Omnicom Media Inks Podcast Advertising Deal with Spotify

Omnicom Media Group (which owns ad agencies like OMD and PHD, representing companies like McDonald’s, AT&T and PepsiCo) inked a $20 million podcast advertising deal with streaming giant 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.

This deal represents an about face for Omnicom, because the company previously bought podcasts as individual shows. With this deal, they’ll be 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 collects and collates a trove of user data and offers more targeted advertisements than other podcast platforms

“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, ” says Spotify in its release about the deal.

As a part of the deal, clients of Omnicom's ad-buying agencies — Hearts & Science, OMD and PHD — will have "first-mover access" to exclusive Spotify podcast content.The deal also includes the development of joint research and best practices around podcast ad targeting, performance reporting, and measurement solutions.

The announcement comes on the heels of several major content deals brokered by Spotify over the past few weeks, which reinforce the music streamer's commitment to growing its podcast business.

While podcasts are only expected to bring in less than $1 billion in revenue this year, it's the fastest-growing advertising medium by far.

In related podcast news, Spotify's music and radio rivals are also trying to strike deals to expand their reach into podcasts.For example, SiriusXM is nearing a deal to buy podcast company Stitcher from E.W. Scripps for around $300 million, according to The Hollywood Reporter

Two weeks ago,  SiriusXM acquired the popular podcasting platform Simplecast — and it already owns podcast ad company AdsWizz, which it acquired through its purchase of Pandora in 2018.

In news that could shake up the entire podcast industry, Amazon has also expressed interest in expanding its podcast offerings and advertising business.

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