Spotify's Ong on expansion in Asia Pacific and why it is becoming a leader in programmatic

Spotify continues to expand in Asia Pacific and is now in seven countries in the region.

As Spotify continues to expand in Asia Pacific, with its launch in Thailand in August bringing the music streaming platform’s presence in the region to seven countries, the company shares that it has learned that there is no cookie cutter strategy when it comes to marketing or advertising its services across the region because of the sheer diversity.

The platform first launched in Hong Kong, Singapore and Malaysia back in 2013, before Australia, Indonesia, Japan, New Zealand, Taiwan and Philippines followed over the next four years.

Its expansion shows no signs of stopping because of its people-based marketing, says Ong Sea Yen, vice president of sales at Spotify Asia in an interview with The Drum, as well its access to big data fuelled by local audience insights, which paves the way towards hyper-local personalised marketing.

Spotify’s access to first-party data also helps brands make more meaningful connections with consumers, Ong continues, which also helps the company build a better experience and products for fans.

“Music is weaved into our everyday lives - there’s a song (or a playlist) to represent each moment - for the shower before work to a night out on the town,” explains Ong.

“Music reflects who we are, what we are doing and how we are feeling in any given moment. And thanks to music streaming services, people are listening to music and amplifying these moments more than ever.

“Understanding people through music has become a key part of Spotify’s data mission. The theory behind the work: because music listening is so uniquely emotional, universal and, now, addressable thanks to streaming, it can uncover deeper insights than consumption of other kinds of content like movies and TV,” he adds.

Spotify signed a deal earlier this year with LiveRamp to let marketers in the US activate people based audiences on Spotify and engage them with the right message across devices. While LiveRamp is still in beta mode in the US and currently unavailable in APAC, Ong believes it will attract advertisers when it is finally launched in the region.

“Partnerships such as LiveRamp allow us to have more in-depth conversations with advertisers as we are able to better understand their audiences, build enriching audience segments for them and track sales through data matching,” explains Ong, adding that as the sophistication around data-driven marketing and customer relationship management continues to grow in APAC, Spotify’s streaming intelligence and ability to leverage first-party data and tap into relevant audiences will help marketers in the region improve both targeting and their understanding of campaign performance.

What Spotify has done in the meantime, is to boost its programmatic offerings, like opening its audio inventory to the Rubicon Project, AppNexus and the Trade Desk to be traded programmatically. Ong declines to share how much revenue has this approach brought in, but says that the high mobile adoption throughout APAC and Spotify’s mobile-first strategy in the region is highly favourable to audio.

He further explains that audio when combined with mobile is particularly powerful in programmatic advertising and makes it easier for advertisers to target users listening to music on the go. With people listening to Spotify on various consumer electronic devices like Sonos, Google Home, Amazon Alexa, there is potential to reach more listeners programmatically, he adds.

Another advantage that Spotify brings to the table with its people-based marketing strategy when enticing advertisers to trade programmatically with them, is that this approach allows the platform to have zero ad fraud in its system because instead of targeting ads to devices based on cookies, which is fraught with inadequacies, marketers can now reach people across the many devices they use thanks to persistent identity, says Ong.

This is important because approximately US$50b worth of ad dollars would be lost to fraud by 2025 as these advertisements never truly reached real viewers and if left unchecked, advertisers could stand to lose a staggering US$150b by 2025, Ong notes, in reference to a report by the World Federation of Advertisers.

“At Spotify, we partner with viewability companies like MOAT and IAS that offer measurable standards for use in our campaigns. As Spotify’s advertising proposition is around music, we have a lot of unique insights around streaming music and targeting people’s moods or state of mind. This provides brands opportunities and capabilities to leverage our algorithmically smart playlists,” says Ong.

“Our people-based approach to advertising is two pronged – a persistent ID based on deterministic targeting and 100% viewability as there is no scrolling or skipping through ads. Our partnerships with third-party adtech companies works extremely well for advertisers looking for crisp metrics to shape up their media strategies.”

The online music streaming scene has been getting more crowded with the likes of Tencent and Amazon launching their own services in recent times, but Ong believes that there is still a sizeable number of untapped audience in APAC, with Spotify’s unique addressable market (people who have at least one Spotify compatible smartphone and an ability to subscribe) set to expand by over half a billion people by 2021.

“Streaming is the future of music listening and it is an experience we are proud to have made popular across much of the world,” asserts Ong, who adds that he believes that emerging technology like artificial intelligence will have a part to play in the future of music listening innovation, especially in voice operation.

In the meantime, Ong says Spotify is concentrating on providing its users with the best personalised, the most thoughtfully curated and focused music discovery experience available. Localisation, simplicity, speed, catalogue quality, better payment options for users are also key, he explains.

Spotify also recently successfully concluded a licensing deal with Warner Music, which brings the the platform's stock market debut one step closer to reality.

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