7 Reasons to Start Advertising on Spotify

Posted at Aug 7, 2017 12:59:00 PM by THAT Agency | Share

As marketers, it’s our job to deliver valuable messages to the right people at the right time in a way that drives business results.  Easy, right?  Well, not really.  With the radio, tv, social media, and number of internet connected devices sky-rocketing reaching people has never been easier.  However, making sure you’re reaching the right people with the right message is where it becomes increasingly difficult.

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So how does Spotify fit into all of this?  In the last couple years, the Swedish based company has increased focus on generating revenue through selling ad-space for businesses who wish to broadcast their message via the popular streaming service, and it’s only expected to increase.  This post will highlight 7 reasons why Spotify should be a part of your marketing strategy.


140 Million Monthly Active Users

In the last 5 years, Spotify has increased their monthly active users from 15 million to 140 million (with a 40 million increase in the last year alone).  While there are 60 million premium customers that aren’t served ads because they pay for the service, this leaves a market of 80 million ears to deliver your message to.  I’ll also explain a way you can get your message to the paying subscribers a few scrolls down the page.

Advertising on Spotify | THAT Agency

Unlike radio where people are focused more on avoiding a car crash or the day they had at the office, Spotify’s listeners are extremely engaged.  They’re listening to their favorite tunes wherever and whenever they want, not just putting something on because it’s something to listen to.

According to Spotify’s data, the average listener spends 148 minutes streaming music or podcasts each day.  Data also shows that users are listening from the time they wake up in the morning until they’re ready to hit the hay.  Users are streaming the content they want, when and where they want it, allowing you ample opportunity to tell them about your awesome product or service.


Integrated User Experience

If you’re consistently trying to connect and engage with millennials, then advertising on Spotify is a great option for you.  Not only are they their own segment that you can target specifically, (which I don’t suggest….go deeper!) but they grew up with music being readily available at the click of a mouse or tap of a finger.  They’re the iPod generation, and Spotify doesn’t have a song limit.

Advertising on Spotify | THAT Agency

Spotify is also an integrated social platform.  Users can link their account with Facebook and Twitter to share their favorite tunes with the world as well as discover what their friends are listening to. 

Integrating with these social platforms allows you to grow your business across your digital channels.  Deliver an ad relevant to the playlist they’re listening to and give them an incentive to follow your social account.  Spotify is increasingly mobile which enables listeners to quickly switch between apps and check out your page without missing a beat…literally.


Ear Time is Limitless

In other words, people listen to music to make doing other things better.  It puts them in a better mood and enhances whatever task they have their sights set on achieving.  This could be working out, grocery shopping, studying, or writing a blog (yes, I’m rockin’ out to some Spotify).  The point is, people are streaming music more and more because it makes them comfortable, and stats show that 52% of the online population listens to digital audio.

Advertising on Spotify | THAT Agency

People like music, and it doesn’t stop them from living their life.  Spotify is home to thousands of playlists that are tailored to certain situations, lifestyles, moods, genres, and more.  You name it, you can probably find a playlist about it.  Have a fitness product?  Enhance their workout by showing how your product will make their workout better.

Music makes people feel, and these types of playlists generally make people feel a certain way.  Tailor your ad to how the music makes them feel and you’ll be able to connect with them in the moment.


Data translates to Revenue

Here’s a fun little activity.  Check out spotify.me and log in to your Spotify account.  Check out what type of listener you are.  This is Spotify’s data profile for you.  It has your favorite artist, band, how many minutes you’ve streamed, your favorite tastes in music, and even the average tempo you jam out to. 

Advertising on Spotify | THAT Agency

So why is this valuable to you as a business?  Think about it this way, there are over 140 million different pages just like the one you just looked at, all with different information.  As stated earlier, music makes you feel, and in a sense you are what you listen to.  This data is an invaluable source to target and segment your audience so you can make sure you’re delivering them a relevant and contextual message.

This is just the surface level of Spotify’s data mission.  They’re dedicated to understanding people through music.  Since music is uniquely emotional and universal, the data available from streaming it to this many people will give insight into other types of consumption such as movies and TV. 

Similar to Google, Spotify is dedicated to delivering users a relevant experience, only instead of searching the web it’s music.  With all the information Spotify collects, it allows brands to deliver extremely personalized ads that catch people in the right moment.  The “right time” aspect of how I started out this post.


Upcoming Direct Listing on New York Stock Exchange

Advertising on Spotify | THAT Agency

In the last couple weeks, Spotify has made a huge step as a business and announced its upcoming direct listing on the New York Stock Exchange.  You can read about the specifics about it here, but with the company going public, we can expect advertising to boom on the music streaming service.   

Until recently, advertising on Spotify hasn’t been responsible for a large percentage of their income.  This will most likely change especially the way they’ve been growing and the research they’ve been undertaking.  Not only this, but it will boost revenue and provide stakeholders with a generous return on investment. 

Expect Spotify to become a part of your competitors marketing strategy as the platform continues to grow, collect user data, and incorporate AI technology into their software to deliver personalized music experiences across the world.


Changes in Consumer Behavior

People change.  Sometimes it’s for the better and this is one of those times.  People are generally getting used to advertisements on streaming devices.  They’ve accepted the ads on YouTube before the video.  They expect messages to be sponsored by a brand and don’t feel as though it takes away from their overall experience as much as they used to.

Spotify gives brands the option to sponsor entire playlists as well as podcasts.  This is that little loophole to get your message to those paid subscribers.  Sponsoring podcasts is a great way to get a brief message to these listeners in a way that is relevant.  Make sure you don’t sponsor just any podcast.  If someone is devoting an hour and a half to listen to something, make sure you can make that hour and a half more valuable for them.

Another great thing about Spotify is that it’s integrated across devices as well.  For instance, if you’re listening to a song on your phone and you log into your account on a desktop, it syncs up and you can control your soundtrack with either.  This means, wherever and whatever they’re listening on, your message will be heard as loud and clear as the music they’re listening to.   


Measurable Impact on Bottom Line

Alright, now the time reason you’ve been waiting for: MONEY!  How does including Spotify in your marketing strategy provide impactful results for your business?  Spotify allows marketers to connect with people in moments that are specific on an individual level.  Here are a few numbers on how Spotify helps your bottom line.

If you’re in the Consumer-Packaged Goods sector, listen up!  New research from Nielsen Catalina Solutions confirms that Spotify ads were 25% more effective at driving incremental sales per 1,000 impressions than NCS benchmarks.  Not only this, but all together the campaigns measured drove a 108% return on ad spend.

Compared to traditional radio advertising, your results are measurable.  You’ll get a clear report as to how many people heard your ad, how many people clicked through to your landing page, and how many conversions it drove.  This information will allow you to analyze the effectiveness of your strategy and switch it up if need be.  Don’t guess about which radio station to air a commercial on, use data to decide what type of listener is right for your message.


Closing Thoughts

2016 was the year of streaming, 2017 is when we’re figuring all this out, collecting data, and adapting to make streaming a part of a profitable marketing strategy.  Spotify advertising is a way you can deliver relevant and personalized messages to your ideal customers, without rudely interrupting their experience.  People expect ads, especially on a free service.  It’s a part of life and people get that.

Spotify’s growth isn’t something to ignore.  As they grow so will their advertising platform as well the number of companies who decide to strategically incorporate it into their marketing efforts.  Spotify isn’t going anywhere, and as a digital marketing agency we hear them loud and clear.

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