Review your alternatives with Spotify and the growing potential in audio marketing

David Linder

David Linder

MSc in Marketing from the University of Salford. Facebook Certified Planning Professional Facebook Certified Buying Professional
7 min read

Three techniques marketers can reap the benefits of dealing with Spotify

When marketers discuss ‘content’ one often thinks of words, images, video, or perhaps a mix of all three, such as for example infographics or interactive visuals. However, recently there’s been a surge of fascination with audio, from the growing popularity in podcasting to the emergence of smart devices.

Amazon Echo popularity

The growth of music streaming, specifically, is a dominant trend around the world, radically changing people’s relationship and consumption patterns with music.  These changes have revealed many interesting insights and also have exposed new opportunities for marketers to attain new and existing consumers in a audio environment.

Spotify and the emergence of audio platforms

Spotify, Apple Music, Amazon, and Tidal are leading the music streaming revolution, however, Spotify may be the clear market leader having an estimated 36% subscriber market share. Also, they are the only real provider whose business design is made to make streaming commercially viable (other providers have giant parent companies that use streaming being an add-on service).

Spotify has really shaped the music landscape during the last ten years and contains been making headlines recently making use of their initial public offering (IPO) on the brand new York STOCK MARKET. Spotify’s IPO was supported by some spectacular statistics:

  • 157 million active users worldwide
  • 71 million premium subscribers worldwide
  • The average customer spends 25 hours per month streaming music
  • Two billion playlists from the library greater than 35 million songs over the globe
  • 58 million monthly active users within Europe, accounting for 37% of its total audience, with a 59% share in the UK

For the united kingdom specifically, Spotify has reported steady year-on-year growth of 29% (22% on mobile) and over 15 million users (10 million on mobile). It’s interesting to notice the audience growth versus other platforms:

Spotify users

One of the major keys to Spotify’s success has been the shift from ownership to gain access to, a phenomenon that may also been observed in the wider sharing economy and beyond, for instance Airbnb (versus hotels), Uber (versus traditional taxis), Funding Circle (versus banks) and Netflix (versus TV/ cinema/ traditional DVD rentals).

In terms of weekly reach, Spotify is arguably the 3rd largest commercial ‘radio station’ in the united kingdom behind Heart (30%) and Capital (32%) within the 18-34 segment, and a sign of the platform’s growing popularity across multiple devices:

Spotify multiplatforms

Spotify’s business design is split into two:

  1. Premium subscriptions – accounted for 90% of total revenue in 2017
  2. Advertising – despite being truly a much smaller section of the business, this grew by 41% since 2016 and sometimes appears as another section of growth and opportunity (you can find 90 million ad-supported users, typically aged between 18 to 34).

Spotify business modelsThree key regions of interest for marketers

Spotify is really a unique channel that advertisers may use to attain their target audiences. There are some specific areas that set Spotify aside from other platforms and offer new opportunities for marketers:

1. Benefit from unique data opportunities

The unique first-party data Spotify has collected implies that advertisers may take benefit of some very unique opportunities. As opposed to a few of the travails Facebook has been experiencing recently, the info Spotify collects is situated entirely on logged in users and will only be utilized for media on the platform itself. Spotify claims to be very protective of its 157 million active users’ data to be able to protect the integrity of the streaming intelligence it gathers on moods, preferences, and listening habits that brands can leverage to create engaging campaigns.

Brands can utilize a variety of different ‘moments’ predicated on activities and emotions from Spotify’s listeners:

Spotify-moods-mindsets-taste

The data Spotify constantly collects on user activity, during the day and across multiple devices, implies that as time passes brands can find out more about their target audiences, revealing insights about their music tastes, platform behaviors, day to day activities and broader interests. Hearing music is an extremely personal experience and for that reason this insight will enable advertisers to generate personalized experiences using data that simply isn’t on any platform.

The unique degree of data Spotify has collected was demonstrated within their own “Thanks 2016: It’s been weird” campaign, where it harnessed both aggregated and individual data to create very clever headlines specific to different locations. It’s a good example of a good clever, engaging solution to of using data to humanize technology:

spotify data to humanise

2. Reach new and diverse audience segments

The data discussed above may be used to unearth new and varied audience segments unavailable on other channels. For instance, along with standard demographics such as for example age, gender, location and interests, Spotify’s streaming intelligence also allows marketers to segment with what people are hearing along with when and how they’re listening:

Spotify audience segments

Marketers can reach demographic and interest-based audience segments, crafted by analyzing their streaming habits and music tastes:

Spotify interest-based audience segments

Spotify are continuing to innovate and offer new answers to reach audiences in places where visual media isn’t possible. THE WEB of Things and the populace of screen-less devices including smart devices imply that voice can be a key operating-system and there’s an appetite to boost the in-car experience and deliver audio ads, verified by first-party data, that may then be utilized to retarget these specific audiences across devices.

Advertisers may also soon be capable of strategically re-engage or exclude audiences reached during the past using Brand Exposure Audience segments:

Spotify Brand Exposure Audience segments

3. Encourage brands to build up their ‘sound’

As other media channels have evolved as time passes, many brands have observed radio only being an effective short-term sales tactic rather than as an authentic brand-building medium. However, the shift from radio to audio, an instant improvement in technology and user experience and a collaborative effort between Spotify, Acast and Global radio to purchase the continuing future of audio imply that that advertisers should think about defining a distinctive ‘sound’ because of their brand should they desire to capitalize on these emerging marketing opportunities.

Whilst logos and theme tunes are essential (something McDonald’s, Motorola and Inte, specifically,r have practiced very successfully), a brand’s sound can be concerning the overall modulation of voice and how that is applied in the context of the music a particular audience is consuming in the moments that matter. It’s necessary to create messages that complements and not interrupt an event with an audio that simply will not fit (look at a pop-themed ad in the center of a grime playlist!).

Spotify genres

The example above is extracted from Snickers’ ‘You’re not you when you’re hungry’ campaign. The brand created some ads in various sounds that could be integrated within different genre playlists so they blended more seamlessly within the music.

Getting started on Spotify

There certainly are a number of various ways to market on Spotify across audio, video and display, in addition to custom solutions including branded and original content and exclusive partner programmes. Spotify give a comprehensive guide, however this is a flavour of the three main areas marketers can begin tinkering with:

Audio

“Reach the proper people, at the proper time, wherever they are”.

People use Spotify to ‘soundtrack their day’ because they move between devices and platforms and there’s a chance to reach an audience with audio ads of these different stages:

Audio ads opportunity

Audio ads are served between songs during active sessions, ensuring 100% share of voice. As well as the audio ad, brands take ownership of a clickable companion display unit so the campaign could be extended and drive traffic to a URL destination:

Spotify clickable companion display unit

Video

In addition to sponsored sessions and video takeovers, Spotify offers ‘branded moments’ video advertising, where listeners are rewarded half an hour of uninterrupted listening after hearing a video message. The brand will ‘own’ the listening session and again has 100% share of voice:

Spotify video message

Display

Spotify’s display offering is comparable to other platforms, with a variety of different formats across desktop and mobile.

Brands may use homepage takeovers, welcome back overlays and leaderboard units, in addition to sponsored playlists, a good method of connecting with audiences on the favourite playlists.

Conclusion

The growth of new and innovative audio platforms, including music streaming, smart devices, podcasting and digital radio, imply that audio marketing is now an extremely attractive area of the marketing mix and a chance for marketers to explore various ways to interact and build relationships consumers.

Spotify specifically provide some really interesting opportunities, built on the trunk of these powerful first-party data capabilities and targeting potential. Advertisers can reach new and diverse audience segments that aren’t available via other channels and create compelling audio content to attain listeners in an exceedingly personalised context – ads could be tailored to specific listeners’ music tastes and served between songs to make sure 100% share of voice.

We’re currently in an extremely interesting time frame when brands could be prompted to revaluate not merely their appear and feel but their sound, too. We often overlook audio branding and the potential of sound whenever we consider ‘content’ but this may be going to change.

David Linder

David Linder

MSc in Marketing from the University of Salford. Facebook Certified Planning Professional Facebook Certified Buying Professional

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