Spotify’s about to know way more about what podcasts you listen to, even if you don’t use Spotify,

Spotify’s highway to podcast dominance began overtly sufficient: a whole bunch of tens of millions of {dollars} spent directly to purchase a revered podcast community, Gimlet Media, and a podcast creation app, Anchor. Now, almost two years later, the corporate’s persevering with to spend, however this time with its sights set on conquering the podcast advert market.

Yesterday, the corporate introduced it spent $235 million to amass Megaphone, a podcast internet hosting firm that additionally inserts and sells dynamic adverts for podcasts. The acquisition, although massive, isn’t as flashy as among the firm’s different offers, but it surely units Spotify as much as change into a power in podcast advert gross sales. With Megaphone, Spotify needs to dominate podcast promoting and change into the primary advert vendor for reveals each inside and out of doors its community. This might have repercussions, not only for the place and the way advertisers and podcast networks spend cash, but in addition for a way a lot Spotify is aware of about listener conduct each inside and out of doors its platform.

Podcast adverts have change into more and more subtle and might be swapped out and in primarily based on who’s listening and what advert offers are energetic. Dynamic promoting, as that is known as, was an enormous change from static podcast adverts that had been constructed right into a present perpetually. Now, podcast adverts act extra like the net — a rotating solid of adverts focused to an individual primarily based on what wants an viewers that day. Nonetheless, the focusing on for these is restricted by a scarcity of consumer knowledge. At most, the internet hosting companies know the place listeners are primarily based, what sort of system they’re listening on, and the app they’re utilizing to pay attention. This completely adjustments with Spotify.

Spotify is aware of listeners’ names, billing info, the place they dwell, their age, what music they like, the opposite reveals they take pleasure in, who they’re buddies with on Spotify, what gadgets they use, and loads of different knowledge. It’s nonetheless not as a lot as Fb or Google find out about individuals on-line, but it surely’s considerably extra info than podcasters have beforehand recognized about their viewers.

Naturally, Spotify harnesses this knowledge to promote and insert adverts by way of its proprietary Streaming Advert Insertion (SAI) expertise, which debuted in January for its personal inside reveals. These adverts are inserted in actual time versus being swapped out forward of a pay attention, which means Spotify’s system makes dwell choices about which adverts a selected listener ought to hear primarily based on their knowledge and likewise primarily based on the targets of the varied advert offers Spotify is at present operating.

With the Megaphone deal, SAI will probably be provided to reveals outdoors the Spotify community, so if advertisers or third-party podcasts need to have the ability to successfully attain Spotify’s 320 million month-to-month listeners, they’ll need to pay Spotify to take action, whether or not which means going to Spotify’s advert gross sales staff and asking to be slotted into reveals or by internet hosting a podcast on Megaphone to realize entry to SAI. Spotify will get paid even when it doesn’t promote a present’s adverts as a result of it nonetheless gives distribution companies. (Spotify isn’t the one firm making an attempt to personal the distribution, internet hosting, and gross sales arms of podcasting; iHeartMedia and SiriusXM are, as properly.)

Proudly owning a internet hosting service additionally offers Spotify unprecedented entry to knowledge about different networks’ reveals. Solely a community and their internet hosting supplier know what number of downloads a present receives, the place their listeners are primarily based, and usually, how episodes carry out. Now Spotify may have that knowledge, too. Megaphone at present says ESPN is a consumer, for instance. This implies Spotify might understand how ESPN podcasts carry out, which is coveted info particularly on condition that Spotify owns The Ringer, which CEO Daniel Ek mentioned the corporate acquired to construct the “new ESPN.”

Since totally coming into the podcasting house in 2019, Spotify has spent upward of $500 million on buying firms, and stars like Joe Rogan, Kim Kardashian West, and Michelle Obama, within the house. It now owns a podcast creation app, a number of profitable networks, and a podcast participant. With Megaphone, it additionally possesses a internet hosting service and efficient advert community. It’s setting itself as much as be an integral a part of the podcast ecosystem that outdoors networks should have interaction with finally.

To drag this off, Spotify has to make SAI engaging sufficient that podcasters are keen to alter internet hosting networks simply to get its extra particular advert tech, and advertisers are keen to modify who they purchase from for that very same entry. To get to that time, Spotify must change into the most well-liked place individuals pay attention, particularly stream, everywhere in the world, which it seemingly hasn’t pulled off but. Apple would possibly nonetheless maintain the highest listening place, at the very least within the US, though if Spotify retains securing unique offers, it’d power listeners to transform.

That’s the by way of line in all of Spotify’s offers, forcing individuals to make use of its service for entry, whether or not that be entry to advert expertise or sure reveals. All of us would possibly find yourself having to make use of Spotify whether or not we prefer it or not.