AdExchanger: How far are you down the programmatic path?
JANA JAKOVLJEVIC: We’ve made huge strides since last year, including starting to test programmatic audio.
Our plan is to continue rolling out data segments. We’ve just scratched the surface with our data offering. We can generate all sorts of insights into our users because they’re all logged in. We know what time of day they’re listening, what they’re listening to, what device they’re listening on and where they’re listening from.
Audio combined with mobile becomes particularly powerful in programmatic. Buyers can target someone based on the time of day, their location and based on Spotify’s own data. Is someone working out right now? Are they at a party? Are they commuting? What is the person interested in and what are they feeling? Are they listening to a happy playlist or a sad one? We can make all of those insights available to buyers.
What is mobile use like on Spotify?
JEFF LEVICK: The majority of our users are on mobile and it’s growing fast, but that doesn’t make us mobile only. We haven’t seen a decline in our desktop business. Desktop isn’t growing at the pace of mobile, but we do continue to see growth in that area.
Why is that?
JF: Being able to have music in your pocket while you’re on the go is a great case for mobile, but if you’re commuting or doing background listening at work or if you’re at home, desktop is actually a huge business for us.
From our data we can see the switchover points when people transfer between different platforms. Before 9 a.m. it’s mobile during the commute. After 9 a.m. desktop lights up when people get to work and then it’s back to mobile for the commute home. In the evenings there’s a spike against desktop.
Are you doing anything around politics and the election? Pandora is pretty active on that front.
JL: We’re testing something in the political space that we’re planning on rolling out more broadly soon, within the next couple of weeks.
One of the reasons why candidates are interested in us when it comes to politics is because we have a strong, active youth audience. We have first-party data and we can target beyond demographics, including location.
How much does the competition, Pandora, for example, impact your ad product road map?
JL: We have a very different approach than Pandora. Pandora is a lean-back platform. You set a station and then you go on with what you were doing. It’s a strong case for background listening. We’re about curation, searching and discovering new music. Our listening is lean-forward.
Users are immersed in the platform, and as a result, our strategy is around creating more engaging advertisements like audio and video rather than banner farms.
You finally launched video content at the end of January but, at least for now, there’s not going to be any advertising. What are Spotify’s ambitions around video?
JL: Our platform is a place where brands can tell stories, whether that’s visually or through audio.
But we also have a native video ad product called Sponsored Sessions [launched September 2014] that gives consumers the opportunity to choose to watch a video in return for 30 minutes of ad-free music. It’s one of our most valuable and sought after products because it’s engaging and rewarding.
What other noteworthy ad products does Spotify have up its sleeve?
JL: Last year we formed a partnership with Sony to become the default music player in Playstation, and in Q4 we introduced targeting that’s specific to that platform. Rather than trying to target people who look like they might be gamers, we can target gamers inside the console. We know we’re reaching an audience of gamers because they’re right in the middle of playing a game.