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Spotify is rolling out its programmatic advertising offering


By Ronan Shields, Digital Editor

November 3, 2015 | 5 min read

Spotify has opened up its inventory to programmatic media-buyers with a private marketplace (PMP) offering after experimenting with the offering since February this year, as the music streaming service aims to further monetise its 75 million-strong user base.

Spotify expansion

The music streaming service, which has been doubling down on its advertising revenue in the last 12 months, and as of a few weeks ago it began offering its PMP services to advertisers, according to Jana Jakovljevic, Spotify, head of programmatic solutions.

Presenting to attendees at ATS New York today (3 November), Jakovljevic explained how the music-streaming service is now offering audio and video inventory to advertisers via its PMP, offering them a host of audience segments.

Spotify's PMP is powered by the music-streaming service's wealth of first-party data, and can offer age and gender targeting generated by listening data, as well as its subscription data. As part of this roll out, advertisers can target audiences based on the declared activity, such as 'Workout', etc., with the company expanding these opportunities to other mood sets.

"So we've made a lot of investment in keeping free free, and we've more than doubled our ad revenue year-on-year, and quadrupled our mobile ads revenue, while doubled our video revenue," she said.

"The missing piece of the puzzle has been programmatic, and that's now here today... We're quite unique in that we have people's ears. Combine that with the psycho-graphic data that we have and that becomes very powerful for brands."

This offering includes "genre data", so advertisers can target based on what a user is listening to, including playlist targeting - for instance its 'workout segment' - with plans to expand on this range of audience segments.

Spotify's unique offering to the market?

Spotify also claims that its ads offering vastly increased levels of transparency to advertisers looking to increase their programmatic media buying (a key issue that was debated throughout the conference).

Jakovljevic added: "Some of the advantages to being an app is that we're 100 per cent viewable, as ads can't appear below the fold, and we only show ads when the user is active, and we don't show ads when the app is behind another window. And all our ads have 100 per cent share at a time, so brands aren't competing for a user's attention."

She went on to point out that all of Spotify's interactions where with logged-in users - a key point of differentiation to advertisers looking to target across screens. "This is declared data, not inferenced data," she told attendees.

As part of this roll out, advertisers can target audiences based on the declared activity, such as 'Workout', etc., with the company expanding these opportunities to other mood sets.

In addition she also explained how Spotify was using this data in a number of ways including exactly what type of music to recommend, as well as to its record label partners which then use these insights to plan their touring dates, as well as release cycles.

During a Q&A segment of her stage appearance she also described how Spotify had previously held back on its programmatic ambitions due to the fact that its primary medium was audio - a nascent media type when it comes to programmatic.

"A lot of our traffic came from desktop app, this means no desktop browser cookies, and no opportunity for retargeting, and no opportunity for post-view attribution," she said.

"Secondly, a lot of our ad sizes are custom in non-standard IAB ad sizes, and this doesn't lend itself to programmatic ad buying.

"Looking back at programmatic, it was an ad buying tool to drive performance on display, so the programmatic audio market was non-existent up until this year."

However, Spotify is now confident of its ability to offer its unique audience insights, and ad formats to marketers, in particular those looking to conduct sequential brand campaigns across screens.

"It's a premium brand environment... with near 100 per cent viewability," she told attendees, although she went on to add that many viewability vendors working with the buy-side of the industry cannot measure in-app.

Audio ad formats is one of the key developments with data-led media-buying in the last 18 months with UK-based Global Radio showcasing its audio exchange DAX as one of the key offerings at this year's IAB Digital Upfronts.

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