For a long time now I’ve thought there is something missing from Spotify. Namely the ability for content creators, rights holders, record labels, publishers and more to reach their fans via advertising to Spotify’s audience of 159 million monthly active users.
Now of course Spotify does offer advertising, namely display, audio and video ads. But they are aimed squarely at the larger corporate customer with deep pockets and they’re not cheap. There’s also the issue of ever decreasing click through rates due to “banner blindness” and the fact that the ads are obviously ads (more on that later) so we’re now trained to ignore these.
So what if Spotify offered self-serve ads to artists?
Speaking as someone who manages Facebook pages for brands and artists, one of the things that never fails to impress me is the sheer volume of opportunities I have to spend my money with Facebook to grow my audience. I’m inundated daily with highly personalised offers of how to reach another 500 fans for just £10 or why I should boost a high performing post. It’s relentless but it works as Facebook generated $39 billion in advertising revenue in 2017. $39 billion.
Take a look at this screengrab, as a Facebook page owner you are met with no less than 3 ways to spend money on ads when you open your page.
Photo credit – Buffer
So I’ve been thinking, why doesn’t Spotify offer something similar? Basically a way for artists etc. to easily reach new fans via self serve ads. Spotify did trial sponsored songs last year but being honest, they were too expensive and I don’t think the way they were designed was particularly effective. They no longer offer them so that’s telling in itself. Spotify also announced a new self serve audio ad service last September where they promised audio ads starting with just a $250 investment. This will certainly help when it launches but I think there’s more that can be done.
There’s another big problem here and that’s Spotify’s Premium service is sold on the fact that if a user pays $10/£10 a month they won’t get any ads. So how do you reach Premium users who pay for the privilege not to hear audio ads or seen banner/video ads. Well that’s a problem I’ve spent a lot of time thinking about and here are my ideas.
Here are 5 ways in which Spotify can offer self serve ads that are cost effective and won’t spoil the user experience
1. Paid placements in Spotify algorithmic playlists – to be clear I don’t mean sticking songs in Spotify’s editorial playlists like Rap Caviar and Today’s Top Hits, they are and always should be controlled by the Spotify editorial team. What I mean is Spotify’s algorithmic playlists like Discover Weekly, Release Radar and the 6 Daily Mix playlists that we all get in our Spotify account whether we want them or not. There are also seasonal algorithmic playlists that crop up now and again like “The Ones That Got Away” that offered a playlist towards the end of 2017 of songs that we should like but never listened to. In fact if you look at Release radar the description even says “Catch all the latest music from artists you care about, plus new singles picked just for you”. Discover Weekly says something similar.
With Spotify’s smart genre targeting these paid placements wouldn’t be harmful to the users listening experience either. Spotify already maps artists who are similar to each other and it knows what kind of music we listen to so it would be a simple process to find fans to target for a specific song or artist. That way a metalhead wouldn’t get Justin Bieber’s latest single in their Release Radar playlist for example.
I see this kind of ad being self service where an artist or label could log into their Spotify Ad Manager™ control panel, choose the song from their artist (already live on Spotify) and be offered a range of targeting options and prices. Something like “Reach 10,000 new listeners for $100” via Discover Weekly or similar, depending on the artist, genre and pool of fans who would match the song. I’ve seen songs from emerging artists generate over 100,000 streams just from being placed in Discover Weekly, these algorithmic playlists can deliver significant volume. This could be capped too so that no more than 20% of the songs are paid for placements.
2. Radio – As above, Spotify’s Radio algorithm can also drive high volumes of streams. So again using what Spotify knows about our listening habits they could offer placements in radio channels and any instances of Spotify’s Radio function being triggered.
3. Recommended Song – At the bottom of playlists now you will see recommended songs based on the content of the playlist that the user selects. Again this could be a pool of sponsored possibilities.
4. New Releases – Another opportunity to get your song/album in front of fans. There’s also a selection of “Top Recommendations For You” under the Discover tab in Spotify.
5. Sponsored songs/playlists/albums in Spotify Free – while the 4 ideas above are for Spotify Premium or Free I think it would be great to offer artists self service ad formats in the Free service that can also boost awareness and streams. So just like banner ads and video ads these ad formats are clearly labelled as such bit instead of having to stump up a few thousand pounds/dollars for a custom campaign from the Spotify ad sales team these are self service and can be purchased from say £50 or something. Spotify could offer a range of templates to ensure quality control and/or all ads would need to be approved first but I don’t see why these wouldn’t work. Obviously they wouldn’t be as effective as the other methods above but there’s still a percentage of people who do click on ads, especially if they are creative and targeted.
The one issue I could forsee with all of the above is the fact that streams of course count towards chart positions and what’s to stop a major label with extremely deep pockets to buying their way into the charts? What if they bought up all of the inventory available for an almighty push towards one song? Would that matter?
Well of course you could argue that there is a built in fail safe already given that a song must be played for 30 seconds or more to count as a stream. But if Spotify’s targeting is good (which it is, I always find great new music on my Discover Weekly) then users will like the song and play it all the way through anyway. So ethically is that wrong?
Another way to handle this is to put limits on the total reach for each song. Let’s say for example that every song you want to pay to promote will only ever have a total reach of 1 million fans a month. Or however you want to cap it.
The details of course need to be thought about and ironed out but one thing I know for sure is that artists and rights holders are desperate to give Spotify money in order to reach new fans in an effective way. I work with so many artists and labels who are forced to put their money into Facebook ads because there aren’t any other options on Spotify and sadly because of the very nature of these “off-platform” ads they’re not that effective.
If there was a way to directly buy ads in Spotify there would be a huge appetite from the creative community and I’m sure a share of Facebook’s $39 billion in annual ad sales would find their way into Spotify’s ecosytem and then because of the way Spotify distributes it’s revenue, back to the artists. Win-win right?