New Feature on Spotify – Video Ads
Spotify is determined to exploit its notoriety. The music-streaming service is going to launch its video ad products for marketers. Included in the mobile version, the new feature will allow listeners to watch an ad in exchange for 30 minutes without being interrupted by any other commercials.
Product testing for the new video ads feature is planned for the fourth quarter of the year, and it’s going to include only a few brands. By the first quarter of 2015, the product is going to be extended to all the advertisers on the market. Ford, McDonald’s, Universal Pictures and Coca-Cola are among the first corporations that have signed up to advertise on Spotify globally. Wells Fargo, Target and Kraft Foods are also on board but will only advertise in the U.S.
The ads won’t show up in your feed if you’re among the 10 million users who spend $9.99 a month for Spotify Premium. Otherwise, the brand videos will be served as part of normal ad breaks and only played if the video is viewable. The deal is that if you view a 15- or 30-second video on your mobile device, you can then enjoy 30 minutes of ad-free streaming.
eMarketer’s estimations reveal U.S. advertisers are preparing to invest $5.96 billion in digital video in 2014. $1.44 billion of this sum is going to be spent on video ads for tablets and smartphones.
Spotify’s mobile video ad offers its listeners a bargain: either watch the ad of a single marketer and listen for half an hour without interruption or decline to watch the ad and go on listening to ad-supported music that also includes audio ads. The marketing team who came up with this advertising plan tried out different ideas for the length of the ads. Spotify’s Chief Business Officer Jeff Levick said they tried different lengths for the “Sponsored Sessions”, like 15 minutes and one hour, but ultimately decided 30 minutes was the sweet spot.
Mr. Levick didn’t want to say how much Spotify is asking companies to pay for the Sponsored Session ads, but he did say that they are being priced at a premium to make up for revenue lost from the ads that don’t run in the half hour afterward. He also said that mobile is the perfect traffic for Spotify sponsored sessions right now but he does expect the feature will appear on the desktop service soon.
Spotify claims to have 30 million users but it’s unclear how many of them are using the mobile app and how many are using the desktop app. Spotify didn’t have a mobile app until last December. The same Mr. Levick said that mobile has become as important as desktop in terms of revenue over the past nine months.
But the music streaming company isn’t ignoring opportunities to make money from desktop. Desktop video ads are coming and will work like regular ads playing as a visual if someone has the Spotify desktop app in view and otherwise, as audio only.
Spotify added a post-roll element to the Sponsored Sessions that reminds a user of the brand that paid for the ad-free session. This comes as a result of discussions from Cannes where Spotify had pitched the new video ads. There’s a chance the company could use that exit message to lead someone into a second ad-free session sponsored by that brand.
