Despite Steve jobs calling the streaming business model ’bankrupt,’ the music industry seems to disagree. Data has become a significant necessity to have in any industry. New companies are emerging from the information collected in various metrics. The birth of Spotify for brands is one key example arising from Spotify’s data collection.
This post was updated on April 2021
Before we continue, we need to define the meaning of Spotify.
Spotify is a social media platform offering digital audio content through its music streaming service. There are mainly two ways to access Spotify audio content. One, you can access its online music content for free. You can also pay for a premium subscription to have access to its mobile content while offline. Therefore, Spotify for Brands is the use of exclusively sponsored playlists by brands to enhance their marketing strategy.
We can break Spotify for ads into some segments. The segments include Ad Studio, Spotify Codes, and Ad experience. These enable users to generate unique codes for specific albums, songs, profiles, playlists, and more.
The main reason for sponsorship is to utilize music as a sensory marketing strategy. When it comes to keeping consumers glued to online sales, music can be a powerful tool. Ola Sars once proclaimed that if music can affect emotions, it can undoubtedly affect behavior.
Add Ola’s proclamation to the rise of social media usage over the last decade, and boom! Spotify is the number one audio music streaming site. Due to its vast number of subscribers, it is enjoying considerable success in user-generated content marketing. The company is now a core platform in engaging with customers online. Its organic presence in the music department will continue to push the company to become a vital social media platform. However, it is essential to note that Spotify isn’t making any profit.
Types of Ad formats Available to Spotify for Brands
Despite the ever-present setback, Spotify is impacting the advertisement world with its engaging ad formats. They include:
1. Sponsored Playlists
Brands can achieve maximum awareness through the sponsored playlist. They can exclusively sponsor playlists targeting a particular audience.
Moreover, a sponsored playlist helps connect brands with listeners enjoying their favorite playlists. The playlists usually differ depending on the activity of their target audience. Thus, with a loyal fan base already passionate about the playlist, it will increase your brand’s awareness once you use their passion to create ads.
2. Video Takeover
Compared to industry benchmarks, Spotify video views are leading in viewability scores. The videos allow you to tell your story confidently in a vibrant and immersive way. This format is called a takeover because the video ads appear whenever the app is in view. The result is the delivery of video ads to an already engaged user.
Thus, with the video takeover, you can serve the listeners with your video message during commercial ad breaks or in between songs. The add will include a clickable companion display for your campaign extension.
3. Sponsored sessions for free users
The service mostly targets users that utilize the free version of Spotify. In exchange for 30 minutes of ad-free listening time, the listener has to watch a video by the sponsoring brand. This brand could be you. You can become a gateway that enhances a user’s streaming experience.
Users only receive the sponsored segment at the beginning of the free sessions and only if the app is in view. The audience will have to watch your entire video message before a clickable display unit appears on their screens. This relationship will provide further engagement before initiating the 30 minutes of ad-free sessions.
4. Audio Everywhere
Regardless of the environment, device, or moment of the day, it is possible to reach your target audience using the audio everywhere package on Spotify.
During active sessions, audio ads tend to appear in between songs. These pop-ups facilitate brands to achieve maximum visibility engagement.
Additionally, brands can take possession of the clickable companion display unit placed in the cover art area. The display unit will allow your brand to drive traffic to your website while extending your ad campaign.
5. Homepage takeover
For 24 hours, you can display your brand message in front of Spotify’s Home page. The page is both clickable and tends to support a rich media variety. The package also includes the use of interactive elements, enabling you to capture attention.
6. Overlay
You can also employ ads designed for viewability to reach your audience. Users will stumble upon these types of advertisements upon returning to the Spotify App.
The immersive display unit helps ensure maximum brand impact whenever the audience clicks on the links. This impact will direct traffic to your brand’s website.
7. Leadership Display
Finally, we have leadership display units. Although these displays are clickable, the leadership units only appear when Spotify is the top app on a user’s screen. The only message displaying for 30 seconds will be your brand message.
Now that we have that covered, let’s look into the market numbers. The numbers will enable you to visualize Spotify’s juicy opportunity for advertisers and marketers.
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Number of Overall Users in Spotify
Spotify has a total of 345 million active users using the platform monthly. That’s why big companies are continually flocking into the platform to be with their customers. Many websites have covered the continued growth of the platform. From current research, this pattern will be on an upward trend.
Reasons for the Rise of Spotify for Brands
With such encouraging numbers, Spotify is fast becoming a beneficial advertising channel for various brands. Part of its charm is the curated playlists by a user or brand. The creator can share the playlist publicly or among friends.
Below is a list of reasons that make it a formidable platform in the marketing world:
1. A convenient way of storytelling
People are exploring new avenues for staying productive in life. Those aged between 15-38 years are more likely to multitask as they listen to music. Many of them believe that listening to some music while working does encourage them to keep working.
Using straightforward user-generated content, brands don’t have to provide much information: The subscribersˊ playlist are interesting enough to be shared across multiple channels.
2. Podcasts and Music Streaming are on the Rise
Music streaming and podcasts are now the new norms of consuming content. As per recent statistics, over 144 million people are listening to podcast shows in the US. 60% of that portion tends to lookup an ad if they find the product or service interesting.
3. Redefined personalization
Digital campaigns tend to be more productive whenever presented in the right context. Now with AI technology, Spotify helps brands understand the impact of their ad messaging content in real-time.
4. Insights on Audience
For marketers who want to understand their audience more, Spotify can be an excellent investment. As more people use the streaming site, the company is gaining insights into their interests and habits. Insights provide Spotify with the ability to dive deep into audience insights using AI.
What Sets Spotify for Brands Differently from its Competitors?
In increasing its efficiency, Spotify decided to partner with other social media platforms such as Placed and Instagram.
Placed is a mobile innovation in location analytics. It enables clients to understand the behavior of consumers in the physical world. The company’s primary focus is on people, big data, privacy, and innovation. It achieves this through:
- Leveraging big data principles
- Measuring people’s location directly through their smartphones
Recently, Spotify chose Placed to be its measurement partner for its offline distribution in the U.S. The partnership involves Placed measuring business outcomes across the range of places users are engaging the Spotify platform.
On May 30th, 2019, Placed joined Foursquare to expand its analytics capabilities. The merger is already causing a massive stir in the location technology industry. The two companies are aiming to deliver a fully independent technology. This technology will be the most comprehensive location analyzer available to marketers.
Spotify has also partnered with Instagram to ease the sharing of a Spotify playlist on the Instagram app. Since the creation of the feature in May 2018, it has opened several opportunities for both the influencers and bloggers. People are now able to tag their favorite playlist on their Instagram stories.
On top of these partnerships, Spotify has enhanced its reach through the use of the Soundtrack for Your Brand.
What is Soundtrack for your Brand?
Soundtrack for your brand is an application resulting from Spotify as a brand ambassador. It is a kind of Software as a service (SaaS) business that lets you play various types of music in your ad background with peace of mind. Peace of mind here means that you don’t have to worry about copyright lawsuits.
Did you know it is illegal to play your personalized streamed playlist in the workplace? The illegality doesn’t differentiate whether you shared the songs with colleagues or customers.
The inspiration of Soundtrack Your Brand
Started in 2014, Soundtrack came forth intending to provide licensed music for use in stores and other retail locations. Its founders are:
- Andreas Liffgarden: He was an ex-Spotify executive running Spotify’s business development section.
- Ole Sars: He is the co-founder of Beats music which is now part of Apple corporation.
The two founders had previously tried to hire each other at various times during their previous jobs. As the two interacted, they ended up realizing that both have a shared philosophy. They believed that the world of streaming music would present a massive opportunity for marketers. Sure enough, this opportunity came true for both of them.
For Soundtrack, the goal was to fill a specific gap in the market place. It would address some of the issues faced by businesses who want to play music. These problems can include:
- Outlets using their own set of mixtapes or CDs find it tiring when refreshing their playlist. Moreover, subscribing to services sending the music over can become quite expensive.
- Those playing music through radio have no control over the playlist.
- Companies using streaming sites like Spotify for commercial purposes are breaking the law. Most streaming sites only allow individual usage of its content. The streaming license is for non-commercial use only.
With the rise in lawsuits, soundtrack for your brand has become a significant necessity in the world of advertising. With it, you have the right to stream music and play music legally. The streaming right applies to users in the U.S and Canada. In some countries, however, you may need to obtain a license called the public performance right license.
Therefore, soundtrack your brand is otherwise a Spotify for B2B relations. Some of the big companies employing this platform in their marketing campaigns include TAG Heuer, McDonald’s, W Hotels, Unilever, Moschino, Pepsi, Aesop, Uniqlo, and Tony & Guy. There are also thousands of smaller businesses benefitting from this company; they span across 100 countries. Let’s not forget some national operations huge chains, like Starbucks utilizing this platform.
In Conclusion
Are you into online advertising? Have you incorporated Spotify for brands into your marketing campaign? Would you like to get more information regarding how it works? If so, head over to Bunny Studio Website and enlist help from our quality assurance team. We are here to help wherever we can.
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