Spotify is serving its first vertical video ads through a new "branded moments" offering that gives people 30 minutes of commercial-free listening music afterward.
The streaming music app is in the middle of a roadshow across Madison Avenue where it is pitching agencies and brands on products including branded moments. Spotify argues that it has unique insights into what consumers are doing at any given time, especially when they click on a playlist marked for certain occasions, that make its ads more valuable to marketers.
"A branded moment is more about reaching users in a specific context," said Danielle Lee, VP of global partnership solutions at Spotify. "Based on the playlists that they're activating, we know the moments they are in."
The branded moments are based around six categories: chill time, workout, party, dinner, focus and sleep. Bacardi, Gatorade and Bose are among the first to try out the new ads on Spotify, which is catching up to the rest of the mobile industry with the vertical format.
Spotify has 70 million free listeners, who hear commercials as they play music.
Listeners who encouter the new vertical video ads, which play when people first fire up a playlists, will then get 30 minutes of commercial-free listening. Throughout the 30 minutes, however, more display ads will appear on the screen when the listener looks at the app.
The additional display ads let marketers build on their original marketing message, Spotify said.
The company declined to disclose the price for the new ads.
It would seem Spotify has an opposite challenge from social media sites like Facebook, where viewers see videos but often without sound. On Spotify, listeners may hear the ads but not watch.
Bose creates its video ads planning for all possibilities, with or without sound, in full view or not, according to Mike Mangione, director of consumer marketing at Bose.
"One thing we always focus on is making sure content is compelling regardless of how it's actually engaged with," Mr. Mangione said. "There are times when no audio will be involved and they get the full story. The creative needs to work on multiple levels."
Bose is using the branded moments to promote its headphones when users fall into that "chill time" category. "We're focused on wrapping ourselves around the experience, in the moment," Mr. Mangione said. "We're moving away from interruptive ads and actually trying to understand what the user is trying to accomplish."
Bacardi is sponsoring party moments trying to hit consumers when they're either "pre-gaming" or in the Uber on the way to a night out, said Nadine Iacocca, marketing director at Bacardi Rums.
The drink-maker is introducing its "We Are the Night" campaign, created by BBDO, into the music app. The campaign targets nine different party-type people, whom Bacardi puts into categories like "brave shirts," "glow gals," and "last train sprinters." The brand has a vertical video for each type.
"We would like to try to tailor the message as much as possible," Ms. Iacocca said. "If something has to be optimized throughout the campaign, that's work we will do with Spotify. That's the beauty of the relationship with Spotify is we're able to continuously optimize and customize because their data is so robust."