Spotify users, get ready for video ads
Spotify's 30 million nonpaying listeners will start seeing prompts to watch a commercial in exchange for 30 minutes of ad-free mobile music, plus "video takeover" spots on their computers.
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Video is coming to Spotify, but you won't see Nicki Minaj twerking on the streaming music service, at least for now.
The Sweden-based streaming music service on Monday launched two forms of video advertising that will start showing up for its 30 million users who listen to music without paying a $10 a month premium subscription.
The ad products give Spotify new underpinnings to monetize its streaming-music business, which is thriving in terms of user growth but unproven in terms of profitability. Tech companies big and small have been pouring into streaming music, with upstarts like Spotify rapidly gaining users as giants like Apple, Google and Amazon rolled out their own services. But streaming music remains a model with nearly no one making money.
The two new ad types are "sponsored sessions" on mobile, in which brands can sponsor 30 minutes of ad-free music listening for nonpaying users if those listeners choose to watch a 15- or 30-second commercial, and "video takeover" ads, which are 15- or 30-second spots similar to the desktop interruptions that nonpaying users are used to -- only now with video.
Spotify said that its audience for these ads is"highly engaged," spending an average 146 minutes a day listening across multiple devices. Advertisers at launch include Coca-Cola, Ford, McDonald's, NBC Universal Pictures, Kraft/Mondelez, Nike, Sprint, Target and Wells Fargo. In a release, Coca-Cola executive said the video units create new ways to leverage Spotify's data and intelligence, indicating they'll be targeted.
Let's hope Spotify's algorithms are smart enough to distinguish between listeners' love for Coke and listening to songs about a love for coke.