Brief:

• Omnicom Media Group and Spotify announced an agreement Wednesday that will give the agency holding group and its clients special access to the audio streaming platform's new innovations around podcasts, including ad products, audience data and exclusive content, according to details shared with Mobile Marketer.
• The deal for $20 million begins today and lasts through the remainder of the year, marking the largest strategic podcast advertising partnership of its kind to date, the companies said. Together, Omnicom and Spotify will produce joint research and best practices for podcast advertising, touching on areas like targeting, reporting and measurement. Spotify's in-house Creative Solutions unit will also create custom audio solutions for Omnicom.
• Omnicom manages around $35 billion in global media spend annually on behalf of its clients, which include advertisers like Procter & Gamble, AT&T, Activision, McDonald's and State Farm.

Insight:

Omnicom's $20 million podcast deal with Spotify is a notable mark of maturation for the audio streaming format, whose star has continued to rise as mobile-oriented, on-the-go content continues to command consumer attention. In its scope and price tag, the agreement edges podcast spending a step closer to the type of upfront commitments that advertisers and their agency partners typically put toward more traditional media channels with a broader reach.

Many of those channels, namely linear TV, saw their plans upended as the novel coronavirus led to the mass cancellation of events like live sports and the shuttering of regular studio production, which could help explain why Omnicom is making a bigger bet on podcasting now. But Spotify has also made a serious push to establish a foothold as one of the most formidable podcasting players in a relatively nascent market, striking a number of potentially lucrative deals over the past year that advertisers are likely interested in.

Last month, Spotify formed a multiyear partnership with Warner Bros. and DC to carry scripted podcast series based on the comics imprint's superheroes. In May, Spotify also signed a multiyear licensing agreement to exclusively broadcast "The Joe Rogan Experience," one of the most popular podcasts in the world that last year claimed it drove 190 million monthly downloads. And earlier this year, the company bought the entirety of Bill Simmons' The Ringer network for $196 million in cash, per Axios, building on prior acquisitions of Gimlet Media and the production studio Anchor.

With the expanding slate of podcast content has come ad products tailored to the podcast listening experience. At the start of the year, Spotify introduced Streaming Ad Insertion (SAI) technology that provides data on ad impressions, frequency and reach, along with listeners' age, gender and device type. Spotify plans to make SAI more widely available to advertisers in the U.S. this summer, and recently introduced an ad format, In-App Offers, in alpha as part of the produce suite. In-App Offers leverages SAI to help listeners more easily redeem deals they hear about during audio-only podcast moments.

Omnicom and its lead media agencies, Hearts & Science, OMD and PHD, will now get early access to similar offerings as Spotify continues to try and innovate and improve results, measurement and targeting for advertisers running podcast campaigns.

"With its landmark content deals, established audience, and breakthrough tools that make podcasting addressable, Spotify has become the premier player in the category," Catherine Sullivan, chief investment officer at Omnicom Media Group North America, said in a press statement. "This endeavor exemplifies Omnicom Media Group's commitment to assuring first-mover competitive advantage for our clients through best-in-class partnerships."

Other media companies are ramping up acquisitiveness in the podcasting space, looking to capitalize on a medium that reached 104 million listeners in the U.S. earlier this year. The Wall Street Journal this week reported that Sirius XM is closing in on a deal to buy the Stitcher podcast division of E.W. Scripps for roughly $300 million.