Spotify poised to dominate podcast advertising

Spotify advertising raked in $450 million in the fourth quarter of 2021, representing 15% of the company's total revenue - the highest mark to date for the growing business segment.

Despite the impressive growth in advertising, the market crushed Spotify following its earnings release after the company forecasted slowing premium subscriber growth. Spotify stock fell nearly 23% in after-hours trading following the release.

Spotify only expects to add three million new users in Q1 2022, a stark contrast to the average of 6.6 million premium users added a quarter since the beginning of 2020.

Despite slowing premium subscriptions, nobody should ignore the podcast advertising opportunities ahead of Spotify.

Podcasting advertising spend across all platforms topped $1.3 billion, and that figure could double by 2025 to $2.74 billion. Spotify CEO Daniel Ek has positioned his company to capture a sizeable chunk of that revenue with unique offerings previously unavailable to podcast advertisers.

Podcast advertising before Spotify

Before Spotify jumped headfirst into podcasting, Apple reigned as the top dog. Spotify only recently passed Apple in October 2021 as the most used podcasting platform in the US.