For example, shampoo brand Herbal Essences has created a
playlist of songs to sing while in the shower. If consumers
decide to follow the branded playlist as new songs are added to it,
"it's always going to live as one of your playlists and the brand
attribution will always be there," Mr. Levick said.
However, Spotify doesn't make money from branded playlists yet.
The company hasn't yet tapped all its means to make money, though
it may need to act more quickly to better compete for advertisers'
Apple's pending ad-supported iTunes Radio music streaming
Spotify is also looking at how it can enhance ad targeting
beyond age, gender and geo-location to potentially include
interest-level information, giving advertisers the ability to reach
people who listen to certain genres or even specific artists. As
Google and Facebook have
demonstrated, letting advertisers target ads more granularly based
on proprietary data can boost a company's ad revenue as tighter
targets command higher prices per impression. And marketers may be
willing to pay a premium for those ads on Spotify if they can
target users who listen to a band that's featured in the brand's TV
campaign -- not dissimilar to how advertisers can supplement their
TV advertising with a Twitter campaign tied to the shows in which
the ads air.
It's easy to imagine Spotify further borrowing from Twitter and
letting advertisers pay to promote content native to the service.
In a Spotify version of the Promoted Tweet, for example, a brand
could sponsor a song, artist or album to appear in a targeted set
of users' Discover tab, which to-date makes organic recommendations
based on information like a user's listening activity and age; the
publicly toyed with the idea. That could help Spotify make more
money for artists and help brands target users in a
Mr. Levick wouldn't directly acknowledge any kind of sponsored
song ad product being on the company's roadmap, but indicated it's
not out of the realm of his team's thinking.
"Brands are looking for us to help them think of unique ways
that they can play a role in that content discovery and that
content sharing and that content engagement."