Spotify signs $20m deal with Omnicom Media Group

• Omnicom Media Group (which owns ad agencies like OMD and PHD, representing companies like McDonald’s, AT&T and PepsiCo) has signed a $20m podcast advertising deal with Spotify. “With its landmark content deals, established audience, and breakthrough tools that make podcasting addressable, Spotify has become the premier player in the category,” says Catherine Sullivan, Chief Investment Officer, Omnicom Media Group North America. See our analysis, below.

  
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What was your most memorable age? Stories of 29, a new podcast hosted by Pixie Lott, finds out. Her first guest is model Coco Rocha.

Tourpreneur, a podcast for tour operators, has hit episode 100 this week. The show attracts listeners in 112 countries.

U-God RAW features Lamont “U-God” Hawkins from the Wu-Tang Clan, the hip-hop group from the early 1990s. You can expect artist interviews, record reviews and celebrity gossip. Their email tells us it “comes out every Wu Wednesday”.

On a Dark, Cold Night claims it’s the ideal podcast for horror-lovers with insomnia; a creepy friend to tell you bedtime/ghost stories. The award-winning show is back for season two, as part of The Sonar Network.

Analysis

On the Omnicom/Spotify deal: $20m sounds like a lot of money for the next six months, but it’s a drop in the ocean when compared to Omnicom’s $35bn annual spend. Indeed, US radio makes around $20bn from advertising every year.

However, this represents a shift for Omnicom, who previously bought podcasts as individual shows. Now, they’re purchasing more in bulk, which lowers their administrative costs as well as gaining more analytics from Spotify’s player.

Spotify’s podcasts are streamed, not downloaded, which offers considerable benefits to advertisers. Creative could include different messages based on time (“Come into McDonalds for breakfast!”), accurate location (“There are five branches here in downtown!”), or even weather (“Cool off with an iced coffee caramel frappe sugar-coma-ccino!”).

Spotify also knows, using the music I listen to or my Facebook connection, how old I am: and offers significant targeting unavailable on other podcast platforms.

Spotify tells us: “The deal also includes the development of joint research and best practices across targeting, reporting, and measurement capabilities, and custom audio solutions produced by Spotify’s in-house Creative Solutions team.”

It’s worth highlighting this portion of their announcement: this is a very clear sign that Spotify wants to own the podcast advertising market. With that estimated to hit $1bn soon, it could make the cost of Joe Rogan seem small in comparison.