In the past, many firms considered radio an essential part of their advertising expenditure. Most people listened to the radio at some time in their day, particularly in the morning or on their commute to and from work. Times have changed, however, and many people prefer to design their own playlists and then stream them via Spotify.
However, brands can still reach an audience with their message on Spotify, just like they have always been able to do on radio. While many Spotify users pay for an ad-free experience, the bulk prefers to listen to a few ads in return for a free streaming experience. This gives many opportunities for firms to place ads between the Spotify tracks. And Spotify ads don’t necessarily cost you as much as you think they would. Spotify offers a self-serve advertising platform where the prices vary depending on demand for any slot.
Brands have a few options for the types of ads they can feature on Spotify. Spotify offers audio, video, and display ads on its platform. Audio ads are obvious – they play between songs in users’ playlists. These also feature a clickable link that can send users to a landing page of your choice. Although video ads may seem counterintuitive on an audio streaming platform, you can use them in multiple ways, such as sponsored sessions, video takeovers, or branded moments. Spotify rewards any viewer who takes the time to watch your video clip with 30 minutes of uninterrupted music. The third type of advertising on Spotify is display advertising, giving you a chance to create a visual ad for such things as homepage banners, or mobile or desktop overlays.
How Much do Spotify Ads Cost?
Typical Spotify Advertising Costs
It used to be a case of “only big brands apply” when it came to Spotify advertising. Indeed, at one point, the minimum advertising price for a Spotify campaign was $250,000, only viable for firms with deep pockets. However, that has changed over the last year, with the opening of Spotify’s self-serve advertising platform.
Spotify’s self-serve advertising platform was in beta in some time but is officially now live in selected regions. The minimum you can devote to an advertising campaign is $250. As Spotify ads, like their Facebook and Google counterparts, involve behind-the-scenes bidding, your ads will vary in price each time, depending on the competition for your audience. However, you’re likely to pay $0.015-$0.025 per ad served.
Types of Spotify Ad Formats
Although audio ads may seem the most logical on a music streaming platform, Spotify offers a range of ad formats. These include:
- Audio Everywhere (all platforms) – this package allows you to reach your target audience on any device, in any environment, during any moment of the day. Audio ads are served between songs during active sessions, ensuring your brand achieves 100% SOV. As well as an audio spot, Audio Everywhere gives your brand ownership of a clickable companion display unit (in the Cover Art area), letting you extend your campaign and drive traffic to a URL destination.
- Sponsored Session (mobile and tablet only) – this allows you to offer your audience 30 minutes of uninterrupted listening in exchange for watching your brand’s video. Users receive your brand’s Sponsored Session offer only if the app is in view, at the start of mobile sessions. After the video message plays, a clickable display unit appears, inviting further engagement and initiating the 30 minutes of uninterrupted listening.
- Video Takeover (mobile and tablet only) – this allows you to tell your story confidently in a rich, immersive canvas. Video Takeover gives your brand access to a premium app experience where all ads are delivered to logged-in users when they are engaged, and the app is in view. Your video message is served to listeners between songs during commercial ad breaks and includes a clickable companion display unit for campaign extension.
- Overlay (mobile and desktop) – Overlay is a type of display advertising on Spotify. It is delivered when the user returns to the Spotify app, ensuring maximum brand impact. The immersive display unit is clickable and drives traffic to your brand’s URL destination.
- Homepage Takeover (desktop only) – another form of display ad that puts your brand at center stage on the front of Spotify’s Homepage for 24 hours. Homepage Takeover is clickable and supports rich media, enabling brands to include interactive elements to capture attention further.
- Leaderboard (desktop and web player only) – this is a display form that allows you to extend your campaign reach with 100% SOV on-screen – your message will be the only message shown for 30 seconds. Leaderboard display units are clickable and only served when Spotify is the top app on the screen.
- Sponsored playlists (mobile, desktop, web player) – these allow your brand to maximize awareness by exclusively sponsoring Spotify’s top real estate: their owned and operated playlists. Your brand connects with listeners on their favorite playlists — Spotify helps you choose which one best aligns with your target audience. In addition to premium brand placement, your brand surrounds listeners with audio, video, and display ads as they stream the playlist.
Options for Streaming Radio Ads: Pandora vs. Spotify Advertising
In their Q1 2020 press release, Spotify highlights its many successes. Some of the statistics it highlights are:
- 271 million monthly active viewers
- 152 million ad-supported monthly active users
- 79 markets
- 50M+ songs
- 500K+ podcast titles
- 3B+ playlists
They believe they’re the most popular global audio streaming subscription service. But it is important to remember – they aren’t the only audio streaming subscription service. Spotify does still have Pandora as competition – in parts of the world, at least.
How to Set up A Spotify Advertising Campaign
You can easily create your Spotify ad campaign using the self-service platform, Spotify Ad Studio. It is currently available in the US, UK, Canada, Australia, and New Zealand. They hope to shortly add an English-only version of Ad Studio in 17 new markets across the globe with select advertisers. These additional markets will be Spain, Germany, Italy, France, Norway, Denmark, Finland, Ireland, Netherlands, Mexico, Colombia, Chile, Argentina, Philippines, Singapore, Malaysia, and Taiwan. They also plan to launch versions of Ad Studio in Mexico and Spain later this year (2020), fully translated into local languages.
If Spotify Ad Studio is available in your country, create an account, and then you can sign in when you are ready to create your advertising campaign.
1. Choose Your Objective
You begin your campaign by selecting one of two objectives for your campaign:
- Raise awareness for a brand, business, or organization
- Promote a concert or music related content
In practice, setting up your campaign will be similar for both objectives; however, the second objective helps you target fans of a particular musician.
You are also asked to give your campaign a name at this point, which is useful if you run multiple Spotify campaigns.
2. Upload Audio or Request a Voice Over
You might already have recorded the audio you want for your Spotify campaign. If so, select Upload Audio at this point.
Many smaller businesses, however, won’t have audio yet. Spotify offers a free voiceover if you need one. If you wish to take advantage of this offer, you need to upload a script, and Spotify will record a 30-second voiceover for you.
3. Target Your Audience
Spotify sees the key to successful marketing on its platform is effective targeting. They state that campaigns that include playlist targeting drive 2.1x higher intent than those that don’t.
You can target in multiple ways. Options include:
- Playlist – this allows you to connect with people who are listening to music tailored to specific activities and moods
- Genre - deliver your message immediately after a user has listened to a specific genre, i.e., type of music or spoken audio
- Platform - dynamically serve campaigns to users based on their active platform, for example, their app platforms (iOS, Android, web, etc.), connected devices (gaming consoles, connected speakers, TVs, car), mobile OS, device, or carrier
- Location - Reach listeners in a specific country, region or city based on their real-time streaming location
- Time of Day - use dayparting to deliver relevant messaging when users are most engaged, or to complement broadcast buys
4. Set Your Ad Budget and Schedule
Your next task is to tell Spotify the maximum amount you are willing to pay for your advertising campaign and provide them with some details about how you want your money to be spent.
Remember, that you must allow at least $250 (or technically, 250 of your local currency) for your campaign. Spotify will determine the cost per ad served, based on factors such as your targeted audience and location. The more granular your targeting, the more expensive your ads, as you will be reaching more useful people and fewer irrelevant listeners. Spotify will tell you their estimated number of ads served for your budget, and you can increase this number if you are willing to increase your budget.
You are also asked to set starting and end dates and times for your campaign. Spotify distributes the ads it serves between these times, ensuring that you don’t “use up” your paid-for ads before the end of the campaign. Spotify doesn’t charge your account until the end of the campaign, however.
Create Your Ad
The final stage in your ad creation process involves uploading all the necessary creative for your campaign. This includes all your display copy, headlines, artwork, videos, and links to landing pages.