person listening on their headphones while looking out the window
PHOTO: Reynier Carl

As marketers face slashed budgets and altered strategies, any change in advertising can start to feel like a risk. Yet adding Spotify to a marketing campaign strategy can give some marketers a way to provide meaningful messages that fit the current work-from-home era.

Spotify first introduced Ad Studio in limited beta in 2017 as an ad creation interface comparable to other social media ad managers. Last month it moved out of beta with a general release into 22 markets.

Using Spotify Ads to Match a Mood   

Spotify ads can include a destination URL, image and audio message that marketers can prerecord and upload or create using a free voiceover tool Spotify provides. Marketers can select an ad type for brand awareness, traffic generation or to announce an event. Once selected, users can narrow down audience parameters, but with a twist: In addition to the traditional age, gender and location demographics, marketers can also associate their ads with a music type and mood. Spotify ads appear between music and podcast selections.

The selections are clearly aimed at artists and marketers working with musicians, but they also favor marketers offering products or services that complement the different contexts when people play music. Marketers can also build an associative presence with a podcast audience for a given topic that relates to their product or service. Imagine a listener streaming their favorite country tunes while preparing for a cookout — it's a terrific time for an ad suggesting a cold beer or grill-related accessory.

Matching a message to a customer’s potential mood is what distinguishes Spotify from other digital ad platforms. Spotify’s algorithm adopts ads to listener preferences, aiming to deliver relevant ads to a given user’s stream. The arrangement can place a message in a stronger context than ads generated from online search queries, which lack the specific context the Spotify stream offers.

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A Look at Spotify Ad Studio Analytics

An analytics dashboard provides Spotify-specific metrics alongside more familiar ones, such as reach. For example, “listeners” is a metric representing the people who streamed a music or podcast selection after hearing an ad. The conversion used here is the listener rate, which is the number of listeners divided by the reach.

Another Spotify-specific metric, intent rate, reflects the percentage of listeners who are interested in a Spotify track (which is the music or podcast choice). Intent rate is calculated as the number of listeners who also liked a track or added a track to a playlist, divided by listeners. Again, these metrics are designed more for musicians marketing their music but their value can be reimagined for sponsored podcasts.

Marketers using Spotify to bolster their own content should of course add UTM parameters to the destination URLs, just as they would for any social media or digital ad referral campaign. For Google Analytics this means adding the standard parameters: source, medium and campaign. Marketers should then be able to compare the campaign performance against other campaigns for conversion.

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Benefits and Drawbacks of Spotify Ads

One thing to consider with Spotify ads is the $250 minimum spend. While that may not create sticker shock for marketers managing a large budget, it's a considerable investment for small budgets and money that could otherwise be used to experiment with a keyword. In fact, there are limited budget adjustments based on performance compared to features available in the ad managers for Google Ads or Bing Ads. Marketers with a smaller budgets will have to weigh the benefits versus the costs of experimentation here.    

But having a marketing presence where people are spending their time is critical. Spotify’s expansion is timely given the unplanned shift in media consumption. CNBC reported that the average listening time on a podcast decreased due to the reduced commutes during the pandemic. But listeners are choosing older content rather than new music, giving opportunities for podcasts to be discovered and draw listeners in. Moreover, many companies like Twitter and Google have encouraged their sizable workforces to continue remote work, so long-term adoption of Spotify for those staying at home is a certainty.

Ultimately it may be worthwhile to try Spotify out to reenergize or refocus a marketing campaign impacted by the work from home movement. Given the shifted behaviors among consumers, the best place to let customers know you are there for them may be through a digital home speaker.