This is where Spotify’s Streaming Ad Insertion technology (SAI) comes into play. SAI will allow advertisers to be inserted into shows in real-time, based on what Spotify knows about them. Details such as age, gender, and location will be used alongside broader interests to ensure advertisers are reaching the right audience, bringing podcast advertising closer to digital and, eventually, auction-based buying – something which we have also started to see more across both linear and connected TV in recent years.

 

Advertisers will finally be able to put data at the beginning, middle and end of their podcasting campaign – allowing them to make informed decisions and set goals based on who clicked, who skipped, who eventually bought the product, rather than relying on prehistoric metrics such as offer codes and affiliate payments. These improvements in backend podcasting ad tech will allow platforms like Spotify to scale their podcast ad revenue incredibly quickly. And having exclusive content such as The Joe Rogan Experience will provide a very solid foundation to do this.

Rest assured, this will not be the death of the open podcast platform or marketplace, and it will certainly not just be Spotify trying to secure exclusive deals. Apple will be looking to bring more owned media inside its already high walls. So, I would expect there to be some fierce bidding wars in the future for popular shows.

The open podcast ecosystem will need to strike a balance between value for their advertisers and protecting user privacy. Sadly, this won’t be something they can achieve overnight and it will have to involve a huge technical overhaul in the way ads are currently inserted into podcasts. While some platforms have made inroads into this type of technology, it needs to be driven at industry level and be as inclusive as possible.

For now, I’ll sit back with some popcorn and watch the backlash towards the Joe Rogan deal escalate – he was already quite polarizing for many and this deal could easily be interpreted as greedy on his part. I certainly won’t be ditching my Stitcher or Patreon apps any time soon. However, if my favorite podcasts such as The Wasting Time Podcast or We Hate Movies move across to Apple or Spotify or any other walled garden for that matter, I may be forced to stop listening, especially at a time when all of my content streaming service subscriptions are coming under review in light of the current economy.

Opinions expressed in this piece belong to the author.

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