How Spotify is ensuring brands can make the most of its advertising offerings

• Audio has undoubtedly played a critical role in the journey of so many brands over the years.
• While it had lost a bit of its relevance with the advent of television, the increasing popularity of music and audio streaming apps are opening up new opportunities for brands.
• Alexander Donics, Category Development Officer, CPG, Spotify talks to us about all that Spotify is doing to help brands engage with audiences in a highly effective way.

From time immemorial, audio has been an important ally for brands in the process of brand-building. Back in the days of radio, many brands have been built through catchy jingles. Jingles played an important role even when television came about. Who can forget famous jingles like ‘Hamara Bajaj’ and ‘Washing Powder Nirma’ that made so many of these brands household names?

However, with television sets entering most households, a lot of audio branding lost its relevance and we stopped seeing many memorable audio campaigns. Having said that, things are again changing now, thanks to more and more people beginning to use music streaming platforms.

As more and more people are starting to use these platforms, advertisers are realizing these are great mediums to build a strong connection with an engaged set of audience.

We’re today living in a time when increasingly consumers are connected to audio platforms, listening to music and podcasts, bringing with itself a huge opportunity for marketers.

To understand how audio is increasingly playing an important role in consumers’ lives and how brands are using audio streaming platforms to make the best of these platforms, we spoke to Alexander Donics, Category Development Officer, CPG, Spotify.

The evolving role of audio in marketing

Audio has undoubtedly played a critical role in the journey of so many brands over the years. However, its role is constantly evolving. Brands are finding newer ways of reaching out to audiences.

The lockdown also gave a unique opportunity to these platforms which witnessed a spike in listenership during the initial few months. Data from Kantar – VTION’s passive OTT Audio Audience Measurement service (an April report) stated that there had been a 42% increase (amongst consumers able to consume OTT/Streaming Audio platforms) in time spent on listening to OTT/ Streaming Audio apps owing to the fact that they were all house-bound.

Consumers are always on the lookout for new engaging content and audio streaming platforms have done a good job in fulfilling this need. On how consumer needs have evolved over the years, Donics said, “Today, consumers are almost constantly connected to audio platforms, listening to music and podcasts throughout different moments of the day across many devices like smart speakers, cars and gaming consoles, offering them relief from the screen fatigue they experience. And this is particularly true amongst Gen Z and Millennials, who love platforms like Spotify that offer them a tremendous breadth of personalized content.”

Brands have been quick to spot this new touchpoint that presents them an opportunity to connect with an engaged audience. He further explains, “This creates a relevant and huge opportunity for FMCG brands to reshape their approach. Streaming audio creates rich listening behavior insights--at Spotify we call it our Streaming Intelligence. Brands are able to leverage these unique insights to define where, when, and how to best reach and build relationships with their audiences in a high-engagement environment that drives results across the full purchase funnel.”

Speaking about how the months of lockdown led to a shift in content consumption, Donics added, “Without a doubt, the past several months have driven a significant amount of change in the media landscape. Some of the more obvious changes Spotify saw as a result of the lockdown was a shift in how and when audio consumption was taking place. Commuting was for the most part put on hold - so understandably, listening in transit or within cars shifted to in-home environments and a wider-array of devices, such as smart speakers, connected TVs, and gaming consoles. And with that, we have seen a significant rise in co-listening - for example, families listening to music together. This is an interesting trend for brands to consider moving forward - how can they plan for the different contexts in which their consumers are listening? How does messaging need to evolve when you aren’t only speaking to the individual shopper, but also to their entire family?”

He adds that Spotify monitors these signals and this helps them in continuously evaluating the content they curate on the platform. The new playlists and podcast recommendations that are powered by their algorithms all take this type of behavior into account.

How brands are innovating

Considering the spike in usage and the fact that more and more Indians are opening up to listening to non-music content on these platforms too, is giving brands a chance to innovate in terms of the way they are engaging with their audiences.

When asked if brands have been innovating on its platform to communicate with its target audience, Donics said, “Absolutely - and I think there is an art and science to this as well. Brands are increasingly recognizing that not only can Spotify help illuminate new behavior, but that we also offer a really intimate messaging environment. Now more than ever, there is a need to go beyond standard brand-building approaches. We are seeing FMCG brands leveraging our platform to communicate messages of togetherness, recovery, and healing. For example, earlier in the year, Amstel created a playlist in Spain that sought to recreate the sounds of bars and restaurants.”

“Everyone is trying to make sense of this “new normal”, and brands are turning to Spotify as a trusted partner in this effort. And that to me is one of the bright spots in all of this; marketers are showing they care. At its core, brand-building in the FMCG space is about consumer understanding and empathy. It is what attracted me to industry, and every marketer worth their salt will tell you that it all comes back to the consumer. But our ways of understanding the consumer need to evolve beyond traditional methods. That’s the promise of Spotify’s Streaming Intelligence, and given our understanding of context - the moments, moods, and mindsets our listeners are in - we can help brands tailor their messaging to ensure it resonates - while audiences come and stay on our platform to engage with an experience that is unmatched,” he added.

Spotify’s advertising solutions

Over the past few years, Spotify has been ensuring that it offers innovative solutions to brands to make the most of its platform. On what are some ways they’ve been helping brands tell their stories, Donics said, “While we are an ‘audio-first’ platform, we have a range of solutions for brands to take advantage of, both in formats and channels. We have seen a number of traditionally video-driven advertisers ramp up their streaming audio investments as they seek to connect with consumers in an uncluttered environment. We have also seen video advertisers extend their video campaigns through our Sponsored Sessions ad experience given the incrementality of our reach. Driven by the need for greater precision and flexibility, we have seen a significant share of our FMCG advertisers choose to activate via our programmatic channels.”

Brands have also increasingly started looking at podcasts as an effective way of reaching out to people. Having recognized this opportunity pretty early, Spotify is also encouraging brands to use it as a tool.

“Finally, FMCG brands are leaning heavily and quite quickly into podcasts. This is a particularly exciting trend for us given our well-known investments in the industry, and brands can no longer ignore the amount of time spent and engagement their consumers have with this format. We were excited to have P&G’s Dawn and Tide come on board as the sponsors of The Michelle Obama Podcast in the U.S. Watch this space, this will be a very important medium for FMCG brands moving forward,” he added.

The importance of measurement

While more and more marketers are now opening up to experimenting with platforms like Spotify, many of them still question the effectiveness of the campaigns and the ROI it gets them.

On how Spotify is making it easier for brands to measure effectiveness on its platform and therefore helping create brand value, Donics said, “While Spotify has a unique cultural appeal, we recognize that FMCG brands are seeking proof of performance to justify their media investments. Because of this, we have a number of third-party measurement partnerships with the world’s leading measurement firms including Nielsen and ComScore to ensure that we can gauge our effectiveness across a spectrum that we refer to as Reach, Resonance, and Reaction, and we have a team dedicated to not only managing measurement on behalf of our FMCG brand partners, but also helping to interpret the results in the context of the streaming space. This is a big part of how we prove our value to marketers: we don’t want to be just another part of the media plan, we want to be trusted business partners that help create brand value.”