Marketing with Spotify

Spotify has grown at an almost alarming rate. User numbers were up at around the one million mark back in March 2009 but this had increased to around 7 million by March 2010, with around 250,000 of the users on a paid subscription. So no one can doubt the channel is a huge medium for advertising and one that should not be ignored.  Whilst it is still a European model and is mostly popular in the UK and some Scandinavian countries, the service is likely to appear in the US soon, though they have yet to sign off on the copyright issues.

The way Spotify has set up its business model is clever but could be problematic for users if it takes off. Essentially, the paid membership removes the adverts from the system, so when you sign up, you are no longer eligible for advertisers. Since these users are more likely to spend money online as they have proved themselves to be prepared to pay for membership, removing them from the pool of users advertisers can target is almost certainly going to harm the proposition of advertising with Spotify as their user rates grow.

That aside, most people will be happy with the free service they get.  They’ll still be able to listen to music with only occasional interruption for 20 hours a month and share their favourite tracks with their friends, which is what most people want from the service. So it is likely we will see a similar proportion of users to subscribers in 6 months or a year, providing Spotify make no more changes to the subscription packages.

So who is it for? Well in my opinion and from what I have heard from extensive listening to Spotfiy, it can be used to promote almost anything, although the obvious industry that will make the most of it is the music industry. I have already been introduced to 5 new bands from which I have gone on to buy CDs or download tracks after listening to an ad and then trying out a couple of their songs.

Social network updates

A recent update was made to add social media elements to the service. This was detailed in the article “the next generation of Spotify” so I will not re-cover that material but it is worth looking at how this will impact the future of the service and the advertising potential of it.

The service has certainly not tried to take any of the market share for social networking and instead fully integrates with Facebook, making links to friends on Spotify easy and quick. Not only this but Spotify posts messages onto Facebook as you subscribe to new playlists etc so the programme is very much designed to run alongside it. The main advantage of this is Facebook will not see Spotify as a competitor as such and more future integrations will be possible with the service. It also means that Spotify directly captures more and more of Facebook’s audience as users of Facebook will see their friends integrating and can then look into joining Spotify themselves.

The updates have added another reason to be on Spotify, rather than other music streaming services, and they encourage more frequent use as you go on to see what music your friends are listening to. This, coupled with the influx of new potential subscribers to Spotfy from Facebook’s current extensive user base, is another bonus for people considering advertising with Spotify.

Current Adverts on Spotify

Whilst there is undeniable potential to get success from Spotify advertising, my current experience is that there are still a lot of Spotify related adverts, which indicates ad space is not exactly in high demand. Certainly this is getting less and less as time goes on but recent adverts to promote banner advertising on Spotify will have enticed a few people into the arena.

As with any advertising you have to put together a business case for setting it up, and the one main advantage of advertising with Spotify, as with Facebook, is that you can target your ads to the right demographic. There is certainly nothing more annoying from a user’s point of view when you are forced to endure an advert for a Christina Aguilera track when your playlist consists of rock only. Considering the segmentation data currently available, it is surprising that these sorts of ads are often relayed to users who have no interest in them.

What else can you do on there?

Paid advertising is one way to market with Spotify, but there are many more ways to integrate with the social aspects of the service. Creating your own brand page on the service is a good way to create a buzz and give more of a personal touch to your company’s online profile. Here you can give some detail about the company and allow interaction with clients, suppliers, followers etc by letting them see what music the staff are listening to and publish lists of their own.

Creating playlists for events or publishing suitable staff playlists that others can subscribe to is a good way to add something to your online presence as well as providing more content for your Facebook page and creates a more human view of the company. For example, when working late to deliver a project for a client, the staff can add a playlist of songs they were listening to when working through the evening.

For more ideas to get your social media campaign off the ground or how you can use Spotify as part of your business model please feel free to contact us.