Music streaming giant Spotify continues their expansion of audio advertising by allowing brands to sponsor their most popular playlists.
Spotify has announced that they will be expanding their advertising opportunities by allowing brands to sponsor their most popular owned and operated playlists. Brands have previously been able to create their own bespoke playlists; however, this new initiative will allow brands to reach specific consumers performing specific activities. With popular playlists including Monday Morning Commute, Cardio, Power Workout and Teen Party, brands will be able to deliver targeted communications to their desired audience.
Spotify executives recently highlighted that users have to date, created more than 2 billion playlists, with many being created explicitly for specific times and events. This intelligence has allowed the streaming service to identify the type and genre of music that is preferable for different occasions, allowing them to create playlists of their own.
‘Think content plus context; the right message in the right moment’. This is the underlying driver for this strategic decision by the multi-billion-dollar streaming service. Sponsors will be able to partner with context, mood and genre specific playlists and deliver relevant communications that has a potential reach of millions. Allowing for the communications to establish an association with listeners based on the time and place they are in, it is likely to be an extremely attractive advertising platform for brands.
The ability to sponsor specific playlists allows each brand to attach themselves to content without being interruptive. The in-playlist media packages can include native logo placement, ownership of the first advertisement break and 100% display share of voice. As the utilisation of Spotify continues to grow, with listening across multiple devices, during work, rest and play, the opportunities to connect with listeners are healthier now than ever.
With the power of banner advertisements continuing to diminish, recent research has highlighted that banner ads boast a click rate of less than 0.1%. Banner advertisements are generally disruptive and involuntary in nature, which contributes to its ineffectiveness, as they tend to be irrelevant to what the audience is doing at that particular point in time. The looming expiration of banner ads is paving the way for Spotify to grow their ad model and capitalise on audio advertising.
While previously Spotify’s audio advertising efforts have been met with mixed success, sponsored playlists possesses the capabilities to be the next advertising powerhouse for the streaming service. Audio advertising can reach an already captivated audience, enhancing the communications effectiveness. While Spotify is hoping that the consumer belief of commercials being a fair price to pay for free content, applies to all users; it may not be the case. YouTube is another service that adopts a similar belief about their audience, however as the number of ad blocker programs continues to rise, it can demonstrate the audience’s true attitudes towards advertisements. It will be interesting to see whether this new strategy proves effective for the sponsors, or endure a similar fate to many other trialled and failed advertising avenues.
Credits: Spotify, AdWeek, Ad Age & International Business Times.