Brief:

• Spotify this week expanded its self-serve advertising platform worldwide after beta testing the service in a few countries. The streaming giant's Ad Studio lets advertisers upload a script for Spotify to transform into a fully produced audio spot with background music and a voiceover, per an announcement shared with Mobile Marketer.
• Spotify doesn't charge advertisers extra for the service, which can take anywhere from an hour to two days to create a custom audio ad. The global expansion includes an English-only test with select advertisers among 18 countries in the European Union, Latin America and Asia. The company plans to launch Spanish-language versions of Ad Studio in Spain and Mexico this year.
• As part of the global expansion, Spotify updated its suite of interest-based and real-time ad targeting based on music and podcast streaming, and added business podcast listener targeting. The company also increased the number of ad geotargeting regions from 2,000 to 180,000 and expanded its menu of calls to actions beyond "Learn More" to include "Share," "Get Coupon" or "Shop Now."

Insight:

Spotify's expansion of its Ad Studio to more countries aims to give marketers, especially smaller businesses with limited advertising budgets, more technical resources to create audio ads for its platform. The broadening of CTAs also indicates that the audio streaming platform is continuing to diversify actions users can take on ads, such as making a purchase or acquiring discounts and coupons. 

While Spotify had 124 million paid subscribers to its ad-free version as of the end of last year, it also had 153 million users of its ad-supported tier worldwide, up 32% from a year earlier. That fast-growing audience gives marketers a chance to reach both a mass listener base and potentially smaller groups based on more granular characteristics.

Spotify's latest tweaks to its ad targeting tools follow an update to its self-serve advertising platform in August to help marketers reach target audiences based on their listening habits. Samsung and 3M were the first brands to test out the podcast listener targeting offerings.  

Spotify first began experimenting with Ad Studio in mid-2017 as means for marketers to access self-serve tools that could create audio ads at a low cost. It initially offered the service in Australia, Canada, the U.K. and the U.S. During the test period, more than a third of Ad Studio advertisers used the free tools to create their own ads. Ad Studio usage jumped 68% in 2019 from a year earlier, while number of ads almost doubled, according to company figures.

However, the platform itself is English-only although ads can be in a local language. Several countries, such as those in Scandinavia, which Spotify now covers with Ad Studio, have high English proficiency, per the Economist. Spotify's intention to add Spanish-language features to the Ad Studio platform could help boost adoption in countries like Mexico, setting the stage for a broader expansion throughout Latin America.

Moving the Ad Studio out of beta comes as Spotify expands its content offerings. The company in February agreed to acquire The Ringer, the publisher focused on podcasts around sports and pop culture. However, the COVID-19 pandemic has had a negative effect on Spotify as housebound consumers shift their media consumption to other digital platforms, per a Raymond James analyst cited by Barron's.