Advantages and Disadvantages of Advertising on Spotify

Spotify is the world’s largest music streaming platform, with more subscribers than any other service.  Spotify offers users access to one of the biggest collections of music in history, plus podcasts and other audio content. But access to this music library comes with a cost; users can either endure audio ads between every few songs or pay $9.99 per month for an ad-free experience.

Since not every user is willing to pay the monthly fee to go ad-free, Spotify has become a popular app for advertisers around the world. But is Spotify advertising right for your community bank? If the following positives outweigh the negatives, perhaps you should give it a try!

 

ADVANTAGES 

  • Spotify has access to a large audience: Based on a recent Statista report, Spotify had increased its empire to 180 million active users per month by the end of 2018. Eighty-three million of those were premium subscribers who paid to avoid ads. This means that almost 100 million users enjoy the platform for free and listen to advertising. 
  • Non-paying members must listen to audio ads: Spotify users who access the streaming platform for free will have to listen to audio ads between their favorite songs and podcast episodes. There is no way around it – no skipping or fastforwarding. This is a great advantage for advertisers, especially when other mobile apps or websites allow users to scroll past your ads or  hit the “Skip Ad” button after five seconds.  
  • Spotify allows multitasking: Spotify users can simultaneously use other apps or browse through the web without having to stop the music. While Spotify members enjoy reading the news or catching up on Instagram, the app will keep playing music — and so will your audio ads. This is an important feature, considering that other apps like YouTube will pause when users move away from the app. YouTube may be the most popular option in the world when it comes to streaming music, but this is a big disadvantage. 
  • Spotify users spend long hours on the platform: Because of its multitasking capability, Spotify users spend an average of 25 hours per month listening to Spotify’s content, making the app one of the top 10 most popular apps in the world.

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DISADVANTAGES

  • Limited geo-targeting capabilities: When it comes down to geo-targeting, Spotify might not be your best bet. The platform doesn’t offer hyperlocal targeting; instead, advertisers are limited to audiences grouped by country, state, region or designated market area (DMA). Even though these targeting options might work for some campaigns, as a community bank with varied products, you might find some limitations and restrictions.
  • Genre and playlist content targeting is not relevant to banks: Spotify allows your message to reach people who are listening to music aligned with specific moods,  music genre, or activities like workout, party, relax, and travel. Some companies might find success by advertising their brands based on these parameters, but banks and financial services may not be a great fit. 
  • Conversions on Spotify are rare for the financial services industry: Unless your bank has decided to run a broad branding campaign, you shouldn’t expect great success with conversions. Spotify users listen to this streaming content while driving, working out, cooking, showering…you name it. It’s just not convenient for them to click on your ad, look into the details of your offer, or sign up for their new credit card. Branding campaigns are the exception because you’re simply spreading awareness of your bank within the area and letting listeners know you’d like to take their banking experience to the next level. There is no action needed, and therefore, no immediate conversion is necessary.    
  • Budget restrictions: Spotify requires a minimum ad spend of $250, but limits maximum ad spend to $5,000.  The lower end may be affordable as a test, but do you really want to sink thousands of dollars into a platform that may or may not benefit your bank?  

The bottom line? Spotify can be a great advertising tool for some companies, but might not be the perfect fit for banks due to its targeting limitations. Unless you’re planning to launch a branding campaign, it’s unlikely you’ll find success through this streaming platform. However, if you’re still interested in testing Spotify Ads, talk to an advertising strategy expert who can help you make the right decisions every step of the way. 

 

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