Spotify’s global head of advertising Lee Brown says the market remains “volatile” due to the coronavirus pandemic as brands adjust to new behaviour from listeners.
The audio platform, which has significantly invested in podcasting in recent years, says users are now accessing more of their content across desktops, TVs, smart speakers, and even gaming consoles as they remain confined to their homes during lockdowns.
The content people are listening to has also changed, with more self-improvement, such as meditation and wellness, as well as cooking and housework podcasts being consumed.
Brown told AdNews brands have also reacted quickly and taken the time to re-evaluate the new conditions.
“First and foremost brands looked at how they are taking care of their own employees and their own company,” he says.
“They’re taking stock of what’s happening in their own business and then they’re applying how that affects how they message and market in that environment.
“Some categories have obviously pulled back, given some of the macro impact to their business. But some have leaned in and really taken this opportunity to connect with the audiences in a tactful way. So they’re still using very self-aware messaging in the environment and they're really being thoughtful about it.”
As states around Australia begin to slightly ease restrictions, the pandemic around the rest of the world is in different stages, with Brown saying the advertising market remains uncertain as conditions change almost weekly.
“We're constantly learning and we're constantly seeing new opportunities of growth and new opportunities to lean into,” he says.
“And we're also seeing the impact that this is having with everybody working from home. And so I would say that it's a very volatile and unpredictable environment now in the marketplace. All we can be is really flexible and provide our advertisers with insight that helps them with their decisions.”
One tool that’s helped advertisers get onto Spotify is its self-serving advertising platform Ad Studios, which recently came out of beta, expanding from Australia, Canada, the UK and US to 22 markets globally, including New Zealand.
“Right now flexibility and insights are the new currency and how we can be flexible with our partners, with our advertisers in helping them through this,” Brown says.
“What they're looking for from us is how we can help them through this, what we can provide them in terms of data and insights from our platform to help them make decisions and understand when the time is right to show up, what the right messaging is and the creative tonality that we could provide on the platform.
“Those are the needs that we're addressing within the marketplace. So flexibility and insights is something that's been key for us and engaging with the partners and answering their questions and their needs.”
One feature within Ad Studios that’s been received well is a free tool that allows advertisers to upload a script and Spotify creates a fully produced audio ad within 48 hours. Nearly a third of Ad Studio advertisers used the tool while it was in beta.
“We’ve received great reception and great feedback on this,” Brown says.
“Since last year, Ad Studio has seen about 68% uptick in monthly active advertisers, and the number of ads created on the platform has nearly doubled. We see this is something that is super efficient for marketers, enables them to buy how they want, and enables them to create assets with us within 48 hours.
“And when we have the audience and the reach that we have in Australia, it's something we have high hopes for adoption in Australia.”
Locally, Spotify outpaces many of its competitors, such as iHeartRadio. Spotify Free, its ad-supported offering, has a 27% weekly national reach, with users between 16-64 years-old, according to a 2019 Kantar TNS study. This is followed by Nova, at 24% and Hit FM, with 24%.
The report also found that Spotify Free users listen for 2.2 hours a day, compared to 1.9 hours for radio. With people’s lifestyles being disrupted by the pandemic, Spotify is expected to release how time spent listening on its platform has changed in the first quarter in its upcoming earnings results, with Brown says he’s “surprised” radio listening has increased in Australia given most of radio consumption happens during commutes.
As traditional media companies, such as out-of-home, events and cinema, take a hit from lockdowns, Brown says Spotify is one company preparing for media spend to be funnelled to it, rather than worrying about audio being pulled as budgets tighten.
“The partners that we're working with are really using audio as core to their strategy to engage audiences where they can find them,” Brown says.
“The experience on Spotify is an amazingly advertiser-friendly platform where there's no clutter. The advertiser has the space and the ear and it's exclusively about their messaging.”
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