POV: Spotify Expands Ad Studio

Background:

Spotify is moving its self-serve Ad Studio out of beta and making it available in new markets across EMEA, LATAM and APAC throughout the year.

Details and Implications:

Spotify’s Ad Studio is a self-serve platform for advertisers to easily create audio ads from scratch and manage campaigns on Spotify. The company states that it is low commitment, therefore making it ideal for testing, lower budgets and quick turnarounds.

Initially only available in the US, UK, Canada and Australia, Ad Studio is now being rolled out to New Zealand immediately and testing with select advertisers in a further 17 countries across EMEA, LATAM and APAC. Additional markets include: Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Spain, Argentina, Chile, Colombia, Mexico, Malaysia, Philippines, Singapore and Taiwan. The development of the service follows a 68% increase in monthly active advertisers over the past year.

Whilst the ad platform itself will be in English initially, advertisers will be able to create ads in their local language using Ad Studio’s free voiceover tool. According to Spotify, over 37% of its Studio Ads advertisers take advantage of this free service. The company said that it is also planning to launch versions of Ad Studio in Mexico and Spain later this year that are fully translated into the local language.

As part of this global expansion, Spotify has also updated its interest-based and real-time ad targeting options based on music and podcast streaming and it has added business podcast listener targeting. It is also increasing the number of targetable geographies from 2,000 to 180,000 globally and has added new call-to-action button options such as ‘share’ or ‘shop now’.

At the end of December 2019 Spotify had 271 million users and states that currently there are 153 million monthly active ad-supported listeners who use Spotify. In February, Spotify agreed to acquire The Ringer, the publisher focused on podcasts around sports and pop culture, in an effort to expand its content offering and grow users.

Data shows that in recent weeks overall music and podcast streams are down during the current pandemic. This is likely due to the fact that people are not commuting or spending time in the gym (typical use cases) and restaurants and bars in many countries being currently closed. According to analytics company Alpha Data, overall music streams in the US were down nearly 9% during the period 13^th March - 20^th March and Podtrac reports that podcast streams in the US were down 8% the week ending 22^nd March. 

Spotify Ad Studio has experienced steady growth since launching. Targeting audiences based on demographics, location, activity and music taste has seen great traction with advertisers. The addition of new markets is a fantastic opportunity for advertisers operating in these regions to reach and engage audiences through music they enjoy listening to on a popular platform that continues to grow.

Summary:

Spotify’s extension of its platform is designed to provide a broader group of advertisers and small businesses the opportunity to reach their audiences. The dip in music and podcast streaming is likely to be only temporary, with focus turning to those markets that come out of lockdown to see if the behaviour was only short term due to the current situation. History has shown that creating a self-serve platform for digital services is usually a positive step forward for a company’s revenue.

Further Reading:

Adweek | Mobile Marketer | Business Insider | Spotify