Spotify Buys Megaphone in $235 Million Bet on Podcast Ad Technology

The deal boosts Spotify’s newly-released streaming ad insertion feature for podcasters

Photo: Spotify

Spotify will pay $235 million to acquire Megaphone, a podcast advertising technology company that lets creators monetize their audio content — part of the company’s ongoing bet to dominate the podcast monetization market.

Megaphone is based in Sweden, as is Spotify, but works with clients globally including podcast distributors Slate, iHeart Radio, Cadence13, Marvel and Stuff Media (which produces the popular “How Stuff Works” podcast).

Spotify will purchase Megaphone from its current owner, media outfit Graham Holdings. Spotify didn’t clarify when the acquisition would close and noted, “the transaction is subject to customary regulatory review, and it is business as usual until closing.”

The deal complements Spotify’s existing work on podcast advertising — earlier in the year Spotify launched a technology called Streaming Ad Insertion to better serve podcast listeners relevant ads based on digital marketing data. The company said in a statement Tuesday the preliminary results of this new tech are “encouraging to say the least, and have further validated our commitment to the significant potential of podcast advertising.” Spotify added it plans to make this technology available to Megaphone users once the acquisition closes.

Part of Megaphone’s allure to podcast distributors is its ability to tell if a listener actually heard an ad, listened to part of it, or skipped altogether — which it says makes its marketing more targeted. The platform also links podcast publishers with advertisers to facilitate sales.

“For our publishers this is really exciting because it means we can help you earn more from your work,” Spotify’s vice president of global advertising Jay Richman said in a statement. “Megaphone represents a great path to scaling (streaming ad insertion) to some of the largest podcast publishers in the world. Together we will grow the podcast industry for both publishers and advertisers–all while providing listeners with an increasingly personalized ad experience.”

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