The streaming music service has announced a new playlist targeting function that enables marketers to reach audiences on its free tier, based on their mood and/or activity. The ad targeting function will be available in North America beginning May 1.
Jon Hales, country manager, advertising strategic partnerships for Spotify in Toronto, said the service has identified 15 “core” playlist categories – chill, romance, commute, study, road trip, etc. – that advertisers can use to access listeners, based on the premise that they will be more receptive to ads that reflect their mood. The service currently has more than 1.5 billion playlists.
“There are so many robust areas that advertisers can start to focus on outside of just age or gender,” said Hales. “This has been a big ask [from advertisers].”
Spotify currently has approximately 60 million users in 58 markets, 45 million of which access the service through its free, ad-supported tier. It currently serves up between two and three minutes of audio advertising per hour, as well as display ads that are visible only when its player is open on screen.
The service is also introducing what Hales described as “genre targeting,” allowing brands to reach audiences with an affinity for a specific kind of music. “We get requests from advertisers all the time saying they only want to run in a specific genre,” he said. “Up until now we were only able to do demo or gender targeting, but as of May 1…if an advertiser’s only interested in targeting blues or electronic dance music or indie rock, we can do that.”
Hales said the objective is to complement or even enhance traditional radio buys, noting Spotify is particularly strong among millennial audiences that don’t spend a lot of time with terrestrial radio.
Adults 18-34 currently comprise about 60% of Spotify’s Canadian user base, said Hales, with the average user spending about 160 minutes per day with the service.
Asked if Spotify’s objective is to steal share from traditional radio, Hales responded: “I wouldn’t say we’re trying to steal from anybody, we’re just trying to cut our own swathe and prove the power of streaming media.”
Spotify introduced two video ad products – video takeover and sponsored sessions – last fall, and also plans to introduce both daypart and platform-specific advertising functionality. The privately held company claims its first quarter ad revenues were up 53% over the same period last year, while mobile ad revenue skyrocketed 380%.
Hales said the abundance of first-party data available to Spotify is enabling it to continue enhancing the service for advertisers. “We’re looking very good for the foreseeable future in terms of where we’re able to go, where we’re able to drive results for our customers, and the experience we’re going to deliver for consumers,” he said.