Spotify, the world’s leading music streaming service, has unveiled a new campaign to win more advertisers. The company is offering $100 million in advertising opportunities for brands who are willing to advertise on its platform.
Spotify has wrapped up a campaign to win more advertisers. The company has released an analysis of the campaign’s success and what they learned from it.
Spotify Technology SA has launched its first worldwide brand campaign aimed at attracting advertisers as the audio streaming giant seeks to increase advertising income.
In an effort to attract small and medium-sized companies outside the big brands it has historically concentrated on, the firm is renaming its advertising business Spotify Advertising from Spotify for Brands. It’s also attempting to get more podcast publishers and producers to join its ad marketplace after admitting earlier this year that restricted inventory was limiting its advertising growth.
“It’s not only about the biggest brands and programs; it’s also about small and medium-sized companies and DIY creators,” said Jay Richman, vice president and head of Spotify’s worldwide advertising strategy and platform.
The campaign will use digital video, social media, and audio advertising on and off Spotify in regions such as the United States, Canada, the United Kingdom, Australia, Spain, and New Zealand. “Reach the most immersed audience,” the ads say, showing individuals strolling or floating around in bubbles.
On the campaign, the firm collaborated with FCB New York, a division of Interpublic Group of Companies.
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Spotify is on the verge of overtaking Apple Inc. in terms of podcast listenership. According to research company eMarketer, Spotify is on track to have 28.2 million monthly podcast listeners by the end of 2021, surpassing Apple’s anticipated 28 million.
According to the Interactive Advertising Bureau, ad income from podcasts in the United States increased 19 percent to $842 million in 2020, is expected to exceed $1 billion this year, and will approach $2 billion by 2023. According to Edison Research and Triton Digital, 116 million Americans, or 41% of the people over the age of 12, listen to podcasts on a monthly basis, increasing from 37% in 2020.
Spotify, which started out as a music-streaming service, has rebranded itself as an audio business in recent years, with significant investments on podcasting and live audio, including agreements with Gimlet Media and Bill Simmons’s the Ringer, as well as a $100 million-plus license deal with Joe Rogan.
Spotify has also set out to reinvent podcast advertising, which has traditionally assessed audience size by the number of times episodes have been downloaded. However, this does not show if someone really listened to an episode or whether they missed the commercials.
Spotify started inserting advertisements through streaming last year, claiming that this allowed it to monitor ad impressions, audience demographics, and other data more accurately. Megaphone, a podcast advertising platform, was purchased by it. It also launched the Spotify Audience Network earlier this year, which allows marketers to target specific demographics across Spotify’s own content and others, rather than just purchasing by the program. It claims that this has helped it quadruple the amount of podcast inventory it can sell.
“‘Our aim is to start competing with Snap and Twitter and to meet the demands of advertisers, especially small companies,” says the company.
— Spotify’s chief content and advertising business officer, Dawn Ostroff
In the second quarter, advertising accounted for 13% of Spotify’s income, up from 7% a year before. In July, Chief Executive Daniel Ek stated, “We’re now seeing the ad-supported side break through and become a major revenue generator for the company.”
Revenue from the company’s advertising sector more than doubled in the quarter compared to the same period a year ago, with podcast ad revenue more than sevenfolding.
Spotify’s chief content and advertising business officer, Dawn Ostroff, said, “Our aim is to start to truly compete with Snap and Twitter and deliver on the expectations advertisers have, especially small companies.”
According to Collin Colburn, a senior analyst at Forrester Research Inc., marketers have long regarded Spotify as an emerging player in the wider media and marketing landscape, but as streaming music and podcast listening have risen in popularity, it has become one of the main platforms they utilize.
According to Eric Schmitt, a senior director analyst at research company Gartner Inc., one difficulty for audio ad networks is proving the return on advertisers’ investment.
“It’s harder to connect the dots measurement-wise when you can’t click on anything straight away, or when you’re following up on an ad you heard via one medium through another,” Mr. Schmitt said.
Spotify has announced that it is testing technologies that allow users to directly interact with ad offers inside the Spotify app in order to improve ad measurement precision. Mr. Richman said that this “gives the marketer a lot more clear link between their ad expenditure and their return on an investment.”
Mr. Schmitt believes Spotify’s attempt to recruit smaller firms, which has proven successful for companies like Facebook Inc., may encounter some challenges.
“That’s becoming a more difficult sector to penetrate, since mom and pops use Facebook, and everyone uses Facebook,” he added.
Megan Graham and Anne Steele can be reached at [email protected] and [email protected], respectively.
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Spotify has started a campaign to win more advertisers. They wrapped their case study up in this article which is the first of its kind. Reference: spotify wrapped campaign case study.
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