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Spotify will pitch a new product, Spotify Ad Analytics, to advertisers at this year’s Cannes Lions Festival. This measurement tool is intended to provide advertisers with reports on the performance of their ads on Spotify and the impact they have on their off-platform business through the corresponding introduction of platform-specific tracking pixels. .
“This requires an incredible understanding that we have [Spotify-acquired podcast measurement service] Podsights and extend it beyond just pods, take it to music, deploy it in all regions and enable it for free. And by offering that service to advertisers, we’re giving them a deeper understanding of how their campaigns are performing, not just on Spotify, but anywhere audio is running. Deploy and track all your information in one dashboard. He puts all the audio and analytics for audio in one place,” he said on the latest episode of the Digiday podcast, Lee Brown, Spotify’s vice president and global head of advertising business and platforms. .
The new measurement tool is part of Spotify’s plan to eventually make its advertising business 20% of its overall revenue. Since Q4 2021, the advertising business share has hovered between 10% and 14%. The growth of its advertising business will also be a key factor in the growth of its podcast business, which, while growing, represents a smaller percentage of advertising revenue than the ads shown on music content. Spotify’s podcasting organization underwent a series of layoffs earlier this month, including the cancellation of six original shows.
During its annual advertising conference, Spotify will also showcase the AI DJ it unveiled earlier this year, designed to provide personalized recommendations to users of the platform. “What I mean is, it’s kind of like the voice of our algorithm,” Brown said.
Spotify has yet to apply generative AI technology to its advertising business, but Bill Simmons, Spotify’s head of podcast innovation and monetization, recently hinted that the company is developing an AI-generated advertising product.
When asked about Spotify’s AI-based advertising plans, Brown said, “We’re still in the early stages of formulating our long-term strategy. , I think you’re testing several different vectors within that region.”
Here are some conversation highlights, edited for length and clarity.
Spotify’s music-related ad revenue compared to podcast-related ad revenue
Both grow very quickly.the podcast is just [at] different stage.And yes, that’s the majority [of ad revenue] now in the whole music. However, podcasts are rapidly increasing their share of total sales.
Eyes (and ears) for AI
actively testing [AI] With AI DJ. We are not currently actively testing with any advertisers. But what I’m incredibly passionate about and excited about is how AI can bring greater scale and improve creativity.
Spotify’s Programmatic Pitch
Opened programmatic sales channels within podcasts.also added to [Spotify] Ad Studio’s self-service platform. That’s why we offer advertisers the opportunity to buy podcasts through that channel as well.
Conversation in Cannes
I think a lot of Cannes will be focused on the second half and heading into 2023. I think many platforms and advertisers are very excited to see what the operating environment will look like as the first half is over.