Brief:

• Unilever and T-Mobile are working with GroupM as part of the WPP media agency's exclusive sponsorship of new iHeartMedia podcasts from TV producer Shonda Rhimes, creator of "Grey's Anatomy" and "Scandal." Rhimes' media company, Shondaland Audio, is producing three original podcasts that debut on the network this month, according to a press release.
• "You Down?" with comedy troupe Obama's Other Daughters, true-crime series "Criminalia" and "Go Ask Ali," hosted by actress Ali Wentworth, make up the programming slate. Future Shondaland Audio shows include scripted dramas "#Matter" and "American Coup" and documentary series "Black Girl Lost." IHeartMedia also will stream companion audio shows for Shondaland’s series on ABC and Netflix, including "Bridgerton."
• As a result of the deal between iHeartMedia and GroupM, the agency's clients will have exclusive access to Shondaland's podcast programming. IHeartMedia has plans to stream more podcasts produced by Shondaland over the next couple of years.

Insight: 

Unilever and T-Mobile joining GroupM's exclusive sponsorship of iHeartMedia podcasts from Shondaland comes as marketers are developing strategies to better support multicultural programming that's more likely to resonate with younger audiences. The partnership also offers another sign that major brands are investing more heavily in podcasts, the streaming audio medium that has seen an outpouring of dealmaking this year. 

Gen Z is the most ethnically diverse demographic group in U.S. history, and their growing clout as consumers will profoundly affect the way marketers develop advertising strategies that promote inclusion. By sponsoring podcasts from Shonda Rhimes, the first African American woman to produce a top 10 network series with "Grey's Anatomy," Unilever and T-Mobile can potentially reach a diverse audience.

"This partnership serves as added reinforcement of our priority to elevate multicultural voices — audiences and programming talent — in direct connection with our previously announced Multicultural Marketplace," Susan Schiekofer, GroupM's chief digital investment officer, said in the announcement.

The WPP agency last month introduced a marketplace to sell ad inventory in more than 300 publishers that reach Black and Hispanic audiences, or that are owned by people of color. GroupM started the initiative to support media outlets that are more likely to be facing financial hardship because of adverse effects of the coronavirus pandemic on media spending.

GroupM's team-up with iHeartMedia comes as more advertisers sponsor podcasts to reach the growing audience for streaming audio. Spending on podcast ads next year will grow 45% to $1.13 billion in the U.S., surpassing the $1 billion mark for the first time, researcher eMarketer estimated earlier this month.

Next year's growth will overtake this year's 10% increase to $782 million as the digital media market recovers from the pandemic. EMarketer projects that podcasting ad spending will continue to grow for several years, including an 18% gain to $1.33 billion in 2022.

That ad spending will likely help companies like iHeartMedia, the biggest owner of radio stations in the U.S., monetize their investments in podcasting. The company in February launched a custom advertising network to help marketers reach its podcast audience. The iHeartPodcast AdSuite has several ad formats and customization tools, and promises better targeting and scale without affecting the listener experience. Services include dynamic and streaming ad insertion and local ad insertion to deliver customized ads in real-time.

IHeartMedia faces growing competition in the podcast market, as companies like Spotify and Sirius XM either acquire podcast production studios and technologies, or license shows from prominent creators. Spotify recently reached a $20 million advertising deal with Omnicom Media Group that gives the agency and its clients special access to the platform's innovations around podcasts. In addition to licensing deals with popular podcasts like "The Joe Rogan Experience" and starting a series hosted by First Lady Michelle Obama, Spotify has expanded its programming by snapping up Bill Simmons' The Ringer network, among other acquisitions.

Meanwhile, Sirius XM, which owns audio streaming pioneer Pandora, last month agreed to buy the Stitcher podcasting division of E.W. Scripps for $325 million, a deal that followed its acquisition of podcast technology startup Simplecast to support producers of streaming audio. In addition, The New York Times last month agreed to buy Serial Productions, creator of the popular true-crime podcast "Serial," to broaden audio programming lineup, which includes the hit news podcast "The Daily."