Spotify’s New Tool Shows Podcast Industry Hunger for Digital Measurements

I think it’s safe to say that podcast marketing has proven it’s here to stayOpens a new window .

What started as a niche marketing tactic is now firmly mainstream, with many experts considering podcasts one of the fastest-growing digital marketing segments.

“Consumers have put podcasts front-and-center,” said Anna Bager, Interactive Advertising Bureau (IAB) Executive Vice President of Industry Initiatives. “Podcast storytelling is deeply engaging and provides marketers with a brand-safe environment that enhances the appeal to advertisers.”

Moreover, with nearly a third of Americans saying they listen to podcasts on a monthly basis and more than a fifth doing so on a weekly basis, clearly there are many consumers marketers can reach through the medium.

No wonder, then, that revenues from podcast advertising reached nearly $500 million in 2018, up 53% from 2017, and have been projected to surpass $1 billion by 2021, according to a recent IAB reportOpens a new window .

Yet, while around one-third of US marketers and agency professionals say they currently advertise in podcastsOpens a new window , there’s been one major stumbling block keeping many marketers from exploring the medium: It’s hard to measure the most important marketing KPIs or produce reliable data on podcast listeners.

As I wrote in an article about podcast marketing last July, “the promise of potential marketing growth is counter-balanced by the reality that, unlike text- or video-based content, it has traditionally been difficult to measure key audience metrics of podcasts such as user engagement, conversions or the all-important ROI.”

Gradually, though, solutions to this problem are coming onstream.

Spotify’s Streaming Ad Insertion tool

Spotify has been focusing on podcasting in recent years in its quest to keep users engaged and entice radio listeners over to its platform.

Last year, the music-streaming giant bought three podcasting companies for a combined $400 million.

Now Spotify, the second-largest podcast platform in the world, is moving to grow its podcast marketing revenue.

Traditionally, users download shows and then listen to them on their device at their convenience. The problem for marketers is that this way of consuming podcasts makes collecting detailed and accurate data about an ad’s performance next to impossible.

As such, the podcast industry has generally “measured audience and reach through the number of times an episode is downloaded and with survey data,” explains Anne Steele for the Wall Street Journal. However, Steele warns, “while a key measure of popularity, a download doesn’t necessarily mean a consumer listened to a podcast, and most services make it easy to skip through ads.”

This has led advertisers to focus their podcast marketing spend on ads read by hosts as the only way to ensure consumers hear their brand’s plug. Unfortunately, though, reliable data on the effectiveness of those ads is not usually readily available.

Enter Spotify’s new tool. Like the ads on Spotify’s free music streaming service, Streaming Ad Insertion delivers ads on podcasts via streaming.

That means the service can offer its advertising clients more precise metrics, tracking numbers of impressions and frequency, as well as other listener characteristics including age, listening behaviors and preferences, gender — and even the type of device on which audience members heard the ad.

If Streaming Ad Insertion works as seamlessly as Spotify promises, the service will undoubtedly help lure brands that want more transparency in the targeting and measurement of their podcast marketing.

Why marketers should care

Spotify is the latest podcast platform to try to answer the industry’s proverbial million-dollar data analytics question.

Nielsen, for instance, launched a service last yearOpens a new window that it says will also generate key consumer data insights such as buyer personas and purchasing preferences.

Nielsen, though, plans to produce this data through a biannual podcast survey of 30,000 Americans to analyze genre preferences, purchasing plans and other audience tastes and behaviors.

This is a trend marketers can expect in the coming year: companies launching tools and services that will provide better, more in-depth and real-time performance data of podcast ads.

It makes sense. One of the key factors holding back podcast marketing has been the difficulty of leveraging valuable insights from the relevant consumer data — largely due to the current lack of measurement standards.

Marketers should be prepared because when the industry eventually does land on an effective universal digital measurement methodology, podcast marketing will likely skyrocket.

Kurt Kaufer writes for ForbesOpens a new window that “digital measurement will be a much larger factor in the tracking and measurement of podcast advertising KPIs,” explaining that “moving to a digital-based mechanism may prove to be the inflection point the industry has needed to quiet the skeptics.”

As advertiser demand for more precise data grows, he says, these new measurement tools and services will “help materially drive up interest and demand from enterprise brands, shift dollars from other mediums into podcasting, and prove podcasting’s dominance as an ad channel.”