Spotify to run ads within podcasts based on user data

Spotify is introducing a new way to profit from its ever-increasing podcast user base

Spotify has revealed a new technology called Streaming Ad Insertion (SAI) that will leverage user data to place targeted ads into podcasts.

In practice, this means that Spotify will play ads to you based on your location, age, type of device and more. Therefore, two users won’t receive the same ads, even if they’re listening to the same podcast. Businesses, meanwhile, will receive detailed reports on how many times their targeted ads were heard and its overall reach. SAI will run among free Spotify users only.

Of course, SAI will only occur with podcasts that are streamed, so users who consume downloaded podcasts will avoid this. However, Spotify says “very few” Spotify users actually download podcasts, so the majority will be affected by SAI. Users that do continue to download podcasts will simply be subject to the usual predetermined ads.

Overall, Spotify has a major incentive to try to further profit from its podcasts, given that more than 500,000 are currently available on its platform. Further, Spotify said in its most recent earnings report podcast consumption on its platform rose by nearly 40 percent between the second and third quarters of 2019.

For that reason, Spotify has since tried to entice more people to listen to podcasts in several ways, including a pop-up that asks users to choose which types of podcasts they’d be interested in.

A specific launch date for SAI was not mentioned. That said, Spotify did note that it will initially only run these ads in its original and exclusive shows. Presumably, other brands will be welcomed into the SAI fold at some point down the line.

Via: The Verge