Spotify was acquiring a podcast startup, Megaphone by $235 million Several media including The Verge reported that Spotify was acquiring Megaphone. Spotify’s making another big podcasting acquisition. This time, it’s […]
Spotify was acquiring a podcast startup, Megaphone by $235 million
Several media including The Verge reported that Spotify was acquiring Megaphone.
Spotify’s making another big podcasting acquisition. This time, it’s buying podcast hosting company Megaphone for $235 million, according to a source close to the companies. The deal doesn’t affect Spotify’s own podcasts — it already hosted its shows on Megaphone — but it does mean more shows will have access to Spotify’s proprietary ad insertion technology, called Streaming Ad Insertion.
SAI functions similarly to typical dynamic podcast ads, which are targeted based on a listener. But in Spotify’s case, the ads are inserted in real time as opposed to being swapped out ahead of a listen. This means Spotify’s system is making real-time decisions about which ads a specific listener should hear based on their data and also based on the goals of the various ad deals Spotify is currently running.
This acquisition means all podcasts currently hosted on Megaphone will gain access to SAI after the deal closes. No other hosting services offer SAI, so if podcasts or advertisers want to target their ads to Spotify’s data and potentially better reach listeners, they’ll have to pay to host their show on Megaphone, or they’ll have to pay Megaphone to distribute their ads. Megaphone has over 5,500 shows hosted on the platform from big publishers like Slate, iHeartMedia, Disney, and Vox Media.
With Megaphone, Spotify now owns a fully rounded-out podcasting ecosystem: a network of exclusive shows, a podcast player, podcast creation software, a hosting company, and its own ad sales team.
Who is Spotify?
Based on its homepage, the company profile of Spotify is described as follows.
With Spotify, it’s easy to find the right music or podcast for every moment – on your phone, your computer, your tablet and more.
There are millions of tracks and episodes on Spotify. So whether you’re behind the wheel, working out, partying or relaxing, the right music or podcast is always at your fingertips. Choose what you want to listen to, or let Spotify surprise you.
You can also browse through the collections of friends, artists, and celebrities, or create a radio station and just sit back.
Soundtrack your life with Spotify. Subscribe or listen for free.
Who is Megaphone?
According to its homepage, company overview of Megaphone is described as follows.
At Megaphone, we’re committed to helping publishers and advertisers make the most out of podcasting. Our technology empowers content creators with the smartest tools to manage their podcast business, and enables brand advertisers to connect with thousands of unique audience segments. Founded in 2015, Megaphone is headquartered in Reston, VA with offices in New York, Chicago, San Francisco, and Los Angeles.
We’re combining years of experience as podcasters with that of our customers to develop innovative technology for the modern podcast ecosystem – and we’re just getting started.
Podcast is the important interface between companies and consumers
In the history of technological advancements, the ways of advertising have been evolved like billboards, newspapers, magazines, books, radio, TV, personal computers, the Internet, smartphone and more. Now, podcast becomes increasingly the important interface to connect consumers with companies.
There are several consumer behavioral models such as AIDMA and AISAS. AIDMA is acronym and describes Attention, Interest, Desire, Memory and Action. Another example is AISAS and it describes Attention, Interest, Search, Action and Share. The important question here is how to cause consumers’ attentions and interests. Of course, it is easier said than done, but we can say that interfaces between consumers and companies are crucial to increase their attentions and interests. For example, nowadays many people enjoy online game by using their smartphone and advertisement is shown during their play. Another example is that worldwide people watch YouTube videos, and see advertisement before main contents. In this sense, smartphones and online services such as games and streaming videos are the interfaces. It goes without saying that podcast is without exception. Therefore, the acquisition between Spotify and Megaphone makes sense a lot.