Spotify content advertising director explains company plan to revolutionize the podcast industry - Spotify's director of content and advertising, Dawn Ostroff, is betting on exclusive content and franchises to catapult the company to the next level.

Over the past 18 months, Spotify has gone far beyond music and introduced new audio formats such as podcasts and audiobooks, focusing on exclusive and original content from highly coveted creators, entertainment brands and podcast networks, while competing to become the world's largest audio network.

This marks a new stage for the streaming company, which became famous for its music library, very similar to what could be found on other sites, differentiating itself by its algorithms, healing and user experience rather than by its content.

But with the podcast, Spotify is now the exclusive home of personalities like Barack and Michelle Obama, Joe Rogan or Kim Kardashian. He has partnered with brands such as DC Comics to create fictional audio universes around his comics, as happens in television and film. In addition, it has acquired major broadcasters and podcast networks, such as Anchor, Gimlet, Parcast and The Ringer, as well as the stars and related intellectual property.

Ostroff, the executive who runs these content agreements, has explained to Business Insider that she sees huge potential in podcasts and other types of audio entertainment. It takes as an example the company's recent agreement with DC Comics to produce podcasts with original scripts.

"We're going to be able to build a world through its amazing characters and stories," says Ostroff. "It's an example of where all this can go."

In addition, podcasts tend to keep people listening longer and more often, which helps attract subscribers. And they bring extra revenue to the company, because Spotify broadcasts ads on podcasts, even through its subscription service.

Spotify content advertising director explains company plan

Spotify generated 6.800 million euros (8.100 million dollars) of revenue in 2019, 29% more than the previous year. But the company has not yet made any profits throughout the year. Last year it recorded a loss of 186 million euros ($222 million).

Still, the platform's audience has grown a lot, reaching 138 million paid subscribers through June, 27% more than the previous year.

And the original content has helped Spotify snatch market share in the podcast market from Apple, its biggest rival, in the United States and other major markets.

Ostroff, who joined Spotify in 2018, has built his career from the search for the next big hit in the media world.

He was a programming executive at the Lifetime network in the 1990s. He urged CW to make programs like "Gossip Girl" available on iTunes before they were broadcast on television, to help curb online piracy. And it helped Condé Nast's magazines make the leap to digital video when the format was taking off.

Ostroff got into the world of podcasts on Spotify when younger generations were approaching the format. He has continued to seduce young listeners through podcast agreements with social media influencers such as American Addison Rae. But Ostroff says the podcast audience is also growing within Spotify's existing base.

The company has noted that in June 21% of its 299 million monthly active users, at all levels of subscription and advertising support, interacted with podcasts.

The Ostroff team is looking for more free spaces within the audio world that Spotify can control.

Since the pandemic, Spotify has experienced an increase in listening to "chill music," children's music and podcasts, and wellness-related podcasts, Ostroff says. He also commented that users are increasingly using smart speakers and video game consoles, but that it is too early to know whether these trends will persist after the pandemic.

"I don't know if we've learned enough to say, 'Okay, we can look back,' " Ostroff says. "But we have seen great growth in certain areas that have definitely been caused by the pandemic."

Spotify's large acquisitions and deals with personalities have given the company space in different categories of podcasting. The purchase of Parcast helped the company take over the rapidly growing category of real crimes. And The Ringer expanded Spotify's library of sports programming and pop culture.

Spotify has claimed that in June it had more than one and a half million podcast programs, including more than 300 original or exclusive programs outside the United States.

Personalities with a large number of followers, such as Michelle Obama, who was one of the first great creators that Ostroff signed up after joining the company, have helped legitimize podcasting also to large advertisers.

The Obama podcast attracted brands such as Salesforce and P&G. Ostroff also points to Omnicom Media Group, one of the world's largest ad agency groups, which in July announced that it would spend $ 20 million on Spotify podcast ads in the second half of 2020.

"Having them on the platform is significant for our growth," says Ostroff. "Even for advertisers, it has been a significant change."

Powered by podcasts, Spotify's ad business, which Ostroff also runs, grew 25% in 2019 (and 30% the year before). The company has noted that advertising revenue fell 21% year-on-year during the second quarter of 2020 due to the pandemic.

Podcast audiences are growing in the United States, according to Edison Research, which estimates that about 100 million people listen to podcasts monthly. Although recent market share estimates have been the subject of some debate, Spotify and its big rival Apple are considered to be the biggest players in the industry.

Spotify is also trying to outperform its competitors, especially Apple, by innovating in advertising technology.

Ostroff says that advertising in podcasts still faces major obstacles in terms of measurement, audience segmentation and advertising.

He argues that the industry lacks a unified metric and tools for advertisers that are common in other digital formats, but not in audio. This year, Spotify introduced streaming ad insertion technology that allows advertisers and podcasters of its original and exclusive programs to access ad impressions, anonymous demographic statistics and other data, for example.

"It's something you get on other digital platforms, so it makes all the sense in the world that they also have it on audio, however, it hadn't been done before," says Ostroff. "One of the things we've focused a lot on the advertising side is to create a different kind of experience for advertisers, that they can focus on, that they can understand the consumer, that they can listen to their ad, that they can find their customers."

Spotify content advertising director explains company plan

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