Spotify acquires US-based podcast-tech firm Megaphone for €198M; strengthens investment in podcast advertising

Podcasting has grown by leaps and bound, and there are millions of people around the globe who regularly listen to podcasts. To ensure its foothold in the growing segment, Sweden-based Spotify has announced the acquisition of US-based podcast technology company Megaphone. While details of the deal are yet to be disclosed, certain reports  suggest that the deal is worth €198M. 

Streaming Ad Insertion opens up for Megaphone

At the beginning of this year, Spotify introduced Streaming Ad Insertion or SAI. This feature is the company’s proprietary ad-insertion technology, which enables ad delivery based on a listener. In contrast with the old method of ad insertion in podcasts, where ads that are to be inserted are selected beforehand, SAI picks ads in real-time using a listener’s data. This results in more efficient ad-targeting and chances of higher revenue generation.

With this deal, SAI will now be available for podcast publishers on Megaphone. This is the first time SAI is being made available for third parties. “That means that podcast publishers will be able to offer more-valuable podcast audiences to advertisers based on confirmed ad impressions,” Spotify’s blog post reads. 

Advertisers will also be able to stay active across Spotify’s Original and Exclusive podcasts while scaling reach through the Megaphone Targeted Marketplace. 

Value creation for podcast publishers

With Spotify acquiring Megaphone, the two companies are poised to offer new tools for podcast publishers to help them earn more. These tools are said to help creators get their content monetised and will help match listeners with greater demand from advertisers. 

The Sweden-based music streaming company also revealed some numbers on revenue generated from audio. In its Q3 earnings call, 22% of the company’s total monthly average users engaged with podcasts and the podcast revenue was reported to be up by about 100% year-over-year. 

Earlier this year, Spotify launched in 13 new markets across Europe – Albania, Belarus, Bosnia and Herzegovina, Croatia, Kazakhstan, Kosovo, Moldova, Montenegro, North Macedonia, Russia, Serbia, Slovenia, and Ukraine. This brought the total number of markets that Spotify covers to 92.