Brief:

• Audio-streaming service Spotify updated its self-serve advertising platform to help marketers reach target audiences based on their listening habits. Spotify Ad Studio's new interest-based targeting lets brands reach Spotify Free users tailored to their individual podcast, playlist and audio preferences among categories like comedy, cooking and technology, per an announcement shared with Mobile Marketer.
• Real-time context targeting reaches listeners while they're streaming audio at specific points of the day. Advertisers can choose from activities such as working out, studying or dinner time to deliver a sponsored message at a strategic moment. Spotify Ad Studio is available in the U.S., Canada, Australia and U.K., per Spotify.
• Online learning platform Course Hero boosted consumer intent to use its study services 50% after targeting audiences whose "learning mindset" during "focus" and "study" moments, according to a case study. Protein bar RXBAR similarly used Spotify's new streaming intelligence to reach users who expressed an interest in fitness through their recent playlist listening behavior.

Insight:

Spotify's interest targeting and real-time context audiences aim to boost its value proposition for marketers seeking to reach segments of the 124 million people who use its free, ad-supported service. While the company mostly depends on paid subscriptions to its ad-free Premium tier, its free service saw a 34% jump in revenue in Q2 from a year earlier. Spotify saw increased demand for podcast advertising amid efforts to build the business through acquisitions and by creating original content.

Samsung and 3M were the first brands to test out podcast listener targeting that Spotify introduced last month. Brands can reach users who listen to specific podcast categories such as comedy, lifestyle and health, and business and technology. In April, Spotify added streaming conversion metrics to its self-serve platform to help marketers track the performance of ad campaigns.

Its recent acquisitions of Gimlet Media, Anchor and Parcast give the company more expertise to support its ad business. U.S. spending on podcast ads jumped 53% in 2018, according to a study by the Interactive Advertising Bureau and PricewaterhouseCoopers, underscoring the demand for more tailored targeting.

Meanwhile, Spotify this week reported that it wrapped up Q2 with 232 million users, including 108 million paid subscribers. The 31% jump in paid subscribers from a year earlier helped to boost revenue by the same percentage.

The company faces growing competition from Apple, whose Apple Music reportedly had overtaken Spotify in U.S. subscribers last year, and Amazon Music Unlimited, which was the fastest-growing music streaming service in the past year, per the Financial Times. Apple also plans to beef up its podcasting business by investing in original content, pointing to why Spotify is ramping up its ad-tech.

Apple's growth has fueled greater friction between the two companies, with Spotify claiming that Apple has an unfair advantage as the operator of the App Store — the only marketplace for apps that work on iOS devices. Apple in March dismissed Spotify's complaint, saying that the streaming platform mostly reaches non-paying listeners who don't generate revenue for the App Store. Apple also accused Spotify of wanting all the benefits of the App Store, including software development tools and secure payments, without having to pay for it. Spotify this year filed an antitrust complaint against Apple in the European Union, leading regulators to formally open an investigation in May.