Spotify signs ad deals with McDonalds, AT&T and Coca-Cola

The spotlight has been on Spotify the past several months and it gets only hotter today. The company has scheduled a press event for later in the day but just announced new ad deals with some Fortune 500 companies.

Will Spotify CEO Daniel Ek, pictured, wow fans with today's announcement? Sarah Tew

We now know something about Spotify's press conference scheduled for today in New York.

Spotify has signed new advertising deals with AT&T, McDonalds, Intel, and Reebok and a worldwide ad deal with Coca-Cola, CEO Daniel Ek said today at the AdAge Digital conference. The Verge reports that Spotify will create new "brand apps" that will live inside Spotify's desktop.

The news, which was first reported by All Things Digital, comes hours before a Spotify press conference scheduled for this afternoon.

There's a lot of attention on Spotify now. The worst thing the company could do today is be boring. Managers there have a history of underdelivering on their hype, and calling a big press conference only to announce an ad deal or a long-overdue iPad app would be a letdown. Moreover, Spotify has some momentum and shouldn't waste that.

Rumors about a possible public offering are circulating and managers also say they're shooting for $900 million in revenue by the end of the year. The company has been dogged by complaints from high-profile artists about not sharing enough money with creators, but then The Red Hot Chili Peppers agreed to distribute the band's entire catalog via Spotify.

But hold on. All the talk about IPOs and big revenue should be tempered by the fact that Spotify is still profitless. There are still plenty of doubters out there about the subscription-music model.

No matter how much Spotify generates in sales, critics argue that the royalty rates the company pays are too high for it to ever eke out a profit for any significant length of time. As for the IPO rumors, Spotify managers have dismissed the talk, which doesn't necessarily mean that they're not working on it. By any measure Spotify, which is competing in a very risky digital market, is a long way from being a good investment.

Let's hope Ek surprises us today with something to get excited about.

 

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