Spotify Rolls Out Programmatic Ad Buying

yay for ad buyers

 

I feel like the snark is really misplaced here. Spotify free tier making money is good news for artists.

 

One of the reasons I switched to Apple Music was how Spotify seems more focused on trying to monetise their free users than improving the service for the paying costumers. It seems I made the right choice.

 

I'm pretty fine with this. When I use a free service I generally expect there to be advertising involved.

I do pay for Spotify though and have been disappointed with their lack of improvements on the paid side. Also sucks when Apple Music gets new albums earlier or exclusively altogether. Been debating about switching for a whiles. The two things stopping me are all of my playlists being on Spotify and when I did do a free trial of Apple Music I really disliked the interface. Idk if that's changed for the better at all but I pretty much hated it around this time last year.

 

What exactly are you looking for Spotify to do for its paying customers?

 

I bet the side bar ads for someone playing Barry White during the weekend evening hours are awesome.

 

Posit: We can see how this plays out with YouTube already and it's not been shown to be good for artists. It ends up scaling really poorly and becomes almost nothing to indie artists based on how the rates get calculated and split up. If Spotify can get the ad buys away from Facebook and Google (which I doubt because it's a worse performing ad unit with not great metrics) I still don't think it helps *artists* see more money. Their rate doesn't change with how much Spotify makes iirc.

 

Really skeptical that this makes Spotify any more viable of an ad platform.

 

I have no idea what the ROI on audio advertising is but as a marketer, music streaming is the last place I'd put my spend. There just aren't any great ways to track the impact your ads are making, like you can with display, search and video advertising. You could make an argument towards the push it can give your brand as a supplement to other ad channels, but that's about it.

Also not sure if this can save Spotify from Apple Music. I think it's only a matter of time :/ (from a one-time Spotify elitist and supporter).

However, I do think you get what you pay for and if you make a playlist, free of charge, titled "baby making music" then you sure as heck deserve some ads targeted right at yo' bad naked self.

 

I work in the digital media business so I can probably speak to this better than others. Spotify is notorious for having shitty and expensive ad products within the industry. They charge much more than Pandora and their units aren't very impactful and have very little customization. The "programmatic" piece they mention allows people to buy audiences (not specifically sites) across all digital audio platforms. So, let's say you want to target a M 18-24 with certain purchase habits with a digital audio ad. You no longer are limited to having to go directly through Spotify or Pandora or iHeart but can bid on the actual price (cost-per-thousand impressions) you pay for that user.

To your point, this IS bad news for artists because programmatic is not the ideal monetization (sp?) strategy for any publisher due to the lower margins. Given how cluttered the digital media space is, most publishers (even big ones like ESPN, NY Times, etc.) can't sell out all their inventory directly so they have to offer some up to the programmatic space. My bet is that Spotify will have to increase their yearly subscription rate by offering different tiers if they want to keep content owners happy but also still provide a premium service.

 

There are all sorts of research methodologies that have been applied before digital audio even existed to track attribution. Digital audio drives more of what they call "Brand health" and "brand equity" which measure how a consumer feels about your brand than actual sales.

 

I believe we are saying the same thing. I agree that this type of ad can help with brand health, there's just no 1 to 1 way to track spend with a conversion (as you know can on so many more ad platforms).

My point is this; if I had a dollar to spend on a paid search ad vs Spotify audio ad, that dollar will always go to where I can track performance.

However, I believe in the importance of brand health and the need for multiple channels to service ads to improve efficiency. Just not sure Spotify, radio or any auditory ad makes sense when compared to the alternatives.