Podcast advertising is growing faster than any other segment in U.S. media, and that’s fueling a battle among measurement players nearly as contentious as in TV, a market more than 30 times bigger.

Spotify's acquisition earlier this year of two of the biggest measurement and analytics firms in the space—Podsights and Chartable—is shaking up podcast measurement. Such a deal would seemingly wipe out meaningful competition in a market this size, but since then it’s actually fueled more interest in competitors Podtrac, ArtsAI and Claritas, among advertisers that demand independent measurement.

Regardless of how it’s measured, the market is exploding. The IAB reports at the kickoff of its Podcast NewFronts that podcast ad revenue rose 72% in 2021 to $1.4 billion, twice the 35% pace of total internet ad spending, and faster even than the broader streaming audio market, which was up 58%. The IAB projects podcast ad revenue will hit $2 billion this year, and then double to $4 billion by 2024.

Even so, podcast spending remains less than a third of overall digital audio, under 2% of overall digital spending and less than 10% of the total $16 billion audio market, as estimated by Magna.

Small market, big competition

But while the roughly $11 billion radio market has only one substantial measurement player—Nielsen—podcast measurement has at least five, even if the two biggest are now owned by Spotify, whose acquisition goes against the grain of an ad industry that for years has pushed back against media sellers grading their own homework.

“We’ve seen a groundswell of demand since Spotify bought Chartable and Podsights from advertisers who don’t want them grading their campaign performance,” said Chase Miller, executive VP of strategy and corporate development of Claritas, an analytics firm. That adds to the growth Claritas already was seeing based on its ability to graph listener identities by linking household IP and postal addresses, and a methodology focused on measuring ad listenership rather than simply downloads or attribution linking downloads to sales, Miller said.

“Any diligent marketers” are going to have concerns about an industry player “grading their own homework,” said one agency executive. But he added that Spotify’s move appears motivated by building better measurement and attribution within its own walls to benefit advertisers, some of which are small and medium-size businesses that were never likely to pay for third-party audience measurement or attribution anyway.

ArtsAI, an artificial intelligence-enabled attribution provider with substantial business in podcast measurement, has also seen an uptick in that business since Spotify announced its acquisitions, said Chief Revenue Officer Erik Lundberg. He expects his podcast measurement business to grow 400% this year.

But Lundberg sees a wide range of advertiser responses. Some marketers and agencies love Podsights and Chartable and are glad they’re going to get more resources as part of Spotify, he said. Another group is concerned that some Spotify competitors may no longer let their inventory be measured by Spotify-affiliated firms, so they’re looking for alternatives. “The third group [is] adamant right now that they want independent third-party measurement and are reaching out to companies like us,” Lundberg said.

Even so, he doesn’t want to slam Spotify, which continues to work with independent firms like ArtsAI, he said, “because there are hundreds of millions of dollars flowing through Spotify from agencies and marketers who require independent third-party measurement.”

Mark McCrery, founder and CEO of podcast measurement firm Podtrac, which provides download and ad measurement for publishers and advertisers, has likewise noted an increase in advertiser interest in his firm since Spotify’s acquisitions. So far, he said he’s seen no indication Spotify will do anything to make it harder for measurement rivals to operate.

“We’re focused on accelerating innovation in audio to help grow and deliver impact for advertisers, publishers and creators of all sizes,” said a Spotify spokesperson. “This requires continued investment in first-party and third-party measurement for podcasts, which we believe will help advertisers meaningfully evaluate the impact of their campaigns and help publishers better understand their audiences. Our belief is that by doing so, we’ll make quality measurement even more accessible and the entire audio ecosystem both on and off Spotify will benefit.”

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Sell-side outlook varies

Many publishers are likely to stick with Chartable, which Spotify is merging into its broader Megaphone service suite, and Podsights, despite advertiser concerns.

A podcast publisher executive that has long worked with both companies plans to stick with them, in part because the company is comfortable with their privacy compliance standards and support for both RSS feed and dynamic ad insertion measurement, the former being far less labor-intensive for the publisher.

“I think it’s a really smart, strategic move on Spotify’s part to take these two largest attribution companies off the marketplace,” he said, “because now they control that.”

Clearly, having a competing distributor own a measurement firm that might be used as currency in media deals creates issues for Pandora and SiriusXM. But Keri Degroote, senior VP of research & analytics for SiriusXM, said a broader issue is leading the company toward alternative providers.

“We were already looking at vendors that could measure across our whole ecosystem and all of our platforms,” Degroote said, including streaming audio, on-platform, off-platform and broadcast, rather than ones that are only podcast focused. “If we’re selling it cross-platform,” she said, “we want to be able to give one measurement solution.”

While TV and radio measurement long have been monopolies, or nearly so, the heated competition in podcast measurement is a good thing, said Paul Riismandel, senior director of marketing and insights at SiriusXM. “I’ve always had a philosophy of never putting all your eggs in one basket,” he said.

Degroote said SiriusXM uses different measurement and attribution vendors for different tasks based on client needs.

Historically, podcast advertising was dominated by direct-to-consumer advertisers focused on attribution, which was sometimes based on linking sales impact to downloads rather than ad exposure. But the space increasingly is attracting money from bigger brand advertisers more interested in ad impressions and audience numbers that can be fed into marketing-mix models, said executives in the space.

IRI has worked with packaged goods clients using Podsights data for multi-touch attribution, but more recently has done three integrated measurement projects for clients using Claritas podcast measurement, said Jennifer Pelino, executive VP of global media. Marketers, she said, “don’t feel like someone else should be grading their own homework constantly, so they come to us to see if we can do that integration.”