Dive Brief:
- Spotify is expanding its revenue possibilities by rolling out sponsored playlists where brands can sponsor the music streaming company's more than 400 playlists.
- Sponsored playlists allow Spotify to take advantage of its user data to give marketers a way to engage in broad-based audience targeting.
- Kia was the first brand to take advantage of the new ad unit by taking over the “New Music Friday” playlist recently to promote its new Sportage brand.
Dive Insight:
Sponsored playlists come at a time when Spotify is looking for revenue opportunities through original content and via its unique dataset in a deal with data management platform Krux. Spotify has 75 million users, and it has deep insight into the music and artists they like. That data is a valuable asset for Spotify and marketers alike and sponsored playlists are likely the first of many ad units that take advantage of that asset.
Adweek reports that Target and McDonald's have also begun buying sponsorships in beta, and that earlier this week, Spotify had disclosed its Discover Weekly playlist is streamed by 40 million users.
In a blog post, Spotify explained how marketers can tap into what it called its “deep music intelligence” to find the best playlist match for a target audience. While the playlist is sponsored for a week, Spotify will combine native promotion and brand marketing within the music stream. The Spotify Brands Team even provided useful tips on how to approach a sponsored playlist in the blog post.
"With Sponsored Playlist, it’s all about matching the playlist to your marketing goals. Think content plus context; the right message in the right moment," the blog post reads. If you're an activewear brand looking to promote a new line of running shoes, consider Spotify's Cardio or Power Workout playlists.
The new ad unit is now available in the U.S. and is in beta in the U.K., though the company has plans to expand to other markets this year.
