The era of “TikTok made me buy it” is fading. While still relevant, TikTok isn’t the only platform where users genuinely engage with sponsored content. Spotify is a strong contender, possibly even vying for the top spot. Sonic Science—a biometric study examining the impact of digital audio and ad engagement—found that Spotify listeners retain information about brands they encounter in podcasts or while streaming music. Furthermore, ad recall isn’t the only impressive metric. 20% of study participants researched a brand or product after hearing about it in a Spotify ad, and 30% indicated a likelihood of making a purchase—excellent news for advertisers considering audio advertising.

Source However, effective planning is crucial for long-term success. Before launching your first Spotify ad campaign, here’s a comprehensive guide to understanding how Spotify advertising works, its value as an investment, and strategies for creating impactful audio experiences.

What is Spotify Advertising?

Spotify advertising involves incorporating audio ads, often accompanied by a branded video or image, between songs, podcasts, and playlists, primarily within the free version of Spotify.

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Exploring Other Spotify Ad Types

Beyond the standard Spotify ads previously mentioned, several custom options exist, each with varying costs and unavailable through the self-serve ad platform (more on this later).

Sponsored Playlist

Sponsored Playlists enables you to run ads when users listen to Spotify’s most popular curated playlists. Leverage Spotify’s streaming intelligence to gain audience insights and identify playlists that align with your brand.

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Overlay

Upon opening the Spotify app or returning to it, users encounter the Overlay—a highly visible ad designed for maximum brand impact. This clickable ad can redirect traffic to your website or app.

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Homepage Takeover

Utilize the Homepage Takeover to dominate Spotify’s desktop homepage for a full 24 hours. This clickable ad format supports rich media, allowing for interactive elements.

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Leaderboard

With Spotify in view, showcase a visual ad as the sole message for 30 seconds. This clickable Leaderboard ad expands your reach effectively.

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Is Spotify Effective for Advertising?

Absolutely! Digital audio is proving to be a worthwhile investment (pun intended!). The recent surge in podcast and music consumption, driven by lockdowns and quarantines, has drawn advertisers to the medium. Spotify reigns supreme with the largest market share.

Source Spotify’s highly personalized and interactive user experience makes it more engaging, emotionally evocative, and memorable compared to digital video, social media, or television. Here’s why Spotify advertising delivers results:

Captivating Attention with Spotify Ads

In an increasingly competitive digital landscape, Spotify offers access to an engaged and attentive audience. Dentsu International’s research project, Attention Economy, confirms this. Compared to the platform average, Spotify audio and video ads generated a +14% and +155% increase in “greater attentive seconds,” respectively. Attention is paramount—it enhances ad recall and purchase intent. The Sonic Science study underscores the positive influence of Spotify ads on these metrics.

Sustained Attention and Engagement

63% of Spotify listeners consider Spotify an integral part of their daily routines. Studies reveal that global audiences enjoy 20 hours of music weekly, with 1 in 5 people engaging with podcasts—a rapidly growing number (especially true crime enthusiasts!). Furthermore, Spotify isn’t merely background noise. Listeners choose audio when unable or unwilling to engage with screens, such as TV, games, or movies. Whether occupied with cooking or work tasks, listeners actively engage with audio content. This provides advertisers unparalleled access to a captive audience throughout the day, unlike other channels that offer limited, passive engagement.

Expanding Ad-Supported User Base

In Q1 2023, Spotify reached 317 million ad-supported monthly active users—a significant jump from 295 million the previous year. As the platform attracts new ad-supported users, the pool of engaged listeners expands.

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Connecting with Younger Demographics

Spotify’s recently launched “Broadcast-to-Podcast” publishing tool empowers radio broadcasters to transform existing content into on-demand podcasts, allowing publishers to reach the newer generations turning to digital radio and providing advertisers with broader audience targeting opportunities.

Beyond Digital Audio

While digital audio ads are effective, multi-format strategies are crucial for capturing attention. This explains Spotify’s dominance in Dentsu’s Attention Economy study. Spotify’s research demonstrates the substantial impact of combining audio and video ads. Multi-format campaigns yield a 90% increase in ad recall and over double (2.2X) the brand awareness.

Constant Product Innovation

Spotify continually enhances its offerings for global advertisers, from new dynamic ad formats to innovative ad performance tracking. For example, the platform introduced CTA cards for podcasts in the US, expanding clickable ad placements during and after audio ads, effectively driving traffic to advertiser-specified URLs.

The Rise of Sonic Branding

Although underutilized (less than 10%), brand assets incorporating sonic cues surpass the effectiveness of other music or celebrity endorsements.

The Netflix “ta-dum” soundmark is iconic but ineffective in theaters due to its 3-second duration.

Netflix commissioned Hans Zimmer to extend it for theaters, and the result is incredible.pic.twitter.com/RGw26vCAGY

— Siqi Chen (@blader) August 9, 2020

Consider Netflix’s “ta-dum” sound—a prime example of a powerful sonic identity. Its unsuitability for theaters led to a Hans Zimmer-composed extended version. Cadbury followed suit, commissioning Guy Farley to drum up a sonic logo their brand essence. While traditional jingles may be waning in popularity, their effectiveness was undeniable. As brands strive for consistent multi-channel presence across social media, TV, streaming, and radio, sonic branding emerges as the new jingle.

Navigating Spotify Advertising

Spotify Ad Studio enables the creation of audio or video (horizontal/vertical) ads. Here’s a step-by-step guide to using Spotify Ad Studio:

Step 1: Account Creation (Skip if you have one)

Establish a free Spotify account using your Google, Facebook, or email account.

Upon logging in, you’ll access the Ad Studio, allowing you to create individual ads or intricate ad set campaigns.

Step 2: Specifying Campaign Details

Name your campaign and indicate the advertised product or service.

Provide the ad set name and designate an ad category to ensure relevance for listeners.

Step 3: Defining Your Target Audience

Specify location(s) with regions or countries.

For nationwide campaigns, add postal codes in bulk (up to 1,000) by typing or copying and pasting.

Define the target age group(s) and gender(s).

Refine audience selection based on interests and behaviors.

Opting for no additional targeting allows for the broadest reach. Selecting specific options refines ad delivery. For instance, choosing contextual playlists limits ad playback to specific listener activities when a themed playlist is active. Next, choose the target language.

Select the desired ad-serving platform(s).

Step 4: Ad Format and Placement

Choose from audio, horizontal video, or vertical video formats. While Spotify recommends automatic placement across music and podcasts, you can opt for music stream exclusivity.

You can exclude ads from specific podcast episodes that don’t align with your brand. Conversely, add topics that resonate with your brand values to personalize the listener experience.

Step 5: Scheduling and Budget Allocation

Run ads indefinitely or set specific start/end dates and times.

The minimum average daily budget is $15, with a $250 lifetime minimum. You can customize the amount. Based on audience selection, Spotify predicts potential budget utilization.

Step 6: Setting Your Delivery Objective

Choose one of three delivery goals: impressions, reach, or clicks.

Control ad frequency (daily, weekly, monthly) and set the bid cap. Spotify provides bid recommendations based on similar audiences.

Step 7: Ad Creation

Input ad details such as the ad name, advertiser name, tagline, and CTA. Specify the destination URL and optional tracking URL. Here’s a preview example at this stage:

Include a companion image (at least 640 x 640 pixels, JPG/PNG format) displayed during ad playback and an optional logo.

Here’s the preview with uploaded images:

Audio format options:

Upload your audio or choose from the library. The “Create Audio” option streamlines ad creation. Spotify can generate a script and produce your ad within 2-4 business days.

For video ads, enable viewability tracking through third-party vendors and utilize the optional tracking URL.

Upload video content seamlessly using drag and drop functionality.

Step 8: Providing Business and Payment Information

Once you’ve provided this information, submit your ad for approval.

Maximizing Success with Spotify Advertising

Spotify listeners remain engaged during ads due to the “carryover effect,” with 60% of ad engagement transferring from previously consumed content. This translates to a receptive audience primed for engagement. In addition to standard advice—mentioning your brand, incorporating a strong CTA, and consistent messaging—consider these data-driven best practices.

Leverage a Blend of Audio, Video, and Display

Combine different ad formats for maximum impact and audience engagement.

Source Dentsu’s study highlights how Spotify’s multi-format ad capabilities deliver exceptional results.

Prioritize Compelling Ad Creative

Strong creative is crucial for converting an engaged audience. Dentsu’s data reveals that poor creative can lead to a 17% decrease in ad recall.

Source Utilize Spotify’s free built-in creative tools, such as background music and 3D audio (surround sound), and impactful formats like Homepage Takeover or Overlay to create compelling ads.

Genre-Specific Tailoring

With a limited word count (55-70 words), choose words economically. Avoid sounding rushed; edit ruthlessly. Audience understanding is key. When targeting sports fans, emphasize energy and use sports metaphors. For wellness-focused audiences, adopt a calm and soothing tone. 73% of Sonic Science study participants favored ads aligned with their current activity.

Write Conversationally

Connect with listeners authentically. Don’t let brand guidelines stifle the human element. Embrace contractions, colloquialisms, and prioritize a conversational tone. Inject personality, humor, and engage your audience authentically.

Want more ad copywriting tips? Download our free guide >> 10 Tricks to Get the Click: How to Write Exceptional Ad Copy

Understanding Spotify Advertising Costs

Now that you understand Spotify ad implementation, let’s discuss pricing.

Source While the self-serve Ad Studio offers a $15 minimum daily budget and a $250 lifetime minimum, here’s a breakdown of pricing models:

Self-Serve

• Minimum lifetime spend: $250
• Free access to background music, voice actors, and professional audio mixing.

Audio and video ads served during music streams operate on an auction-based model. Increased audience competition may necessitate more aggressive bids for effective budget utilization. Podcast ads have fixed prices and aren’t subject to auctions. Observe the ad auction dynamics here.

Automated

Collaborating with a DSP (demand-side platform) grants access to Spotify inventory through:

• Private Marketplaces (PMPs) with dynamic bidding auctions, or…
• Programmatic Guaranteed (PG) buys with fixed rates negotiated with a Spotify representative beforehand.

Direct

For customized experiences, diverse ad formats, or guaranteed inventory, consult the Spotify team for tailored rates and campaign parameters. Pricing is contingent upon format, audience, and chosen add-ons.

Measuring Success in Spotify Advertising

Beyond utilizing Spotify’s built-in ad analytics, leverage approved third-party measurement partners for real-time insights and campaign optimization.

Source Ad Studio provides dashboard results within 24 hours, showcasing reach and ad frequency. The report tab delivers a comprehensive overview of delivery, performance, and audience insights. Key metrics to monitor:

• Impressions
• Completion rate
• CPM (cost per impression)
• CTR (click-through rate)
• Ad played to X% (25%, 75%, or 100%)
• Genre (pre-ad listening preferences)

These reports can be integrated into your existing measurement tools. Managed campaigns through Spotify grant access to custom measurement solutions. Spotify’s partnerships with third-party platforms enable viewability and brand lift measurement.

Free guide! Download it now >> The All-Star Online Advertising Playbook

Learning from Successful Spotify Ad Campaigns

Before launching your Spotify ad campaign, draw inspiration from these examples:

Pizza Hut’s Game Day Strategy

Through an audio-centric approach, Pizza Hut remained top-of-mind among targeted segments—families, gaming/TV/sports enthusiasts, and Gen Z. Their immersive audio ads achieved a CTR of 0.23% from sports fans and 0.57% from parents and gamers, surpassing Spotify’s 0.06% benchmark.

Salesforce’s Targeted Approach

Aiming to reach millennial B2B buyers during leisure time, Salesforce implemented multi-format campaigns (audio, display, video takeover) across relevant playlists and podcasts. The outcome? Increased brand affinity (+10%), consideration (+11%), and unaided recall (+30%) among decision-makers.

Neutrogena’s Data-Driven Success

To promote their anti-acne line, Neutrogena utilized Spotify’s first and third-party data to connect with health and beauty consumers through audio and display ads.

Source The campaign significantly boosted brand awareness (12-point increase) and purchase intent (13-point increase).

Addressing Common Spotify Advertising Queries

Explore these FAQs for additional insights:

Choosing Spotify Advertising Objectives

Focus on either awareness (reach and impressions) or consideration (clicks). Only one objective is permitted.

Key Metrics for Spotify Advertising

Prioritize these KPIs: impressions, reach, frequency, and audio completion rate. Managed services provide access to custom solutions for measuring verified reach, brand lift, and offline/in-store impact.

Cost of Spotify Advertising

The minimum investment is $250. Each model—self-serve, programmatic, and direct—has a distinct pricing structure. While self-serve pricing is transparent, other models require contacting Spotify (or a marketing agency) for quotes.

Types of Spotify Ads

Spotify offers audio and video ads delivered during music or podcast streams. Custom experiences, such as homepage takeovers or sponsored playlists, are also available.

Determining the Suitability of Spotify Advertising

Armed with a comprehensive understanding of Spotify advertising, you can now assess its suitability for your business. As with any platform, testing is recommended to evaluate its lead generation and brand awareness potential.