Rak Patel, Head of Enterprise Sales at Spotify EMEA, talks to Gabby Fernie about the evolution of the platform and the important part mobile plays in Spotify’s offering. With 70m tracks and over 2.9m podcasts being consumed by 365m monthly users, the platform has seen mobile usage increase to 56 per cent.
Gabby Fernie: Your 'Only You' brand campaign featured several in-app experiences, including an 'Audio Birth Chart' and 'Artist Pairs'. How did these work?
Rak Patel: Only You was positioned around celebrating how each user listens, providing a Wrapped-esque shareable experience that others could engage with. Regarding the content, the Audio Birth chart was brought to life through the artists each person listens to. So the Sun was the top artist streamed over the last six months, the Moon was an artist that best showed their emotion, and Rising was an artist that each consumer really connected with. Then the Artist Pairs looked at the unique audio pairings that have been listened to recently, showcasing each person’s range of interests.
The experience also included learning about the artists you’d invite to your dream dinner party, your song of the year and how some have travelled through different time periods in terms of their music tastes, time of day that different consumers tend to listen to content, and finally genres and topics of music and podcasts that make each person different to the next. The activity was all about personalisation and sharing, which is always something that is popular with our audience.
We’ve also just launched Blend, our newest personalised experience which helps the public to bond with a friend or loved one over their favourite shared music, creating a relationship like no other and putting compatibility to the test. Blend is a new way for users to merge their musical tastes into one shared playlist, making it easier for users to connect, discover and bond over music they love. The experience includes cover art to easily identify Blend playlists, taste match scores to see listening preferences compared to others, and shareable data stories that are unique to every listening pair, and can be shared across social channels. The feature is updated daily based on streaming, and combines the best of Spotify’s personalization capabilities and collaborative playlist functionality into a single shared playlist, making it easier for users to get into a social listening session that is made just for them.
GF: What impact did the pandemic have on download numbers and time spent in the app?
RP: Over the course of the pandemic, we’ve seen listening change in a variety of ways. During lockdowns with fewer people streaming from their cars during their daily commute and with an increase in working from home, more people were streaming across devices like computer desktops, TVs, smart speakers and gaming consoles.. Initially in the early stages we began to see changes to DAU trends and consumption globally, but we quickly saw listening rebound and recover. We’ve reported record MAUs in our recent earnings report, with 22 per cent YoY growth.
GF: How is the app evolving?
RP: The app is constantly evolving, and our team is always looking for new ways to make the platform relevant to both users and advertisers alike. One of the main ways we have evolved Spotify was through the launch of the new audio advertising marketplace, the Spotify Audience Network. This allows advertisers to reach listeners across Spotify’s own Originals and Exclusives podcasts, as well as podcasts via Megaphone and creation tool Anchor, plus our own ad-supported music, all in one place.
This year we’ve also expanded the Music and Talk offering, which brings together music and spoken-word content into one show. Through Anchor, Music and Talk is an accessible format that anyone can use to create unique shows, and whilst it was initially only available in the US, canada, UK, Ireland, Australia and New Zealand, we’ve now expanded to an additional 15 markets across Europe, Latin America and Asia.
We’ve also rolled out the ability to download your favourite playlists, albums and podcasts to your Apple Watch. All users are already able to play tracks, albums, playlists, and podcasts, and now Premium users will also be able to download everything they’re listening to for a true offline and phone-free experience. Moreover, with our latest update for smartwatches running Wear OS, including the new Galaxy Watch4 and Galaxy Watch4 Classic, audiophiles will be able to play through smartwatches whilst on the go. Users will be able to play their favorite playlists, albums, and podcasts with their smartwatches that run Wear OS. By having Spotify on your wrist, you’re more free to run, dance, shop, cook, and socialize—and control your music and podcasts at the same time.
GF: What is next for Spotify? People think of it as a music platform, but obviously, there are podcasts too. What about video, any ambitions in this respect?
RP: Spotify is a platform that is all about audio discovery, whether that be in the format of music or podcasts. As mentioned above we’ve expanded the Music and Talk feature this year, which is now available in a number of extra markets across the globe. We’ve also looked at how we can add even more personalisation to the platform through the launch of both Only You, and the recent launch of Blend.
With Podcasts, we have really put time into innovation and developing how we can make our offering as relevant to advertisers as possible. Over the past year we introduced Streaming Ad Insertion, an industry-changing podcast ad technology that unlocks digital planning, reporting, and measurement for advertisers. Then this year we also launched the Spotify Audience Network in the UK, allowing advertisers to reach more of the public who might identify with what they’re offering.
In terms of video, it is something that we are progressing, particularly around podcasts. With the launch of new video podcasts, fans can get to know their favorite podcast hosts even better, and creators can more deeply connect with their audiences. Video Podcasts can be accessed on your desktop or mobile app, and the creator-made videos will start automatically and sync immediately with your audio feed. The new feature also allows select creators to bring both audio and video content to Spotify, enabling them to connect more meaningfully with their listeners, expand viewership, and deepen audience engagement. It’s a way to enrich the audio experience—for fans and creators alike. It has also proven successful for advertisers, as listeners are able to engage with sound-on video ads, offering a valuable opportunity for advertisers to ensure that their messages have been both seen and heard.
Within video advertising there are two main formats that advertisers tend to use, including video takeovers and sponsored sessions. Video takeover ads are delivered during a listening session when the user is actively browsing through the catalogue to discover music and podcasts. The ads include a companion banner with a customizable call-to-action to help drive engagement. Whereas sponsored sessions boost brand affinity with an impactful video experience. Sponsored Session initiates a 30-minute ad-free listening session and is delivered only when the screen is in-view in a sound-on, 100 per cent share-of-voice environment.
GF: You recently released the third volume of Culture Next, giving advertisers a look into what inspires Gen Z. What are the options for brands looking to engage with consumers on the platform?
RP: There are so many options for advertisers to engage with users through Spotify, particularly across Podcasts, and more information on this can be found on our Spotify Audience Network. This was launched in 2020, as advertisers have historically bought podcast ads on a title-by-title basis. Now, Spotify Audience Network allows advertisers to connect with listeners across a vast range of content including from all four of our studios (Spotify Studios, The Ringer, Gimlet and Parcast) as well as from leading third-party podcast publishers, and then select from a broad range of easy-to-use targeting tools like demographic, geographic, and even audience segment targeting.
Then for music, the audio ads are served between songs while there are no distractions, and the listener is completely focused on what you have to say (as we actually found that 75 per cent of Spotify listeners say they remember ads more when the ads recognize their moment or setting). Advertisers can complement audio ads with a clickable link so listeners can tap to visit your website, app, or online destination. Then we also use Streaming Ad Insertion for podcasts which slots into a listener’s existing podcast experience, meaning we can offer the intimacy and quality of traditional podcast advertising with the precision and transparency of modern-day digital marketing.
Not only this but following a successful US launch of the Spotify Audience Network in April, we also decided to expand the audio-first advertising marketplace, and make it available to advertisers and Megaphone publishers in Australia, Canada and the UK. Within three months of launching the Spotify Audience Network, we found that nearly 60 per cent of our US podcast advertiser base is already working with us, most recently including Volkswagen and Saks - so not only are there plenty of opportunities for advertisers to engage with audiences, there’s also lots of different ways this can be done depending on what works best for them, and allowing them to reach audiences in a number of markets across the globe.
GF: You were recently part of an integrated multimedia partnership with M.A.C and TikTok. Will you be teaming up with more social media platforms to reach a wider audience?
RP: The M.A.C campaign is a great example of how advertisers can engage their target audience across multiple platforms that they consume in one cohesive project to drive a strong consumer experience. Both Spotify and TikTok are hugely popular platforms for Gen Z and Millenials. Looking at millennials and Gen Zs, audio enables and fosters more diverse viewpoints. 62 per cent of millennials and 52 per cent of Gen Zs think that audio amplifies more diverse perspectives than traditional media. 58 per cent of millennials and 48 per cent of Gen Zs have sought content from more diverse creators in the last year. And 71 per cent of millennials and 61 per cent of Gen Zs have used music as a way to learn about cultures and experiences that are different from their own.
In fact, a recent Kantar study of over 900 marketing professionals and 14,500 consumers across 23 markets worldwide, representing over 80 per cent of global media spend, found that Spotify is seen as the “most trusted platform for ads,’ followed by Google and Amazon.
With the TikTok partnership, we were both able to bring the campaign to life in different ways, taking advantage of the unique opportunities and properties of both platforms. Digital audio consumption is significantly on the rise, spurred by investments in content and technology.
In fact, it’s the fastest-growing of all current forms of advertising. That brings with it significant creative potential. We know that advertisers plan campaigns across multiple channels to secure the best reach and engagement and it absolutely makes sense to think integrated when it comes to platforms that consumers often use together, so we expect to see other advertisers ask for integrated multimedia partnerships in the future.