Illustration: Sarah Grillo/Axios
Spotify and Omnicom Media Group, one of the world's largest global ad agencies, announced Wednesday a deal that will see Omnicom spend $20 million on podcast ads in the second half of this year.
Why it matters: Most podcasts are typically bought and sold on a per-show or per-episode basis. A big agency's commitment to spending lots of money on podcast ads upfront, like they do with television, is a signal that the industry is growing.
- As a part of the deal, clients of Omnicom's ad-buying agencies — Hearts & Science, OMD and PHD — will have "first-mover access" to exclusive Spotify podcast content.
- The deal also includes the development of joint research and best practices around podcast ad targeting, performance reporting, and measurement solutions.
The big picture: The announcement comes on the heels of several major content deals brokered by Spotify over the past few weeks, which speak to the music streamer's commitment to growing its podcast business.
- At the same time, Spotify's music and radio rivals are also trying to strike deals to expand their reach into podcasts.
- SiriusXM is nearing a deal to buy podcast company Stitcher from E.W. Scripps for around $300 million, per the Wall Street Journal. Two weeks ago, it acquired the popular podcasting platform Simplecast — and it already owns podcast ad company AdsWizz, which it acquired through its purchase of Pandora in 2018.
- Amazon has also shown interest in expanding its podcast offerings and advertising business.
Be smart: Scripps bought Stitcher just four years ago for just $4.5 million, speaking to the enormous growth potential ahead for the industry.
- While podcasts are only expected to bring in less than $1 billion in revenue this year, it's the fastest-growing advertising medium by far.