Omnicom Plans $20 Million in Podcast Ads on Spotify
By Nat Ives
Omnicom Media Group plans to spend $20 million on advertising in
podcasts distributed by Spotify Technology SA under a deal covering
the second half of this year, the companies said.
It isn't the first plan for significant spending ahead of time
for the fast-growing podcasting industry. iHeartMedia Inc. has been
handling much of its podcast sales through upfront negotiations for
almost a year, according to Conal Byrne, president of the company's
But advertisers typically sponsor individual series when it
comes to podcasts, where advertising is growing rapidly but remains
relatively small. Marketers are projected to spend $863.4 million
on advertising in U.S. podcasts this year, up from $678.7 million
in 2019, according to the Interactive Advertising Bureau and
PricewaterhouseCoopers. By comparison, ad revenue from digital
video in 2019 was $21.7 billion, the IAB said.
"It's a big deal, a very big deal versus what we've done in the
past," said Catherine Sullivan, chief investment officer at Omnicom
Media Group North America. Clients spent several million dollars
through Omnicom to advertise in podcasts in 2019, she said.
Omnicom Media Group, part of advertising-agency holding company
Omnicom Group Inc., is increasing its podcast investment now partly
because audiences continue to grow and partly because technology is
making the ads more targetable and measurable, Ms. Sullivan
"We know that audio works very well at increasing consumer
attitudes and driving action, but we believe that adding
addressability to the podcast format may increase metrics even
further," she said.
The deal also calls for collaboration on research and a first
crack at new shows for Omnicom Media Group clients, which include
McDonald's Corp., PepsiCo Inc. and AT&T Inc.
Big media and technology companies have been trying to capture
more of podcasts' growth for themselves, and to accelerate it.
Sirius XM Holdings Inc. is nearing a deal to buy E.W. Scripps
Co.'s Stitcher Inc. podcast unit for around $300 million, The Wall
Street Journal reported this week. The company last year struck an
exclusive deal for podcasts from Walt Disney Co.'s Marvel
Spotify last month formed its own pact for superhero podcasts
from the DC unit of AT&T Inc.'s Warner Bros. Entertainment
Inc., plus other fiction podcasts using Warner Bros. properties. It
also has acquired podcast producer Gimlet Media Inc., podcast
publisher Anchor FM Inc. and the sports-and-pop-culture publisher
the Ringer, which makes many podcasts. It is planning a
criminal-justice podcast co-produced and co-hosted by Kim
Kardashian West, and recently won exclusive rights to the popular
podcast from Joe Rogan in a licensing deal the Journal reported is
worth more than $100 million.
Podcasting's rise has been slowed in part by fragmentation and
the lack of digital marketing tools such as addressability, said
Dawn Ostroff, the chief content and advertising business officer at
Spotify. "There's not even a unified metric by which podcasts are
being looked at by advertisers," she said.
In January, Spotify introduced a method of letting advertisers
know how many people heard a given ad in a podcast, rather than
through the common method of counting downloads for an episode, and
to insert ads in podcasts that have already been recorded. The
technology, Streaming Ad Insertion, also provides insight into the
audiences reached and marketing outcomes, Spotify said.
The spread of ad technology and better measurement will
encourage larger ad buys in podcasting, but it is still early going
compared with other digital media, said Zoe Soon, vice president at
IAB's Consumer Experience Center of Excellence.
"Those are all things to crack," she said.
Write to Nat Ives at firstname.lastname@example.org
(END) Dow Jones Newswires
July 08, 2020 06:44 ET (10:44 GMT)
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