Audio streaming platform Spotify is now turning to its growing video content to attract more advertisers.
In its first-ever participation at the IAB NewFronts event in New York on Wednesday, the popular music app showed its initiative to grow its advertising business.
“We’re ready to play in the digital advertising pool and compete for more than audio budgets,” Ann Piper, head of North American sales at Spotify, told AdWeek.
“Now that there is more video being created on the platform, we want to connect brands with users when they are looking at their screen,” she added.
Spotify Embraces Video Content
Spotify is making strategic moves to position itself as a comprehensive entertainment platform, going well beyond its roots as a music-only service to sustain and grow its revenue by reeling in more brands to advertise on its app.
On top of the short-form video “Clips” on artist profiles launched last year, Spotify is also developing its video podcasts, with over 500,000 episodes uploaded to the platform.
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This hybrid format, which combines the audio experience of podcasts with the visual element of video, has been a growing trend in the industry.
In July 2023, Spotify announced that it is considering adding full-length music videos on the platform; and just this March, the company made the feature available in 11 countries, but not yet in the U.S.
In November, the audio platform also expanded its partnership with Roku, allowing video ads to be played while people stream music on the smart TV, effectively widening Spotify’s ad reach.
Promoting the 'Spotify Effect’
The streaming giant’s latest advertising efforts promote “The Spotify Effect,” with billboards across New York reading, “Your ads work harder on Spotify where everyone is feeling it.”
“The Spotify Effect” is based on a study showing that its listeners are 15% happier and more relaxed after using its app, making them more receptive to advertising.
Spotify advertisers also reported a 5x increase in ad recall.
“Spotify is where people go to feel good and get inspired. For advertisers, this means there’s an opportunity to connect with people in a great environment when they’re in the right mindset to engage,” said Jessica Levinsohn, Spotify's brand marketing lead.
By leveraging its happy listeners and growing video inventory, Spotify aims to optimize its value proposition for advertisers and users alike.
