Spotify will acquire Arlington, VA-based podcast ad platform Megaphone, as the streaming platform aims to capture more ad revenue.
According to the Los Angeles Times, the $235-million purchase of Megaphone “is one of the largest podcasting deals Spotify has made to date. The company has spent hundreds of millions of dollars acquiring podcast production businesses, including New York-based Gimlet Media (the makers of the popular “Homecoming” series) and L.A.-based the Ringer.
“Megaphone will help increase Spotify’s ad revenue. The market for podcast advertising is expected to grow at a rate of 14.7% to nearly $1 billion this year, according to the Interactive Advertising Bureau Podcast Ad Revenue Report prepared by PwC.
“Megaphone helps advertisers target 60,000 different audience segments such as millennial women across various podcasts. The company says more than 20,000 publishers and advertisers use its platform
“Earlier this year, Spotify announced new advertising technology that would track how often a Spotify podcast listener heard an ad and what its reach was. After the acquisition closes, publishers that use Megaphone will have access to Spotify’s ad technology.
“The technology will bring more relevant ads to podcast consumers, said Jay Richman, Spotify’s vice president of global ad business.
““The more monetization comes into the industry, the more that can be reinvested in amazing content, which in turn will result in a better overall listener experience,” Richman said in an interview.
“Megaphone has about 70 employees and is owned by Graham Holdings Co.”