Spotify is building an Ad Studio and Streaming Ad insertion products, while iHeartMedia announced a marketplace for podcasts.
Despite the pandemic, digital audio has continued to grow, with revenue from major digital audio companies like iHeartMedia, SiriusXM, and Spotify rising in Q1 of 2021. Spotify’s revenue increased by 22% YoY to €2.1 billion, owing toad revenues from podcast and programmatic ads.
SiriusXM's ad revenue increased 24% in Q1, while iHeartMedia's podcast revenue grew 142%. In addition, digital audio companies like iHeartMedia and Spotify are developing new ad formats and measurement and targeting tools for advertisers.
This could propel advertising investments, as advertisers get access to more audio ad products and marketplaces. However, audio companies could face challenges like scaling of live audio, partnerships, and premium content subscriptions, driving the cost of content acquisitions, as most are focused on growing their creator base.
[3 minute read]