COLOGNE-With video advertising now generating about 30% of overall revenue, Spotify is beta testing original video series so that brands can reach both paid and free users “in an immersive experience,” according to the digital music provider’s Global Head of Sales.
A couple of years ago, Spotify had “only a couple of ad units to talk about,” Brian Benedik says in an interview with Beet.TV at the DMEXCO global business and innovation event. “Now we’ve got a complete suite” including audio, display and video formats.
Spotify recently announced hitting the 40 million-subscriber milestone around the world. Of its 100 million monthly active users, 80% are on the free, ad-supported tier and 20% on the paid premium level. “The majority of the revenue at the moment is still subscription-based, but we have a very fast-growing ad business that a lot of people don’t realize is bigger than Snapchat, bigger than Pinterest and a lot of the other ad-supported-only players out there,” Benedik says.
The company gets about 80% of its advertising from the digital ad community, while the rest is more or less repurposed audio creative from radio brands. “A lot of the radio brands have realized that in order to reach particularly millennials with audio messaging, Spotify is a must,” says Benedik.
Spotify’s originally produced video content business includes the 2016 election series Clarify (“The big issues, minus the noise”) Trading Playlists involving National Football League players, and music documentaries. Of its original video series now being tested with select brands, Benedik calls it “a kind of immersive experience. Not just slapping ads in there but trying to create a unique experience where brands can participate…perhaps product placement.”
This interview was taped at DMEXCO ’16. It is part of a video series of industry leaders. The series is sponsored by Videology. For more Beet.TV coverage of DMEXCO, please visit this page.