Spotify is raking in ad dollars from its podcast offering, as its heavy investment in the medium pays off.
The streaming audio giant said it grew podcast ad revenue 627% year over year in Q2, driven by triple-digit growth at Spotify Studios, which includes The Ringer, Parcast and Gimlet. Spotify doesn’t break out podcast revenue figures, but overall, ad supported revenue grew 110% year over year to €275 million ($324 million).
Megaphone, the podcast ad tech platform Spotify acquired for $235 million in November, is contributing to podcast ad-reveneu growth, as well as exclusive deals with Joe Rogan and the Obamas, the company said.
Spotify now has 2.9 million podcasts on its platform, including a new estimated $60 million licensing deal with the Call Her Daddy podcast, as well as with Dax Sherphard’s Armchair Expert.
Podcast listening hours increased 30% year on year per user in Q2. Total time spent listening to podcasts on the platform increased 95% across Spotify’s user base.
Spotify has spent millions building up its podcast arsenal, starting with its $340 million acquisition of Gimlet and Anchor in 2019. The audio streaming platform then inked a $100 million, three-year exclusive licensing deal with Joe Rogan, bought Bill Simmons’ The Ringer for close to $200 million, acquired Megaphone and continued to strike high-profile exclusive deals with celebrities including Bruce Springsteen and Prince Harry and Meghan Markle.
Overall, Spotify’s revenue in Q2 grew 23% year over year to €2.3 billion ($2.7 billion). Use of Spotify ad studio, its self-service ad buying platform, soared 165% year over year as more ad buyers purchase streaming audio ads programmatically.
Spotify missed expectations on monthly active users, growing 22% to 365 million in the quarter, adding just 9 million users, which it chalked up to Covid-19 disruptions.
(This article first appeared on CampaignLive.com)