Omnicom Media Group has announced that it has committed to spending $20 million to advertise in podcasts distributed by Spotify Technology SA between now and the end of this year.
The deal is the largest strategic podcast advertising partnership of its kind to date, according to the companies.
OMG, a unit of the Omnicom Group Inc. holding company, made the deal both because of podcasts’ rapidly growing audience base and increasing targeting and measurement capabilities, OMG North America Chief Investment Officer Catherine Sullivan told The Wall Street Journal, which first reported the news.
Podcast usage has tripled over the past decade. Podcast advertising revenue leapt 42% to nearly $679 million in 2019, and is projected to surpass $1 billion by 2021, per the Interactive Advertising Bureau.
“With its landmark content deals, established audience, and breakthrough tools that make podcasting addressable, Spotify has become the premier player in the category,” Sullivan summed up in a press statement.
Spotify’s recently signed exclusive multi-year licensing deal to broadcast “The Joe Rogan Experience” — which claims to have generated 190 million monthly downloads in 2019 — was reportedly a major attraction for the agency.
This year has also seen Spotify acquire Bill Simmons’ The Ringer podcast network, for $196 million, and ink a multi-year deal with Warner Bros.’ DC for new exclusive podcast series based on DC characters.
On the advertising front, Spotify early this year launched Streaming Ad Insertion (SAI) technology that delivers data on impressions, frequency, reach and listeners’ gender, age and device information. SAI is set to be opened up to more advertisers starting this summer.
“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,” Sullivan told WSJ.
Spotify also recently launched an In-App Offers ad format that lets podcasters embed promo-code links in episode pages to make it easy to respond to offers in interactive audio ads.
Spotify’s agreement with OMG also includes collaborating on research and first-look rights at new shows for OMG, whose lead media agencies are OMD, Heart & Science and PHD.
In total, OMG manages about $35 billion in media spending per year for clients including McDonald’s Corp., PepsiCo, AT&T Inc., Procter & Gamble and State Farm.