Responsibility To The Audience
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This document discusses Spotify's approach to advertising. It notes that consumers dislike ad clutter and being shown the same ads repeatedly. Spotify aims to find a balance between meeting users' expectations of a positive experience and delivering value for advertising partners. The document highlights that Spotify's platform is trusted among millennials for privacy and security and provides tailored, multimedia ad experiences within trusted content. It concludes that Spotify has found a good balance in prioritizing its large ad-supported user base while still serving advertisers well.
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Responsibility To The Audience
- 1. Brian Danzis Global Head of Video & Live Events, Spotify Responsibility to the audience
- 2. “Consumers Hate Advertising” Bob Greenblatt, NBC Entertainment Chairman
- 3. A D
- 4. 10-20% of people avoid ads Source: The New Yorker, 2013
- 5. Why?
- 6. Ad clutter
- 8. High ad load
- 9. A D A D A D A D A D A D
- 11. Recycling ads
- 12. A D A DA D A D
- 13. Impression Distribution 1 5 1 0 1 5 20 25 30 Frequency by user 0%25% 70% 5% Source: Ad Exchanger, April 2018
- 14. 20% 50% Actual Distribution 1 5 1 0 1 5 20 25 30 Frequency by user 15% Source: Ad Exchanger, April 2018
- 17. If We’re Not Careful, We’re Going to Kill Our Industry
- 20. Marketers want more accountability, not only in terms of media, but also, business outcomes while balancing respect to the user Spotify is here to help.
- 21. Advertising as a gift T A C T I C # 1
- 24. The Power of Multimedia T A C T I C # 2
- 26. Platform- Tailored Ad Experiences T A C T I C # 3
- 29. Build a relationship with your audience T A C T I C # 4
- 30. 30 Trusted platform among millennials for data privacy and security1 For trusted, quality content and an enjoyable experience2 #1 #1 Our fans trust Spotify Source: 1. Ypulse & Spotify, “A Day in the Life” 2018, US, UK, AU 2. Protobrand & Spotify, "Ad Research” 2018, US, DE, MX, AU
- 31. 92% 76% YouTube 76% Apple Music 68% Pandora 63% iHeart Source: Ypulse & Spotify, “A Day in the Life” 2018 US, UK, AU Spotify leads competitors in trust
- 32. Spotify Has Found The Balance Between Prioritizing has found the balance between prioritizing the expectations of its 100 million+ ad-supported users and delivering for its advertising partners.
Editor's Notes
- Tell us how you really feel, Bob. But you know what? He’s right! Consumers do hate advertising. Why? Commercial loads on Full Episode Players are approaching TV network numbers at times, with seemingly little to no ad frequency capping, and limited choice in the absence of an interactive ad experience. Has our industry pushed audiences to ad fatigue and future abandonment altogether? How can marketers and video distributors of all sizes recapture the attention of audiences? Let’s talk more about these issues, and what we can do to solve them…
- …People aren’t just avoiding ads, they’re running away from them all together!
- Just 5 years ago, it was estimated that 10-20% of people actively avoid ads. We all know how much this industry has changed over the last 5 years…and with that, I can assure you, that the percentage of people avoiding ads has also changed with it, and not for the better…
- Why? Let’s talk about it…
- Number one: ad clutter I want us all to take a step back, think about a time in the last week when you’ve returned from a long day at the office, from a long travel day, or even a Saturday running errands…you walk in the front door, and see the two things that you’ve been dreaming about all day…the couch, and the TV. After all, after the day you just had…you need, no, you DESERVE to sit down in front of that TV and unwind to the tune of your favorite show. So you flip on the TV, tune into a channel to catch up your favorite show that you missed last week. You’ve found it…you press play…and sit back and wait to be entertained… You’re 5 minutes into your show, and suddenly, everything goes black…(next slide)
- A commercial break…great…oh, and of course, there she is…FLO…from PROGRESSIVE! Then, JAN FROM TOYOTA…the SONIC GUYS…ALLSTATE MAYHEM! Get me out of here! These people are anywhere and everywhere that you’re watching TV. You can’t avoid them. At this point you’ve already forgotten about the four commercials you’ve just seen. You’re just really annoyed that it’s taking so long to get back to your show. Why is this? You guessed it…CLUTTER! One auto spot, one QSR, and two insurance spots! How can a viewer be expected to remember your brand’s message, and ultimately, purchase your product? With increased clutter and the resulting lack of category separation, there’s no chance for your brand to resonate. At this point you’ve only seen 2 minutes of ads---with still another ~18 minutes to go on average! It’s a lose-lose situation here. The viewer is ticked off, and your brand isn’t making any traction.
- Number Two: High Ad Load Ad clutter is undoubtedly a hot button topic in both TV and digital today, but so is ad load…(transition to next slide)
- With increased fragmentation in the marketplace, declining ratings, and an aging audience, TV networks have no other choice but to increase their ad load to aggregate any semblance of a meaningful rating! I’m sure all of you are familiar and have found yourselves living the real-life example of this animation. What’s also important to note is that TV isn’t the only medium having this problem…their FEP counterparts and competitors are also guilty of this as well…(transition to next slide)
- I’ve heard a lot of great things about ABC’s new show “A Million Little Things” so last night, sitting in my hotel room, I thought that I’d check it out. Before the show even started, I was hit with 6 ads. 6 ads that I had to sit through if I wanted to even watch a minute of the show. On average, ABC has 15+ minutes of ads per hour, and the same can be said for their counterparts. There’s no escape. Just try unplugging your headphones, and tell me what happens. You’re trapped! But the issue isn’t just isolated to the networks and their FEPs, platforms like Hulu are also feeling the pressure to make ends meet. In fact, Hulu has about 9 minutes per hours of ads! At what point is enough enough already? Will FEP ad loads continue to add up until they’re at the level of TV today?
- Number Three: Ad Recycling We’ve talked about ad clutter, ad load, but what we haven’t talked about is the egregious recycling of ads that we’re seeing in the industry..everybody’s favorite buzzword, FREQUENCY (Can make above point while going to the next slide and allowing the animation to run)
- Tell me, how many of you in this room have had this same experience? How many of you have been served the same ads, in the same order, over and over and over again? I know I have. Frequency is increasingly becoming a bigger issue and pain point in our industry today, but what are we doing to ease the concerns of our advertisers? Based on what we’re seeing in digital media today…not much. (click to next slide)
- Remember the rule of 7 that marketers used to rely on? It stated that people needed to see your marketing message seven times before it has a material effect. What we know now is that the sweet spot exists somewhere between 6-10 times Upon relaying this KPI to your agency or sales rep, they tell you, “not an issue.” They’ll run the campaign as planned, later reporting that reach was close to target, while frequency was approximately 7. (next slide)
- The reality is that this is what a typical impression distribution looks like today. Many users may only be reached once or twice unless actions to control frequency were placed on the campaign upfront. It’s easy to see as a consumer where issues with frequency live, and with which publishers…just go try and watch something yourself. A lot of FEPs show the same ad every break, and even in the same order!!!
- What is the immediate effect of these issues that we’re seeing? We’re seeing viewers flee TV in favor of platforms that promise them less clutter, fewer ads, and less repetition. In fact, some of what we might refer to as ad-avoidance might be better termed as “paying for stuff”…
- This issues are driving people in droves to services like Amazon, Netflix, and Hulu for lighter commercial loads, less clutter, and a better overall user experience. These platforms are direct beneficiaries of what we’ve termed in our industry as ad-avoiders. Take Hulu for example. While Hulu had always historically be ad-supported, back in 2015, they recognized that there was a sector of the population out there that would, under no uncertain circumstance, subscribe to Hulu if they would have to watch ads. Hulu caved in and launched their “limited commercial plan” to lure those consumers in order to increase their subscriber base. The kicker? The limited commercial plan is not 100% ad free. There is still a small percentage of inventory that is still ad-supported. On the other hand, we know that likes of other premium video platforms like Netflix and HBO are completely ad-free…thus adding to their allure
- We have to ask ourselves here...are we making the same mistakes as TV?
- TWO WORDS: AD BLOCKERS Two words that we’ve all become all too used to hearing. Today, over 25% of US consumers will access the internet with an ad blocker installed. Increasing clutter, ad loads, and frequency issues, may lead to the death of advertising as we know it if we’re not mindful about what we’re putting in front of the consumer, and the increase in ad blockers is evidence of this
- It's up to all of us - platforms, publishers, brand marketers, creative and media agencies - to make sure we're delivering ad experiences that will keep the audiences engaged. At the end of the day, consumers have the power, there’s no question. How? You ask?
- It’s all about the consumer. We all attend conferences like this to talk about viewability, measurement, ad fraud, the list goes on and on. We forget the consumer. We need to put them first, where they belong.
- So here’s how Spotify is solving for the issues in our industry today We want our viewers to think of advertising as a gift…whether you’re working out, chilling, doing chores, or driving, Spotify is with you everywhere that music can be. And what you listen to is connected to how you’re feeling right then. Which means that our dataset gives us a deep understanding of our audience, because it’s capturing their emotional state
- Spotify’s video ads appear in broadcast quality environment, with guaranteed viewability, little to no ad clutter, all in a brand safe environment that has the users’ experience top of mind. Our Sponsored Sessions unit gives the Spotify viewer the option to listen to an ad in exchange for 30 minutes of uninterrupted, ad-free listening. Add your usual color here on the unit. Viewability being high, people stick through to completion, etc.
- And we have proof that it works Spotify’s Sponsored Sessions gave Wild Turkey the perfect opportunity to reach their target audience of millennial men when they were actively engaged on Spotify. The Sponsored Sessions format allowed Wild Turkey to ensure their campaign received completed views, so they knew people were truly engaged. Wild Turkey also tapped into Spotify’s streaming intelligence to reach their ideal audience. The campaign was targeted based on demographic, playlist and a specifically identifiable segment of Alcohol Purchasers. They used the campaign to promote their tagline “Real Bourbon. No Apologies.” By delivering this message to a completely tuned-in audience, they drove increased brand association with that tagline. 41% lift in consideration, 367% lift in awareness, and 39% lift in brand affinity
- While standalone formats perform well, we know at Spotify that combining video with other formats can help reinforce a brand’s message in addition to brand awareness and ad recall
- Take for example, this great work for SEAT (Say-at) Germany (click next to play videos). This multimedia campaign which cleverly incorporated video and audio shaped a holistic campaign that even integrated into their TV ads. SEAT Germany completely redesigned their new Ibiza model and wanted a special launch to reach young, urban audiences and to engage them while introducing the new car model. We developed a custom microsite which allowed users to analyze their listening behavior on Spotify to determine their personal “Moving Score” — a metric that measures the danceability of their latest streams. Users received a personalized playlist that matched their music taste, and a recommendation for the perfect SEAT Ibiza configuration based on their favorite music. Users were paired with either sporty, or more elegant and sleek recommendations. SEAT promoted the microsite in an integrated campaign using various channels, including a multi-format media strategy across mobile and desktop on Spotify. They also integrated Shazam into their SEAT (Say-at) Ibiza TV commercial, in an execution that redirected users to the microsite. This campaign was so successful, it was also rolled out in Italy, Mexico and Portugal after its launch in Germany.
- We offer so much more than just the ability to run an advertiser’s :15 or :30 second video spot on Spotify. While we offer turnkey solutions for each and every advertiser’s video goals, we can also create custom solutions that will help build a relationship with your audience through platform-tailored ad experiences
- (click to start video) We have access to artists at Spotify. They’re constantly coming through our doors, and into our recording studio…. Our branded content video ad format, Bag Check, is our branded content series in which artists give us a rundown of their on-the-road essentials, which they always keep in their bags Earlier this year, we partnered with Sephora and artist MOONzz to put a spin on the concept timed to festival season. The series featured MOONzz creating three festival-ready makeup tutorials with best-selling Sephora products.
- We would treat this just like any other video, and it would run cross-platform for maximum impact…here’s how it would look within the Spotify platform
- Last, but not least, tactic #4…building a relationship with your audience…and there’s only one way to do it…by building a relationship built on trust.
- Fans trust Spotify to help them discover content they love in an experience that’s personalized, and brands benefit from this trusted relationship. We’ve built a trusted relationship with our audience of 180 million fans all over the world and we bring value and positive feelings to our audience’s lives through our platform. In a recent study, millennials named Spotify their most trusted platform. 92% told us they trust Spotify to provide a reliable service, and to protect their data. In another study, users rank us the #1 platform for trusted quality content and for enjoyable experiences. (Source: Protobrand & Spotify “Ad Research” 2018, in comparison to Pandora, YouTube, Facebook and Instagram, Deezer, iHeart Radio, Radio)
- We know how critical trust and brand safety is in today's media climate and how important it is for your investment to be validated. And that's why we recently asked our audience about trust when it comes to digital streaming platforms. In a recent study, we learned that Spotify fans trust us more than other streaming entertainment platforms: - 92% of Spotify users trust Spotify (Vs) - 76% of YouTube users trust YouTube - 76% of Apple Music users trust Apple Music - 68% of Pandora users trust Pandora - 63% of iHeartRadio users trust iHeartRadio
- Through all of these tactics, Spotify has found the balance between prioritizing the expectations if its 100 million+ ad-supported users, and at the same time, delivering for its advertising partners, and our video formats are no exception. What are you doing to keep your responsibility to the audience top of mind?