Brief:

• Spotify announced a new podcast-specific advertising format that leverages the Streaming Ad Insertion (SAI) technology the platform introduced earlier this year, according to details shared with Mobile Marketer.
• Now in alpha, In-App Offers act as a visual reminder to help Spotify users claim offers they previously heard in audio-only moments, such as when cooking. Once listeners restart an episode of a podcast, an offer card will appear under the "Episode sponsors" banner. The asset automatically includes details for redemption, including coupon codes and vanity URLs, meaning users don't need to remember or manually input that information.
• Shaving brand Harry's is piloting the feature in the U.S. through "The Last Podcast on the Left" program, which became a Spotify exclusive this year, while HelloFresh is doing the same in Germany on the show "Herrengedeck."

Insight:

Spotify is looking to solve a friction point for podcast listeners and advertisers by automating offer redemption. The news means that listeners no longer need to write down or remember specific details they hear during ad reads, and that they will be served new assets that link out to advertisers' websites to complete an action once they restart their sessions and are more engaged with their screen.

The new format is a direct response-minded product that could be appealing to brands that are interested in the booming audio space, but don't have many ad tools that are centered on performance or driving an action. Harry's and HelloFresh alpha testing In-App Offers shows how the format might resonate most with upstart direct-to-consumer (DTC) brands that rely heavily on podcasts to grow awareness and sales.

DTC and financial services marketers have played an outsized role in supporting the podcasting explosion in recent years, helping to drive 53% of the channel's media growth between 2017 and 2018, according to findings published last year by the IAB and PwC. Podcast ad revenue is expected to reach $1 billion by 2021, the groups projected at the time, though those numbers could be offset by the economic reverberations of the coronavirus pandemic.

Podcast consumption and revenue have been disrupted by the public health crisis, as typical listening occasions, such as commutes, grind to a halt. But Spotify has stayed busy building out its podcast content stable and reinforcing its suite of media properties with more robust advertising tools.

Launched in January, Spotify's SAI technology provides advertisers with confirmed ad impressions, audience insights, creative insights and measurable outcomes based on confirmed ad exposures — a depth of data that the streamer claims isn't available elsewhere in podcasting. Spotify plans to make SAI more widely available to advertisers in the U.S. this summer, and early test partners like Puma have reported strong results.

Spotify could draw more brand dollars as it continues to strike high-profile deals in the podcasting space. Last week, the streamer reportedly reached an agreement with Kim Kardashian West to exclusively carry a podcast co-produced by the celebrity around criminal justice, while nabbing the rights to scripted programming around DC superheroes as part of a multiyear agreement with Warner Bros. and the famed comics publisher.

In May, Spotify also secured streaming exclusivity for Joe Rogan's massively popular show — tie-up reportedly worth north of $100 million — and it acquired Bill Simmons' The Ringer, a publisher focused on a mix of sports and pop culture content, back in February.