Spotify’s head of B2B marketing on keeping up with rising advertiser expectations

Marketing spoke with Jeff Rossi, Spotify’s global director of business marketing about rising popularity, accurate engagement targeting, and marketing to millennials.

With a background in media agencies, Rossi worked at running digital investment for big-name accounts such as P&G and AT&T. Five years ago he moved from agencies and worked on agency relations and marketing for Apple’s iAd products. Three years ago he began his tenure at Spotify, where he now manages the communication and marketing of the streaming service’s business solutions to partners.

Spotify’s platform and functionality enable the brand to offer advertisers personalised targeting opportunities to engaged listeners, millennials in particular.

 

Marketing: Spotify’s popularity has taken off in the three years you’ve been there. How has promoting Spotify as a platform for potential advertisers changed in this time?

Jeff Rossi: It’s been a big change. Initially, there were low levels of interest, and lower expectations. Now there’s a high level of interest, but with that comes a high level of expectation. What’s wonderful is we’re being invited to have more discussions with more partners, about more pieces of their business. They’re looking at things like our audience, our integrations and business partners, our data solutions. People are starting to look at all parts of our business. And really, they want to understand us more, and better, and faster.

It’s been exciting, it’s been amazing, people will take the meetings with us, which is great because we don’t have to fight for it, but now we walk in, we have to be smarter, we have to be better, we have to help them in our solutions more effectively.

 

M: How do you utilise the music and playlists people listen to to provide such high accuracy in targeting?

JR: I really think that it comes from a few different factors. One of the big ones is the connectivity you have to a consumer through streaming –  you’re perpetually connected to them. It changes the relationship; when you’re done downloading an Mp3, that relationship is over.

When you’re streaming, you are perpetually connected, which means, I can understand what content you’re listening to, where you’re listening to it, when you’re listening to it, and in which playlist you’re listening to it. That gives a lot of strong indicators. Given that we’re using first party logged in data, across all of our platforms, so it doesn’t matter if you listen on your phone, on your playstation, on your amazon echo, your logged in information follows you. 

What we have uniquely, in market, is being on-demand music service. Not only are we connected, but users are sending out stronger signals back to marketers, because we are taking very clear actions that can be measured and tracked.

If we start looking at that on a larger level, we can look at trends and behaviours, and start to look at how consumers are using Spotify, and understand what the best environment is for consumers and brands to have a conversation.

It’s a very exciting place, more so than some of our competitors, because Spotify is a very ‘lean-forward’ platform. We actually see the things you’re clicking to play songs, you’re creating your playlist, you’re more active than on things like listening to radio.

Globally, approximately one out of every two streams on Spotify is user-initiated. Through a skip, through a start, through a playlist. Those actions mean you’re more engaged with the platform, it means you’re paying more attention to the content, it means more opportunities for brands.

In radio, you put it on, set it in the background and go on with your day.

Related: Can reviving the Napster brand save this less successful streaming service? »

M: What are some key things you’ve learned about marketing to millennials?

JR: Obviously, it’s a very important demographic. However, we are trying to make sure that we are engrossed in all elements, from our oldest to our youngest segments.

In terms of millennials, what we see as we work so diligently to make sure we’re integrated into as many platforms as possible, provide as much content as possible, keep people on the platform, is that they’re an incredibly diverse group.

Millennials are consistently inconsistent. So, if you’re trying to chase them and nail them down into one construct, or one use case, you’re going to fail.

Instead, what you need to do is put the user first. Think about things like personalisation. We have our Discover Weekly Playlist, where our algorithms create a playlist for every individual. There’s an expectation of personalisation. There’s an expectation that it’s going to work.

This is a generation that was born in an internet age where they’re seeing smartphones and connected devices continue to grow. They expect it to work. So we have to make sure that we’re integrated in as many platforms as possible. Finally, we need to make sure that it’s a low barrier for them, because they have more options than anyone has ever had before.

We really hold ourselves to a very high standard, trying to develop new and exciting integrations and opportunities.

If you look at the evolution of our technology, there’s very big and exciting things we do, and then there’s small changes we make, about our UI, our user flow, all the way to building things like our new Running app we rolled out last year.

Instead of asking ‘what’s the right content for runners?’ we said ‘what’s the best Spotify for runners?’

And we actually changed our technology, so that there’s a section right now in the app, that beat matches as you’re running. It sees your footsteps and matches the beat. It knows there’s nothing worse than running against the downbeat of the song or than pulling out your phone and swiping, and moving around and looking for songs, so what it does is, it cross fades every song to make it a seamless run.

We’ve done that for things like parties, we’ve done that in many other ways.

We start thinking ‘what is the best Spotify for this millennial audience?’ Because they have been in this unbelievable evolution, and revolution of technology. We need to make sure we’re giving them the best solutions possible, because they have higher expectations than previous generations.

 

M: Have you seen any evidence of Spotify making an impact on the way artists plan, promote, write and record music?

JR: I don’t know if I’m the most qualified person to have this conversation, however, one thing we’ve seen is that by being a streaming service, as opposed to a buying mp3 model, we’ve eliminated the notion of buyer’s remorse.

So, what we hopefully have done is created a whole new way that people can say ‘I don’t have to question whether or not I’m going to buy something or not; sit at a rack and stare at it, make a decision, which album? which artist?’

So, hopefully what we are allowing people to do is dabble in, and explore new music. Now, if would be presumptuous for me to say that’s going to change artists.

What’s hopefully going to happen, is that model, does not make people have to worry about being commercially viable in selling an album. If you’re more experimental, and people want to dabble and test, there’s not that buyer’s remorse of ‘oh, I created something that might be a little off my norm, and I’m concerned I have to sell albums.’

Instead what we are, is creating this idea of ‘I can sample and taste and understand more, and explore and discover new artists.’

So, hopefully we find that a good recommendation and discovering, actually can open more doors and make more connections. And if it becomes a way that artists are going to take more chances, and change music, that’d be wonderful. I don’t have any specific examples though, to point back to that.

 

M: How does Spotify’s engagement and reach in Australia compare to other global markets?

JR: To take one small step back to my background in the agency world. We know that sometimes it’s difficult to compare partners that agencies work with. How do we start to understand the relative difference between a radio station and a streaming service? We deliver impressions, they talk about weekly listeners. They’ll talk about reach in a different way than we do. So it’s really important to look at a common currency. To understand, when it comes to the marketplace, is that, if we were measured like a radio station, if we looked at everything else, flat playing field, how does Spotify rank?

What we’ve seen is that we are the largest streaming service in Australia. We’re three times the size of our number two, according to Comscore. So, you can see that we have a major lead in terms of digital services. But what becomes interesting is, if as a planner, you separate radio and digital, what you’re not taking into account is duplication and reach. So, if I run a radio spot on a terrestrial radio station, someone may hear the same commercial again and again and again as they turn the dial.

By adding a streaming service, specifically Spotify, what we see is that we add 19% unique reach to a media plan. That’s incredible that we can start to say that we’re reaching an audience that is not on radio, or not in a major way. That marketers say, with the exact same investment, they can reach more people. That is what happens when we start looking at a common currency. We can look at ‘how do we deliver unique reach? How do we play a compliment to a radio marketplace?’

For every single radio station, we’re getting 19% more unique reach, which is going to be greater than any radio station to radio station comparison. If I sit in the car and turn my dial, the likelihood of listening to multiple radio stations is greater than the idea of listening to radio station, and stopping and opening an app.

It’s a completely different experience, you can deliver the same creative to a completely new and unique audience that you’re not going to reach through radio. An on demand streaming service, actually is more engaged than any radio station. With an audience of millennials that has so much content, and is so inundated with content, the ability to break through and get attention is really important. We are the number one in terms of reach, and we’re the number one in terms of attention.

The last point is that we ask about time of day and connectivity. And what we see is that radio actually spikes during drive time. in the morning and the afternoon but sort of drops in the middle of the day. Spotify streaming services, on the other hand, are perpetually connected. If you think about when you’re sitting at your desk, and when you come home, typically you don’t turn on  the radio. But you will come home and put on Spotify in house through your speakers.

What we can start to do is add a unique audience that is highly engaged, in places and spaces where people were not listening before. That’s the opportunity. We hope that marketers and agencies can start to look at this, because we think there’s an opportunity now to start changing some of the way we think about planning.

I would actually challenge the marketplace to say there’s a huge opportunity to start thinking about streaming services, the targeting capabilities we have, the engaged audience, and maybe instead of adding it onto a media plan, we should actually start our media plan with streaming services, and then look at larger broadcast partners like terrestrial radio to get the reach points, after you’ve exhausted the highest quality targeting that comes through by way of Spotify’s streaming audience.

 

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Ben Ice
BY Ben Ice ON 23 June 2016