A Look at Spotify’s Surprisingly Compelling First Party Data Offering

SpotifyIf you are a Spotify user, you may have used the platforms ‘Discover Weekly’ feature. It’s a playlist the music platform’s algorithms generate for you for you based on your listening history, and its uncanny ability to surface music you’ll probably like makes it one of the best examples of content personalisation on the web.

Over the last year or so, the company has started to put its data to work for advertisers. At Exchangewire’s ATS New York event today, Jana Jokovlejevic, Head of Programmatic Solutions at Spotify, provided some insight into the company’s unique set of first-party data, which the company intends to put to work across its audio, display and video inventory.

While the company is quite rightly known for succeeding with the freemium model, just 25 percent of users upgrade to premium, so the remaining 75 percent of Spotify’s 75 million users can be targeted with ads. The usage rates are impressive too, with each user listening to an average of two hours a day across both mobile and desktop.

One of the more interesting types of data that Jokovelejevic discussed was Spotify’s genre and mood targeting. If you’re a user and have been wondering why Spotify keeps pushing mood and activity-based playlists at you, it’s isn’t only because they think you’ll like the music: it’s primarily a data collection exercise to find out more about how you’re feeling, your activities and your interests [worth noting that these weren’t Jokovelejevic’s own words, but it’s an obvious conclusion when you look at how the user interface is constructed). So if you’re listening to a workout playlist, the chances are you’re working out, if you’re listening to a ‘Sleep’ playlist you’re in bed etc, all of which is relevant in one way or another to advertisers. Spotify also targets user-created playlists and cited ‘shower playlists’ as a quirky but surprisingly popular example. Spotify sees 550,000 shower streams per day.

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Then there’s the user registration data of course, which enables advertisers to reach specific age and gender demographics, and the fact the ads are being served against audio means they’re unlikely to be found watching video or TV at the same time.

Spotify claims to have viewability rates of almost 100 percent, although most of the viewability vendors – Google’s Active View being the only exception – are unable to verify whether ads are viewed on the desktop app.

Audio advertising is of course the most obvious starting point for Spotify, and vendors such as Global’s ‘dax‘ (Digital Audio Exchange) and DSPs such as AdSwizz are have emerged over the last couple of years to help service the programmatic audio market.

Spotify launched video advertising earlier this year in mobile and desktop. On the mobile app, users get 30 minutes of ad-free content if they watch a video ad, while on desktop the video ads simply replace the video ads. The company isn’t trading video programmatically yet, but Jonathan Forster, VP of Advertising & Partnerships EMEA at Spotify, told VAN at Dmexco that the company hopes to launch programmatic video earlier next year.


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