Spotify Allowing Brands to Sponsor Playlists

As an avid Spotify advocate and user, I enjoy keeping up with all the news surrounding the product; including on the financial side.

Recently, Spotify’s average revenue per user has been decreasing, which can be attributed to promotions such as low-cost student and family plans. So, what does this mean for users? We’re getting great deals to have access to the music we want, music curated to our tastes, and the ability to discover new music.

Well, this challenge has become a serious topic in the financial community and according to Yahoo caution now surrounds their stock. While I’m biased and prefer Spotify as my main music streaming service; it’s important to keep in mind they’re competing with giants such as Apple, Amazon, and Alphabet’s Google.

In order to find a solution to their challenge, Spotify has added a new advertising feature for brands called Sponsored Playlist.

Sponsored Playlist will enable brands to sponsor Spotify owned and operated playlists such as “New Music Friday” and personalized playlists like your own “Discover Weekly”, which Spotify is currently beta testing. This allows brands to have access to prime placement among some of the most visited and streamed playlists.

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It’s likely that your target audience has a similar taste in music; so with the help of Spotify’s data and analytics your brand can be seen by your target market whenever they decide to add a little bit of rhythm into their life.

They don’t clearly state all the deliverables or features that come with a Sponsored Playlist for brands. It seems that the playlist is branded for that brand and any accompanying audio or video message advertisements (played for non-premium users) would be exclusively for the brand.

Example - SkipTheDishes 

To paint a picture, let’s use Winnipeg-based food delivery company SkipTheDishes (Skip) as an example. It’s exam season for students at the University of Manitoba and Winnipeg, and Skip wants to target the student market. Many students listen to some type of music while studying. A personal favourite of mine is “Intense Studying”, which is conveniently owned by Spotify and makes it eligible to be a Sponsored Playlist. While most students are aware of Skip, they often need to be prompted to take a break and refuel. To drive revenue during this timeframe, Skip sponsors the “Intense Studying” playlist, specifically targeting the two university campuses, and offers an exclusive 10% discount code on orders over $20. Now, that’s smart marketing.

While Spotify doesn’t publicly state how they track results of their Sponsored Playlist advertising results, they do have a well-developed analytical dashboard for artists. This leads us to assume that Spotify can provide advertisers with a variety of targeting options and reporting data.

Moving forward, it’ll be interesting to see Spotify roll out their new advertising feature, how it will affect premium versus non-premium Spotify experiences, and whether Spotify will be able to maintain their highly-personalized consumer experience.

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