As reported in October, Spotify has introduced a tool for labels to pay for targeted pop-up visual ads, displayed to users with the tagline ‘Brand New Music For You’.
The advertising initiative is called Marquee, according to Rolling Stone, which says that it obtained a pitch deck with further details about the new ad tool.
Labels (or artists) will be required to pay 55 cents for each click by a user on one of the ads, and Spotify recommends a minimum spend of $5,000.
“If an artist pays that amount at 55 cents a click, the campaign should bring in more than 9,000 potential listeners over a seven-day period,” writes Rolling Stone.
As noted by Rolling Stone, the new promotional feature has been likened to pay-for-play at radio and retail.
Speaking to RS, Charleton Lamb, a Senior Product Marketing Manager at Spotify, rejected that idea however, and stated that “you’re not paying for streams”.
“Every listener has the choice to either engage or not,” added Lamb.
“We’re hopeful that our recommendations are useful, that we’re able to match [artists] with people who are going to be interested.”
As explained by Spotify back in October, the new paid-for promotion is currently being run as a ‘test’ and will only be available for labels and displayed to users in the US, for now.
The new pop-ups will be displayed to both free and premium Spotify users, but paying subscribers will be able to turn off the alerts, while free users will not.
Spotify also explains that only “frequent listeners” of an artist, or users who have actively followed an artist, will be served with one of the pop-ups.
“With an upcoming test we’re running in the US, we’re giving artists and their teams the ability to directly tap into this process and connect with the fans that care most about their music.”
Spotify
“We [currently] personalize these new album recommendations based on your listening taste, combined with human curation,” explained Spotify in a user-facing blog post announcing the change.
“With an upcoming test we’re running in the US, we’re giving artists and their teams the ability to directly tap into this process and connect with the fans that care most about their music.”
Continued Spotify: “In this test, we will let artist teams pay to sponsor these recommendations, giving them the power to tell their listeners on Spotify – across both our Free and Premium tiers – about their latest release. You’ll now hear from a wider range of artists, which means you’re less likely to miss out on new releases from your favorites.”
Spotify’s advertising revenues currently sit just below 10% of its overall sales (the remaining 90% come from premium subs), and outgoing CFO Barry McCarthy stated last month that Spotify hopes to increase that figure to 20%, which he said would be driven by better ad tech and advertising served in podcasting.
Its clear that the new promotional tool forms part of Spotify’s mission to try scale its ad business, and as we noted in October, Spotify’s long-teased ‘two-sided marketplace’ is now officially open for business.
“We’re really building a two-sided marketplace that provides tools and services for labels and artists to focus on promotion and marketing,” explained Daniel Ek during the company’s Q2 2018 earnings call.Music Business Worldwide
