How Spotify Curated the Ultimate Playlist for Brand Growth

On any given weekday, there's a group you might not expect to be hard at work in the offices at Spotify: scientists. Yes, scientists. They're not your typical lab coat-wearing, Bunsen burner-wielding geeks, although they might as well be. These relatively recent hires make up Spotify's new Marketing Sciences area, a department dedicated to growing the company as a data-driven, constantly listening, marketing machine. Its aims are twofold: inspire more fans to listen to more music; and inspire more artists to produce more music, more often. "That growth requires connecting a number of dots underneath," says Mayur Gupta, Spotify's global VP for growth and marketing. "It is the ability to deliver the more relevant, personalized and contextual experiences for our users at the intersection of data, technology and storytelling." As a mass-market software company, Spotify has a wealth of both data and tech at its disposal. But Gupta says that these tools alone can't address the challenges of marketing at Spotify -- or at any company, for that matter. Here's a quick playlist on growth, curated directly from Gupta's vast library. Track 1: 'The Human Need' Now that marketing is intertwined with data, it plays a dramatically evolved role in a company. Nevertheless, the fundamentals haven't changed. "At the end of the day, it's about meeting the unmet human need and growing business," Gupta says. "The focus needs to shift towards the 'application of technology' and not just the adoption." A programmer-turned-marketer, Gupta explains that this was one of the toughest lessons he learned at Spotify. "It was never about the channel, or the technology, or the creative itself, but about the unmet human need and your ability to meet it in the simplest and most effective way," he says. "For someone who had put technology ahead of everything, that was a big revelation. If the first chapter of your idea does not begin with the unmet human need, you have a problem." Track 2: 'The Funnel' Even after identifying their customers' unmet needs, some marketers make the mistake of focusing so much on cost-per-acquisition that they acquire the wrong customers. This is one surefire way to stunt growth, Gupta says. "As a brand, you bleed twice -- first, you pay more to acquire that user, then you pay even more to retain someone who never wanted to be there to begin with." Gupta says a "fragmented tunnel mindset" is to blame for the disconnect. "Acquisition is assigned to a 'media team' that is measured on CPA, the rate and volume of acquisition," he says. "Retention is managed by a separate team, or teams, across CRM, product management, lifecycle marketing and so on," leading to sporadic and accidental, low-value growth. Only a longitudinal approach to the funnel drives consistent breakthrough, "controlling it all the way from awareness to acquisition and retention," he says. The beauty of this approach is that any brand can do it, especially smaller ones that lack organizational, data and technology silos. "Before going too wide, start with understanding your existing users: who is the high value highly loyal consumer that you would like to go after?" Then, find a lookalike audience to pursue, which will lay the groundwork for future machine learning and AI. "While this may sound simple," Gupta says, "it is not commonplace, even with available data and technology. The smarter you are higher up in the funnel, the stronger you will be lower down in driving engagement, retention and ultimately lifetime value." Track 3: 'Turning Channel Agnostic' Much like the funnel, Gupta explains that marketing as a whole is often too compartmentalized, to the detriment of real growth. "We measure by channel, we pay by channel, the partnership is by channel, planning is by channel," he says, adding, "It's unfortunate. The end user does not think channel; they think value and experience." As an example, he cites Spotify's recent out-of-home holiday campaign built from users' more bizarre listening habits. One ad read: Dear person who played "Sorry" 42 times on Valentine's Day, what did you do? "Many examples became great nuggets to inspire participation and curiosity, to connect with people," Gupta says. While that campaign wasn't explicitly digital, all marketing is ultimately digital today, Gupta observes. "These are all marketing efforts in a digital world," he says, "for an intrinsically digital consumer who hops from one channel to the other at her own convenience." He calls this being "channel agnostic." Consumers may operate in this seamless world, but marketing still has a long way to go. "That is the single biggest opportunity and the single biggest challenge" for marketers today, Gupta says. "That again requires fundamental convergence and application of data that can stitch the isolated pieces together and give brands a shot at delivering the most immersive, progressive and seamless experience -- the ultimate product," he says. "The roadblock for this convergence is more a mindset and cultural shift than data, technology, or strategy."

How Spotify Curated the Ultimate Playlist for Brand Growth

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