Spotify’s self-serve Ad Studio—a tool that allows advertisers of all sizes to customize audio ads for the platform—is officially out of beta and expanding into 18 markets around the world, including many countries in the European Union.
“Since launching Ad Studio in 2017, we’ve provided businesses of all sizes a way to buy and create rich, targeted audio advertising on our platform in a turnkey, budget-friendly way,” said Derek Kuhl, Spotify’s head of self-serve advertising, in a statement. “As we come out of our successful beta period, we will continue to evolve our offering with increased capabilities, providing a unique toolkit that will allow them to reach our engaged audience.”
When the self-serve platform debuted in 2017, Spotify had about 140 million users, 50 million of whom were paid subscribers; just a few years later, the company boasts 271 million users and 124 million paid subscribers. In 2019, the Ad Studio began allowing advertisers to target podcast listeners as well as users according to interests such as comedy, cooking and technology.
Now, Spotify is upping the number of location options available for geo-targeting from 2,000 to 180,0000 globally. It’s also introducing new calls to action from which advertisers can select one of 13 options such as Share or Shop Now.
While it was in beta, Ad Studio was only available in the U.S., U.K., Canada and Australia. Now, it will be offered in full in New Zealand and is being tested in Argentina, Chile, Colombia, Denmark, Finland, France, Germany, Ireland, Italy, Malaysia, Mexico, the Netherlands, Norway, the Philippines, Singapore, Spain and Taiwan. While the ads can run in a country’s local language, the platform itself will be in English for now. Spotify is planning to introduce Spanish-language support in Spain and Mexico later this year, the company said.
Within the past year, Ad Studio has seen a 68% increase in monthly active advertisers and double the number of ads created on the platform, according to Spotify. A spokesperson would not provide precise numbers for how many advertisers are on Spotify, but said the majority of Ad Studio clients are small- and medium-sized businesses.
Brands large and small can upload a script, and Spotify will turn around a “fully produced audio ad with background music and voiceover” for free within 48 hours. The company says one-third of self-serve advertisers have used the tool.
“This is to Spotify what text ads are to Google,” said Barry Lowenthal, CEO of media planning and buying agency Media Kitchen. “I think it’s going to be that big a business for them.”
While Lowenthal’s firm represents major brands like Cargill, Kaplan and The Vanguard Group, he’s bullish on audio for small businesses as well and thinks Spotify’s offerings are a helpful way for any company to reach a targeted audience
“It’s going to unlock the power of Spotify for mom-and-pops and small businesses in ways that they haven’t been able to tap into it, and they’re doing it on a global scale,” he said.
While most online platforms have seen a surge in traffic during the COVID-19 crisis, it’s unclear how Spotify has been affected. A company spokesperson would not comment on traffic and usage, but there have been mixed signals.
According to app analytics firm Sensor Tower, Spotify saw an increase from an estimated 17.5 million mobile downloads in February to 19.4 million in March, an 11% rise globally.
But analytics firm Alpha Data says “overall [music] streams in the U.S. from March 13 through April 2 were down nearly 9% compared to the previous three weeks,” and Podtrac reports that U.S. podcast streams are down 10% since the start of March, most likely due to Americans commuting far less due to social distancing policies.
As Adweek previously reported, Spotify is seeing marked shifts in listenership. Acoustic, instrumental and “chill” music are having a moment, while children’s music is seeing an increase as well.
With many small businesses struggling, Lowenthal sees Spotify and its Ad Studio as a way for them to increase audience awareness in a smart way.
“I think that streaming audio, particularly our experience with podcasts, have been moving to be also a brand-awareness driver,” Lowenthal said. “So I think that small businesses need to have targeted awareness, and I think that a channel like Spotify is going to give them that tool.”