If you’re a Spotify user, you have likely experienced listening to your favorite songs amidst branded advertising. Have you ever considered how these ads actually come to be or how YOU could take advantage of the market accessibility that the Spotify platform offers, as an advertiser?

And, as a consumer, what kind of content would you be most likely to engage with from an advertiser on Spotify?

What are Spotify Ads?

Spotify ads are video and audio formats that primarily run on the free version of Spotify in between songs, podcasts, and playlists. Spotify also offers “Custom Experiences,” (explained below) which may include Home Page Takeovers, that are aligned with the other ad formats for a visual and auditory experience.

How do Spotify Ads Work?

Spotify offers a few methods for ad buying, primarily through their Ad Studio or programmatically through Demand Side Platforms (DSPs) (e.g., Facebook Ads Manager, Google Ads, etc.) and Private Marketplace or Programmatic Guaranteed buys.

Buying Spotify Ads through Ad Studio

Ad Studio operates similarly to other platforms like Google Ads and Facebook Ads Manager. Spotify uses a similar auction type of process in order to output specific ads for targeted audiences. To launch in your DSP, Spotify representatives work with you to determine the buy details and rates. For Custom Experiences, brands can work directly with Spotify to create their advertising mix.

Side-by-side of Google Ads Platform next to Spotify Ads.
Side-by-side of Google Ads Platform next to Spotify Ads.

The Ad Studio is a place where advertisers can easily access and create all ad types from within the platform. Ad Studio also allows for advertisers to upload and save assets to use throughout their ad creation process. In addition to the ad creation and implementation, Ad Studio gives advertisers the ability to use reporting tools to set goals, track performance, and make changes to their advertisements with their wide range of resources.

Buying Spotify Ads through Demand Side Platforms (DSPs)

DSPs allow for more flexible and consolidated management and reporting of display, audio, and video ads across the board, including Spotify. For advertisers interested in managing large-scale audio campaigns, Search Discovery recommends considering the DSP and Programmatic buy approach.

If you want to learn more about Search Discovery’s managed programmatic services or licensing DV360 with Search Discovery

How much does Spotify Advertising cost?

Spotify Advertising offers the ability to begin an ad campaign starting at $250 within the Ad Studio.

Spotify gives advertisers the option to set their own bids and caps so that their budget is optimized—that is, also kept within pre-set limits. The auction and bidding process can be maneuvered based on the campaign goals that advertisers set, ensuring that all auction results work toward benefitting the brand and reaching set goals. This format allows for a pretty user-friendly experience for advertisers to seek to reach their goals with as much or as little control as they want, making it a relatively simple addition to an advertising strategy, if appropriate.

Programmatic buying may offer some more flexibility with additional optimization levers in the DSP, but Spotify will still support setting fixed-rate CPMs.

How to Advertise on Spotify?

If you’re an advertiser, there are several audio and visual ways in which you can advertise on Spotify.

Types of Spotify Ads

Audio ads are the first type of Spotify advertising that most of us think of, but the platform actually has several more ad options.

Audio Ads

Audio ads are the most well-known form of Spotify ads.

Non-premium users often complain about how many ads interrupt their music. However, from an advertising perspective, audio ads are a favorable outlet because users are unable to skip or fast-forward through them, guaranteeing that users are listening to audio ads no matter what.

Thanks to Spotify’s user insights, advertisers are able to target audiences based on several factors, allowing for more effective messaging to users. Spotify reports that showing ads that “match the moment make a bigger impact: 75% of Spotify listeners say they remember the ads that recognize their moment or setting.”

Video Ads (vertical/horizontal)

Another advertising opportunity can be tapped into through the video ads options, which are typically 15 or 30 seconds. These include video takeovers, which are made up of a companion banner and a customizable call-to-action. Takeovers are only shown when the user’s screen is in view while they are actively looking to find new music or podcasts.

An example of vertical video ads on Spotify.

An example of vertical video ads on Spotify.

Another form of video ads are sponsored sessions. These sponsored sessions prompt 30 minutes of ad-free listening for users. Again, this type of video ad only runs when the user’s screen is in view, and users are unable to skip the ad.

Podcast Ads

Advertisers are offered two different ways to run ads on podcasts—through the Spotify Audience Network and through Title-by-title buying.

The Spotify Audience network allows advertisers to pick their target audience and buy podcast ads to reach their target audience. Spotify has connections with various different podcast publishers and creators, such as Megaphone and Anchor, which help to truly expand their audience network. With these connections, advertisers are given the option to not only target active users on Spotify, but even users that are not listening on Spotify.

Title-by-title buying of podcast ads is respective to Spotify or hosts across select Spotify original and exclusive podcasts. This is an option that includes extensive conversation and working with the Spotify team, as it does not appear to be the most accessible option.

A notable advantage of podcast ads is that they run for ALL Spotify users, including premium subscribers. Podcast hosts are given the choice to opt for including a dynamic ad slot within their podcast through the Streaming Ad Insertion option that advertisers choose. Although it is up to the host, these dynamic ad slots are another potential place in which ads can run, especially in a more targeted and meaningful way.

Custom Experiences

“Custom Experiences” is the term for Spotify’s more traditional variations of display advertising available. These display ads include sponsored playlists, overlays, homepage takeovers, and leaderboards. Most of these ads are display ads that are clickable for advertisers to link to their desired webpage, so users have a quick reference to the ad content.

Overlay ads are pop-up ads that appear as the first thing on users’ phone screens once they go back into the Spotify app, making it the first thing users will see and interact with.

Homepage takeovers are limited to desktop users, but they are ads that can appear on the Spotify homepage for 24 hours.

Leaderboard ads are visual ads that show for 30 seconds when the Spotify screen is being viewed by a user.

Of all the “Custom Experiences” offerings, Sponsored Playlist advertising is unique and offers the opportunity for advertisers to be heard or seen on some of Spotify’s most streamed playlists. Advertisers can use this option to reach users through native ad placements and in-playlist media.

Here;s what a sponsored playlist ad looks like on Spotify.

Your Spotify Target Audience

Spotify’s popularity makes it an attractive platform for brands to have impactful interactions with their target market—if your ads are done correctly. With just about 433 million monthly listeners in the first quarter of 2022, a total of 188 million monthly listeners subscribed to Spotify Premium and opt out of Spotify ads. That leaves about 245 million monthly listeners that are actively listening to ads that Spotify plays for them in between songs and podcasts.

Within Ad Studio, advertisers can access different targeting capabilities available to reach their audience.

Demographics

Spotify has first-party demographics data that gives insights into user age, location, gender, and languages.

Behaviors

By being able to examine listening behaviors, advertisers are able to look into user interests and fan bases.

Contexts

Spotify not only pays attention to listening behaviors based on music, but it also provides insights based on the podcasts that users listen to. In addition to just listening insights, because of its dynamic user experience, it can provide advertisers with context about users regarding the different platforms and devices that users use.

Custom Targeting

Custom targeting is an option that is only available to advertisers that have requested to work with Spotify’s full-service sales team. This option can vary in availability depending on advertising goals.

Targeting and Privacy

When it comes to user data and policy, Spotify collects user information in order to assist with improving advertising and targeting efforts. According to the privacy policy, depending on the specific use of information, Spotify has to ask user permission for some, but not all.

For example, in the use of cookies for marketing and advertising, the law requires Spotify to get consent from users. Spotify might not need to ask consent when it collects personal data for tailoring ads to user interests, but this varies by region and platform.

User data gets shared to advertising and marketing partners so that users are presented with relevant ad and marketing efforts. These advertising and marketing partners are shown user data and usage data information. Users are allowed to change settings so that Spotify stops tailoring advertisements to them, but that is virtually the only option for stopping the use of their information for advertising, aside from unsubscribing to the platform.

Within Ad Studio, advertisers can access different targeting capabilities available to reach their audience.

Measurement

Depending on advertising goals set, there are several measurement tools Ad Studio offers to gain insights on ad performance.

  • Ad Delivery – ads served, reach, frequency, budget pacing, and completion rate
  • Performance – clicks, CTR, and quartile completion rates
  • Audience Insights – age, gender, genre, and streaming device
  • Streaming Conversion Metrics – listeners, new listeners, and average streams

Ad Studio offers services that are provided by external reporting partners such as Datorama, Funnel.IO, Clarisights, ReportGarden, Whatagraph, Supermetrics, TapClicks, Adverity, and AgencyAnalytics.

Custom Measurement

Advertisers that opt in for working with Spotify ad specialists can access a more customized solution system. It includes specific groups that specialize in reach, resonance, and reaction.

Reach includes third-party measurement that helps to find solutions for ad verification, ad fraud, and viewability.

Resonance helps with measuring awareness, favorability, and intent.

Reaction measures sales lift online and offline, in-store visitation, TV tune-in, and podcast attribution.

Why should you consider advertising on Spotify?

Millions of people tune into Spotify every day to listen to something of their liking, offering a wide range of insights and information regarding their interests, solely from what users listen to and care about. This implies that there is a wide range of data that is available to advertisers to increase their reach and conversions.

Spotify’s consumers are highly engaged, as they are actively listening to their favorite music and podcasts, so reaching them in this period is a way to ensure that advertising dollars are being spent on a meaningful audience.

Many of the capabilities and tools that Spotify Ads provides, along with its potential reach advertisers, makes it a unique and attractive platform to expand brand awareness for a wide range of products and services.

Conclusion

Spotify and other music streaming platforms are modern-day radios, with a little bit more balance and variety for the user. It offers a wide range of options for advertisers to customize ad campaigns and optimize their budget, along with several tools and tips for making Spotify ads.

If you have the budget and resources to start advertising your product or service, it’s worth considering Spotify as a new way to build brand awareness and reach.

How Search Discovery Can Help

If you’re interested in learning more about how to enhance your paid media strategy through Spotify or other social media platforms, reach out! Our experts can help you

  • Optimize your marketing components against real-time indicators that directly impact your KPIs
  • Align your messages to audiences
  • Maximize your investment in high-performing segments
  • Automate decision-making to ensure you win in a sophisticated market

Contact us or schedule a consultation with Brad to talk about advertising on Spotify as part of your paid media strategy.

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