Spotify: Is It Worth Advertising?
Spotify, the streaming service, introduces new advertising options. The ever-new platform for listening to music offers the possibility of promoting services or products through audio format or banner advertising.
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How does Spotify work?
Spotify divides its users into two main categories—those who use the service for free and those who pay for the service. Free users are registered via email or social network. At regular intervals, audio advertising is launched for them, either from various brands or directly from Spotify.
Paid users still have an advantage because they are not affected by advertising. The question is how long. In addition, paid profiles on Spotify have other benefits, but they are mainly related to listening to music.
How do you advertise on Spotify?
If you would expect Spotify to work similarly to Google Ads or Facebook, in the way that there is an ad manager where you set up and manage your ads, then you are partly right. We managed to create such a profile, but we could no longer activate it.
The reason is simple: it is a Beta version that can only be used by a narrow circle of marketers from selected countries. So far, advertising is carried out through a third party – an agency that takes care of setting up, running, and optimizing ads.
Spotify (on behalf of the agency) did not specify the number of paid and unpaid profiles. We communicated with the company that handles Spotify solutions and found out, in particular, the methods and possibilities of targeting different budgets.
Spotify is mainly listened to by young people under the age of 25, although its popularity is growing and reaching older generations as well. Spotify called the under-25 target the strongest. It would be best if you also adapted the tone of voice of advertisements and banners to this age.
You’ll make the most significant impact on Spotify by combining ad formats – that means both audio and banners. Audio spots bring high traffic because users listen to music most often with headphones on their ears and work. This means that they don’t look at the screen as often and thus, the impact of banners is reduced.
However, if you also have the budget for banners, definitely invest in them. You have to design the banners separately for desktop and separately for mobile applications.
Advertising combined in this way is most suitable for brand promotion. In the past, there was also a successful advertisement for the recruitment of employees on Spotify, but a similar one has not appeared for a long time.
How much will it cost me?
If you want to start advertising on Spotify, prepare a basic budget of 1250 euros. However, for this, you still have to design audio spots and possibly banners, either in-house or with an external service. Production of an audio spot can be done on local radio stations for 200-300 euros. It depends on how you communicate it and what you want to hear in the audio spot.
Spotify goes for impressions, and you pay for 1000 listens to the ad. The audio spot cannot be skipped in any way, and the non-paying user has to listen to it. It is, therefore, crucial in this case to correctly set the frequency of the spots so that they do not become annoying.
Big tester: We tested different playlists and ran ads for one week. The result?
Smaller companies will probably not advertise on Spotify yet because of the high costs. We made a simple test of how big companies target. The streaming service still has several shortcomings, which will be overcome in the near future, and advertising will become interesting even for smaller or local players despite the higher costs.
During one week, we listened to different genres of music, and we expected that such a specific playlist would sneak in personally targeted advertising. Of course, these were just expectations. There aren’t many advertisers on Spotify, so the same ads sounded on all playlists.
High frequency of the same ads (usually 10x in a few hours), unfortunate targeting. With challenging music (grindcore), the invitation of a digital diva to listen to her music sounds grotesque. Similarly, with other types of playlists, there are invitations to buy cheap chicken breasts. These are the flies that Spotify should catch and personalize and target advertising more according to frequently played playlists.
Experience so far shows that advertising on Spotify is worthwhile for large companies with a large budget and a broad target group. Marketers accustomed to detailed targeting and optimization from Facebook or Google Ads will not find their way at all. It’s only a matter of time because the possibilities for Spotify advertising and ad personalization are huge.