Spotify says 2014 will be its ‘biggest year for ad innovation’

Spotify says 2014 will be its “biggest year for innovation on the advertiser side”, a statement of intent that comes on the same day the music service confirmed it is launching an ad-funded free offering for mobile users.

https://www.youtube.com/watch?v=H-EIBBbxnfA

At an event in New York today (11 December) Spotify CEO Daniel Ek confirmed that iOS and Android mobile users can now stream shuffled playlists or artist catalogues – but not search through the entire music catalogue – on their mobiles without having to pay the £9.99 Spotify Premium price tag. 

Until now, only desktop users could access Spotify’s entire music catalogue for free – largely due to restrictions from major record labels – but the company is now extending the full on-demand ad-funded service to tablet devices. Both free services are available from today (11 December).

Speaking to Marketing Week from the launch event, Jeff Levick, chief marketing and revenue officer, claimed opening up Spotify’s free service to mobile and tablet users will “open up a great new, young, diverse audience for advertisers”. 

He added: “We expect this will be a big boost to our growth and big with users too. We think this is one of the biggest innovations to music in the last decade. 2014 will be a very big year for innovation on the advertiser side. They will be able to do really neat things with location and music that they could not do before.”

At launch, only audio ads will appear on the service, but the number of mobile ad formats will increase in the coming months. Ad frequency will be at a similar rate to desktop at around 2 minutes of advertising for every listening hour. 

The new mobile experience will not launch with an exclusive set of brand partners, but the company will instead migrate current advertisers with its desktop service – such as P&G, Unilever, Coca-Cola and McDonald’s – over to mobile, Levick said.

Spotify is now available in more than 55 markets globally and has more than 24 million active users and 6 million paying subscribers. 

Earlier this year Spotify’s global ad product strategy director Gary Liu told Marketing Week Spotify is looking to build the profile of brands on the platform and is exploring more integrated apps, multi-screen ad formats and brand profile pages. 

Spotify reported 128 per cent year on year jump in revenue to $578m in 2012, according to filings for the company’s holding company in Luxembourg. The company has yet to turn a profit, reporting a loss of $78m last year, up from $60m in 2011.

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