Spotify Acquires Megaphone, A Top Podcast Ad And Publishing Platform, For $235M

Spotify has extended its run of podcast dealmaking, acquiring the well-established advertising and publishing platform Megaphone.

Valued by sources at around $235 million, the deal is the second-largest of 2020 in the expanding realm of podcasting, after the $325 million acquisition of Stitcher by SiriusXM.

The Megaphone Targeted Marketplace will make streaming ad insertion available to third-party Megaphone podcast publishers for the first time. Spotify recently introduced the technology on its own platform, enabling a wider range of brand messages to be woven into more relevant podcasts. Reston, VA-based Megaphone, founded in 2015, works with Vox Media, Slate, the Wall Street Journal and ESPN, among many other clients.

In a July report, the Interactive Advertising Bureau said podcast industry ad revenue was on track to grow nearly 15% in 2020 over 2019 levels despite COVID-19, approaching the $1 billion mark. Early in the pandemic, podcast listening plunged, but it has since recovered in large part as more people have resumed mobile device usage in familiar patterns. An increasing number of vehicles are also equipped with podcast listening in mind.

Spotify, which faces competition from Audible, Apple and other rivals, has made aggressive moves recently, locking up programming from Michelle and Barack Obama as well as popular host Joe Rogan. In 2019 and 2020, it also has acquired Bill Simmons’ digital brand The Ringer as well as more purely podcast-focused companies like Gimlet Media, Parcast and Anchor. Spotify has about 320 million users and 144 million paid subscribers, offering about 1.9 million podcast titles as well as 60 million music tracks.

For podcast publishers, the acquisition also provides financial upside, Spotify said in a press release, by matching their listeners with advertiser demand.

“We are still in the early chapters of the streaming audio industry story, but it is absolutely clear that the potential is significant,” said Dawn Ostroff, Spotify’s Chief Content & Advertising Business Officer. “We look forward to Megaphone joining Spotify on our mission to accelerate smarter podcast monetization for advertisers and podcast publishers powered by a scaled audience and state-of-the-art technology.”

Brendan Monaghan, CEO of Megaphone, added that the two companies’ “shared value in innovation will drive the podcast ecosystem forward around the world.“

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