The music streaming platform believes that rapid growth in digital audio audiences worldwide will prompt additional investment from brands, writes Alex Brownsell.
Cannes Lions has become a huge moment in the Spotify calendar. In the feverish contest of hot tickets, the audio streaming platform’s music industry connections help it to to stand out in a crowded line-up. This year, Spotify was able to call on artists including Foo Fighters, Florence + the Machine and A$AP Rocky to win share-of-mind among busy brand marketers and media buyers.
This must make a nice change for a media owner that often struggles to make its voice heard in an industry instinctively pre-disposed towards video advertising – especially one that boasts over 500 million active users worldwide, more than 300 million of which use its ad-funded free product tier.
Not that Rak Patel, Spotify’s Head of EMEA Sales, is complaining. Speaking at Spotify’s beach venue on the Croisette, he argues that digital audio is becoming a “must-buy” in the assembly of media plans. “Gone are the days of digital audio being in a ‘renaissance’.”
Music streaming consumption on the up
Since 2016, average daily consumption of music streaming has risen from one hour and eight minutes to a forecasted one hour and 44 minutes in Q4 2023. And audio plays a key role in Gen Z media consumption in particular. Fuelled by music streaming and podcast listening, and the growth of platforms like Spotify, 16–24s globally consume more professionally produced audio content per day than all forms of TV viewing combined.
Patel believes that, where audiences go, so too brands will follow: “Consumption [of digital audio] is at an all-time high. Digital audio is with you 24/7. People depend on it, they are fully focused on what they are listening to. The appetite from brands is getting bigger. Look at online video 12 or 13 years ago, people were putting TV ads on to video platforms, but audience growth forced change.”
To foster this growing demand, Spotify plans to invest in both content and tools to make digital audio advertising as simple as its video peer.
While high-profile (and high-cost) talent such as the Obamas and the Duke and Duchess of Sussex are leaving its roster of podcasters, Spotify has announced a new series with former Daily Show host Trevor Noah. And the platform hopes to make its content easier to advertise against and measure with the release of its new Spotify Ad Analytics tool.
“Being here [in Cannes], it really gives us that opportunity to go deeper into what we call ‘new ways to play’,” says Patel.
“Connection is massively important to us; our scale now is really key. And that personalisation piece is important to helping brand marketers to take advantage of our platform. We’re going so much deeper into creativity, thinking about creators, and how they can make the most of our platform. And then innovation is something that’s in our DNA.
“For us, [Cannes Lions] is a great opportunity for us to bring all of our different components together, to really illustrate how we’re evolving on the advertising side.”
Re-thinking creator relationships
Patel and his Spotify colleagues arrived in Cannes armed with new studies to catch the eyes of media planners.
The first, carried out with Wunderman Thompson, explored the ‘Future of Sound’ and the implications for audio on brand strategies. One of its key themes – dubbed “fandomonium” – highlighted the close relationship that audiences have with their favourite artists and podcasters, transforming them from “passive consumers to advocates, activists, co-creators and investors”.
“At the heart of our business is creators, and ensuring that three things are happening for that creator,” says Patel. “The first is that the creator can show off their art as best as they possibly can. The second is discoverability. If there are artists on our platform, how can they reach their biggest audience, which we know will resonate and love that art as well? And then the third area, which is obviously really key, is the monetisation.”
While it is fair to say that creators have always been at the core of Spotify’s proposition, it knows it must work harder to retain some of this talent, particularly at a time when TikTok, Instagram and YouTube are making it more attractive (and lucrative) to host content on their platforms. This means helping artists to better monetise the “deep connection” they have with fans, encouraging a “two-way dialogue”, and enabling creators to use Spotify as a way to sell tickets and merchandise.
Telling more personalised stories
Brands are encouraged to use this evolving canvas to “tell stories in the right way”.
Patel cites the example of a recent Disney+ campaign, which gave consumers in the UK, Ireland, Germany, Italy and Spain the chance to explore personalised recommendations of Disney+’s catalogue based on their listening habits. The interactive experience provided a drop-down for more info on the Disney+ title, and a click-through to watch a preview trailer.
Advancec in generative AI may provide further opportunities for personalised audio messaging, with Spotify testing the capabilities with its new ‘AI DJ’ feature.
A study carried out by Spotify in partnership with WARC found that the great majority (81%) of advertisers expect usage of generative AI in the creative process to increase in the next 12 months, although UK creatives are around twice as likely as their US peers to say the reality of using the tech has exceeded expectations.
The rise of generative AI is not without its challenges, however: in April, Spotify had to remove an AI-generated song purporting to be by Drake and The Weeknd. Defending intellectual property will be a challenge for creators and Spotify will be on the hook to ensure it is not enabling breaches of those IP right.
Nonetheless, Patel describes himself as “massively excited” by the potential for it to assist creative development “a world of personalisation”.