Just last month, Spotify announced that it reached the 50 million paid subscriber milestone. At the same time, the company also disclosed 100 million total users, though this figure may be significantly higher. Either way, over half Spotify’s total userbase streams their favorite music for free through an ad-based model.
Now, brands will have more control as to when they’ll appear on this model. And, hopefully generate more cash for ‘ad-supported’ streaming.
Last May, Spotify began letting brands sponsor the most popular playlists, curated by the streaming giant. Titled Sponsored Playlists, advertisers would match the targeted music users with a specially-tailored message. Marketers would choose beforehand which playlist lined up with the audience they had in mind for a specific ad campaign.
Spotify explained how Sponsored Playlists would work in a blog post.
“With Sponsored Playlist, it’s all about matching the playlist to your marketing goals. Think content plus context; the right message in the right moment. Cardio or Power Workout are perfect for a footwear brand expanding from lifestyle shoes to workout sneakers. A QSR adding breakfast to the menu? How about Morning Commute? An entertainment company with a summer blockbuster teeny-bopper flick? Teen Party, course. You get the idea.”
After slowly rolling out the “branded moments” program, Spotify will now let brands choose from four time windows per day: morning, afternoon, evening, and late-night. Brands can target customers on three-hour blocks time. The vertical promos will run in six categories: sleep, workout, chill time, party, focus and dinner.
7-Eleven became the first advertiser to buy morning video ads for a morning commute-themed playlist.
AdWeek theorizes that this move will allow Spotify to sell multiple sponsorships per day on individual playlists. Citing one example, 7-Eleven could target morning commuters and Bud Light could target late-night listeners on the same playlist.
Danielle Lee, Spotify’s VP and Global Head Partner Solutions, said,
“It speaks to the fact that we understand the context and mindset the user when you deliver a message that’s relevant in that moment. You can drive impact to your brand objective. We’ve taken a very consultative approach in co-developing the creative with the brands and leveraging best practices that we’ve identified with audio, video and display.”
Lee said that the new ad-buying option is supported by the latest research. Research firm Interquest collected data from three pilot campaigns spearheaded by Spotify in December. Spotify worked closely with Gatorade, Bacardi and Bose. 61% people surveyed said that ads increased their purchase intent. Another 76% found ads personally relevant to them. 52% reported the ads increased their interest in the brands.
Spotify recently finished a 13-city road show for agencies and brands including Mediavest and Unilever. The road show explained how branded moments work for marketers.
Speaking on this new initiative as well as the research, Lee said,