Spotify makes a case for audio, podcast ads

As Indians listen to more music while under lockdown, Spotify feels there is untapped potential for audio ads. Here are some brand considerations.

With the onset of the Coronavirus pandemic, marketers have been turning their attention to digital advertising. There has been an influx in digital advertising from various brands (not just digital first ones), and Spotify, in its latest presentation, makes a case for audio and podcast ads.

The meet was helmed by Arjun Kolady, head of sales – India, Spotify, and Shekhar Banerjee – chief client officer and West head, Wavemaker India. The beginning of the presentation spoke about myths surrounding audio ads. A marketer might assume that seeing is more effective than listening. The consumers find audio ads boring, or that they simply don’t work.

Kolady began by sharing numbers about ad consumption and monetisation in other countries. 27 per cent spend their time watching digital videos and about 34 per cent of videos are monetised.

He explained that audio ads have a high rate of effectiveness, since users are plugged in and concentrating while listening. There is no media clutter that can distract them from the content that is being delivered.

Since lockdown began, Spotify has seen an increase in the time spent listening to podcasts, and sharing playlists. There is a myth that a pandemic is not the right time to use audio ads, but they can be leveraged effectively.

To illustrate examples of effective audio ads, Kolady talked about ads by HBO for ‘Game of Thrones’ (made with 3D audio). He also spoke of an ASMR ad with Schweppes water to demonstrate the effectiveness of contextual ads.

The environment that users consume content in has also changed drastically. The mobile phone has become more of a remote to control music on different devices (such as Alexa speakers). It is more than a device to consume music on.

Spotify expects that by 2020, the time spent listening to digital audio will surpass that of radio. This is another aspect of audio consumption that has changed because of the lockdown. Since users were no longer listening to the radio on their commute to work, there has been an increase in listening to digital audio content.

Kolady played an ad as example to illustrate the difference between radio and audio ads on Spotify. Radio ads tend to be loud in a bid to sound different, and often had to outshout competition. The audio ads are high involvement, but the users are more perceptive to them as their tone tends to be vastly different.

In India, Spotify hasn’t started running ads on podcast content yet. But in the West, there are numbers to illustrate how engaged podcast listeners were. Forty-one per cent of the viewers trusted podcast ads, and 81 per cent listeners took action on these ads.

Some of the popular podcast themes in India include self-improvement, motivation, mental health. There is also an increase in playlists that users can listen to help people get to sleep and playlists to listen to while doing household chores with the entire family. Spotify's new 'streaming ad insertion(SAI)' offering is a way to monetise the time that people are spending on the platform.

Banerjee of Wavemaker India then spoke about the effectiveness of personalised video versus audio ads. He explained that when it came to personalising and targeting video ads, the cost of production tends to be quite high. With audio ads, it’s much easier to personalise content according to the average user profile of the person consuming the content.

He added that since social distancing is going to stay long after the pandemic ends, there might even be an increase in the number of people who are listening to podcasts and music, as they tune in while taking the liberty to maintain social distancing and avoid talking to people.

He also explained that it’s important for brand custodians to take into account what the brand ‘sounds’ like. “What would your brand sound like if you had to play an ad on an Alexa speaker, or if you had to create a contextual ad for a podcast? That’s when you need to account for everything, right from the tagline, to the musical logo, and other things. This becomes an important new facet of brand building,” Banerjee concluded.