BY SPOTIFY
With more than 600 million users around the world tuned in to Spotify, there’s no shortage of opportunity for brands and businesses to connect with their fans in creative ways on our platform.
Last year, we launched Spotify Sparks to help educate advertisers on why Spotify is the destination for reaching the most engaged audiences and leveraging culture-shaping content for impactful advertising campaigns. Following two successful summits in Brazil and India, we brought Spotify Sparks to the U.K. for the first-ever London edition. On May 1, Spotify executives, industry leaders, content creators, and advertisers gathered for a series of live discussions, presentations, and interactive sessions that explored the full power of the Spotify ecosystem.
During the event, Grace Kao, Spotify’s Global Head of Advertising Business Marketing, moderated a conversation with Alex Norström, Spotify’s Co-President and Chief Business Officer, about the evolution of Spotify as a platform and the growth of our global advertising business.
We’re sharing highlights from Grace’s conversation with Alex, as well as Grace’s insights about the inaugural event, the latest ad experience innovations, the feel-good power of audio, and more.
Alex, what have been the most memorable moments of growth during your 13-year Spotify tenure?
Alex: For me, it’s been when we’ve had to bet the farm and commit surgery on ourselves a couple of times. Moments when you ask, Are we really going to do that? The first was when the world shifted from desktop to mobile—clearly evident now, not so much at the time. It paid off, we basically got a ton of growth, and in one month we grew more than the 12 months prior. Same with podcasts. We’re now in our second phase of podcasts, but a few years ago we had to start and establish our reach.
Has adding Audiobooks in Premium been another one of those moments?
Alex: I think so. The moment started last year, when we took a hard look at our proposition and saw there was so much consumer surplus. People spend hours and hours on our product. So, it was the right time to raise prices. This was new for us. But at the same time, we’re putting more value back in. An example being audiobooks, but also music videos and AI Playlist. We keep adding features to reinvest back proportionally.
Something that people don’t realize and we don’t talk about much is that our innovation is feature-led. We’ve been innovating in features—AI DJ, Spotify Connect, and daylist are good examples. Instead of leaning back and just letting the AI and the ML take care of how users interact with Spotify, we actively construct and innovate on features. Which I love.
And what advice can you share with these marketers at Spotify Sparks?
Alex: I’ll talk about marketing from our perspective. We saw a few years ago that as the cost of media increases, the price of advertising goes up. So whether you’re a global brand or a start-up, it’s more expensive to market. When things are expensive, they are riskier. So, you naturally become more risk-averse.
We always try to look at things differently. So we said, If you have millions of users, you can tell compelling stories on the platform. You can talk to the users about their consumption on the platform and what’s relevant. And the hope is they then share with their friends on their networks.
That’s what Wrapped is. When you hit the spot, it’s amazing—it’s marketing and messaging that is very efficient. And we see great growth and retention.
Grace, this was our first Spotify Sparks U.K. event. What was your favorite session?
Grace: Following the remarkable success of Spotify Sparks in Brazil and India, we’re bringing the magic of this event to more countries, including the U.K., the U.S., Australia, and Mexico. I was so happy and proud to attend Spotify Sparks U.K., where fascinating discussions were had about the intersection of creativity, culture, and fandom. I loved all the sessions, but one of my favorites was Outside Voices in Marketing: Are We There Yet?, where experts shared how brands can get inclusive marketing right. It was moderated by Rak Patel, our Head of EMEA Advertising Sales. This topic is a personal passion of his, so he truly brought the conversation to life!
Why is it important for Spotify to bring advertisers together for an event like this?
Grace: It’s such an exciting time for the company right now. The Spotify experience offers inspiration, discovery, and interactivity through innovative, personalized products like AI DJ, the Spotify Home feed, Discover Weekly, and daylist. Through Spotify Sparks, we gave U.K. advertisers a deep-dive look at the evolution of Spotify as a platform and the unique fan communities, creative opportunities, and immersive personalized environments available to brands. As we continue to innovate to become a more visual and interactive platform for our fans, we leveraged Spotify Sparks to spotlight how the evolution of Spotify will offer even more opportunities for advertisers to reach consumers across formats, moments, and mindsets.
What are a few ways Spotify Advertising is benefiting advertisers?
Grace: Spotify is home to premier content that drives culture. It’s part of our DNA to stay innovative—we use this superpower to create impactful connections between artists, listeners, and brands. With over 100 million tracks, 5 million podcast titles, and 350,000 audiobooks, people use Spotify to soundtrack their lives. Not only that, but the Spotify experience creates a halo of good vibes that puts listeners in a mood-boosted and positive mindset when they tune in to the platform. We’ve found that these positive feelings extend to the ad experience, too, which means that brands can reach audiences when they’re in a positive mindset and highly engaged any time of the day. From programs like music consulting via AUX and interactive ad formats like call-to-action (CTA) cards to more visually inspiring video ads, Spotify offers brands a range of ways to creatively reach key audiences and effectively drive impact for your brand.
What’s next for Spotify Advertising?
Grace: Spotify is ready to play in the bigger digital advertising pool and compete for more than audio budgets as our platform is more dynamic than ever before. In fact, we’re seeing video consumption grow at a faster rate than audio only, as two-thirds of podcast listeners now say they prefer video in the U.S. With time spent with video content up 48% year-over-year (Q2’23) and more than 500,000 video podcast episodes uploaded thus far in 2024, this rise in video consumption provides an additional opportunity for advertisers on our platform.
We also recently launched Spotify Hits, a new global initiative that spotlights and celebrates the innovative and effective advertising campaigns that ran on Spotify in the past year. In the U.K., I’m thrilled to share that Electronic Arts, Channel 4, and Hyundai are this year’s Spotify Hits winners. We wanted to celebrate the brands who proved that great creative can lead to even greater campaign results, so we were delighted to give them a moment of well-deserved recognition for being creative leaders in this space at Spotify Sparks!
(Source: Spotify)
