Spotify in Talks With Brands To Create Twitter-Like Follow Feature
Spotify is in talks with brands to beta-test a "follow" feature so that marketers can push content like branded playlists to the music-streaming service's users. The feature would be the Spotify equivalent of a Facebook page or Twitter account.
"We're talking with brands, but we're not live with brands," said Jeff Levick, Spotify's chief sales, marketing and international growth officer, of the feature. The feature would be the marketer version of what Spotify rolled out to musical artists, record labels, media companies and regular users earlier this year as a way for those entities to share playlists and other activity with other users.
The follow feature is one of several brand offerings Spotify is mulling as it prepares for what is poised to be a busy 2014.
"This has been the year to take in the inputs. 2014 will be the year to see what externally we can present as new products," said Mr. Levick, who served as AOL's sales chief prior to joining Spotify in 2011.
While Spotify has been working with brands and advertisers in Europe for nearly five years, the company only expanded to the United States two years ago and has spent much of that time building up its sales and advertising product teams -- hiring Clear Channel exec Brian Benedik to run North American ad sales and former Googler Tatiana Gonzalez to lead advertiser insights, among others. It's also been working to establish relationships with advertisers.
During this year's Cannes Lions International Festival of Creativity, Spotify held the inaugural meeting of its global agency council and shared its strategic and product development plans. "The real question from our agency council is how can we help them explain [to their clients] that our platform is more than just radio," Mr. Levick said.
Another area of interest for marketers is how brands can reach those six-million-plus users who pay for the ad-free service, even though a majority of Spotify's more than 24 million active users are on the free, ad-supported service. The follow feature would be one avenue and a natural extension of what some brands have already done to bridge the divide and prolong their marketing beyond a 15-second ad.
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' budgets with Apple's pending ad-supported iTunes Radio music streaming service.
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 company has publicly toyed with the idea. That could help Spotify make more money for artists and help brands target users in a non-interruptive way.
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."