Want to demonstrate the value of our audience to advertisers: Kristiana Carlet, Spotify

Podcasts have evolved beyond a mere source of entertainment, transforming into a potent medium for brands to establish meaningful connections with their target demographics. 

In India, a pivotal juncture has been reached, marked by a surge in popularity among an expanding audience. A Statistica report forecasted that the podcast market in India is expected to reach USD 1, 720 million by the end of the year.

Fueled by this surge in podcast consumption, on 1 December 2023, Spotify unveiled its latest offering — the Spotify Audience Network (SPAN). 

This audio-first advertising marketplace will allow advertisers to connect with listeners across content, both on and off Spotify, including Spotify Originals and exclusives. 

It intends to provide creators with a space to create content freely, while factors like getting an advertiser on board, reaching the right audiences and marketing their podcast are taken care of.

To kickstart these offerings, Spotify has onboarded publishers Audio Pitara and Ideabrew Studios, to help them leverage the network to monetise content through advertisers. 

Along with India, this initiative will be rolled out in Sweden, Brazil, Mexico, and Japan. 

To shed light on its potential impact on advertisers and content creators, Campaign India spoke to Kristiana Carlet, head of international advertising sales, Spotify; Brad Grealy, head of ad sales, JAPAC, Spotify and Arjun Kolady, head of sales, Spotify India. 

Edited excerpts: 

In the competitive landscape of streaming services, how does Spotify strategically tailor its advertising offerings to stand out, attract advertisers, and effectively engage diverse audiences globally?

Kristiana Carlet (KC): In the realm of advertising, our focus is on demonstrating the value of our audience to advertisers. To achieve this, we've conducted studies with external companies, ensuring objectivity. For the second consecutive year, our platform has been recognised as a leader in the Sonic Science study. 

In the first study, we observed that our audience actively engages on our platform, spending an average of over two hours daily — a substantial amount of time. The second study revealed an additional layer, indicating that our platform has a positive halo effect on our audience. Beyond engagement, users return to our platform because it evokes positive feelings.

These findings go beyond mere engagement metrics; they show that Spotify serves as a comforting space for users. In a world saturated with social media noise, our platform offers a refuge, and this sentiment resonates powerfully. 

For advertisers, this translates into a unique opportunity to connect with an engaged and positively influenced audience. Particularly in markets like India, where audio is still a nascent media, there's a journey ahead. We see ourselves playing a crucial role in educating partners and advertisers in this evolving landscape.

Regarding the behavioural insights, we share this valuable information with advertisers based on the Sonic Science study. This insight provides a deeper understanding of user behaviour, enabling advertisers to personalise campaigns more effectively. It's a powerful tool that enhances the advertiser-user connection.

Given the surge in podcast consumption, could you elaborate on how Spotify integrates podcast advertising into its overall ad sales strategy, and which metrics are proving most valuable for advertisers in this rapidly growing space? 

KC: Five years ago, our global market share was essentially non-existent—a stark contrast to where we stand today. In just half a decade, we've evolved from zero market share to becoming the leading force in the podcasting arena. 

Simultaneously, as the podcast user base grew, we seized the opportunity to monetise this platform, turning it into a substantial revenue driver for our company. This podcasting evolution has not only allowed us to deepen relationships with existing advertisers familiar with our offerings but has also catalyzed engaging new advertisers. In the podcasting realm, the key factor to highlight is creativity.

Creativity has proven to be a pivotal strategy for advertisers to embrace our podcasting platform. Leveraging our expertise in the space, we've introduced a level of creativity that may be entirely new for many advertisers and creative agencies. The challenge lies in crafting messages that resonate within this highly engaged user base. What consistently stands out across various markets is the effectiveness of conveying a message rather than merely selling a product. This principle has become a cornerstone for my sales team, driving successful client engagement by infusing creativity into the podcasting space.

Which metrics are proving most valuable for advertisers in this rapidly growing podcast space? 

Brad Grealy (BG):  Consider Gen Z as the target audience — they navigate various platforms throughout their day, encountering a substantial volume of ads.

The challenge for marketers lies in capturing attention within this highly sought-after demographic. Podcasts, given their intimate and individualised nature, excel at generating significant attention. Marketers are now strategically contemplating which platforms and content types yield the most attention. This shift is not exclusive to Gen Z but applies to any audience, as attention becomes a crucial metric for success.

What innovative strategies or tools does Spotify offer to creators and advertisers aiming to scale their presence and business on the platform, fostering a dynamic and mutually beneficial ecosystem? 

KC: We consistently prioritise maintaining balance within our ecosystem, considering the needs of both creators and advertisers. In terms of creators, we're progressively expanding opportunities for podcasters to distribute their content through innovative ad formats. This evolution extends to markets like India, where we anticipate a shift from audio-only to a more video-centric approach. 

Additionally, creators will soon have access to interactive tools, introducing features like polls and Q&A to enhance engagement within a secure and brand-friendly environment. As we incorporate more interactivity, we remain vigilant in ensuring a safe experience.

For listeners, our focus is on enhancing discovery features, particularly in the podcast space, where the abundance of content can be overwhelming. Investing in discovery becomes crucial to assist listeners in finding content that aligns with their interests. While there are existing discovery features for music, we recognise the need for a specialised approach for podcasts. Looking ahead, we envision the evolution of our podcast product, drawing inspiration from the success of personalised features like ‘Discover Weekly’ in music. This personalised approach will not only cater to individual preferences but also elevate the podcasting experience, mirroring the success seen in the music domain.

What can creators expect in terms of new ad products and enhanced measurement tools?

KC: In the realm of AI, we've been actively discussing our ambitious goal of translating our significant content into various languages globally. 

The first step has been taken—we've launched language translation in English, French, Spanish, and German. Now, creators can craft content in their preferred language, and it seamlessly translates into these four languages based on user preferences.

This is part of our ongoing investments in creator tools, and with the recent introduction of Spanish language support and monetisation, it's a significant stride forward. Looking at the advertiser perspective, the launch of Spanish language support represents a milestone in the evolution of our ecosystem. As we nurture this new ecosystem, anticipate the introduction of fresh ad products, advanced targeting capabilities, and, notably, enhanced measurement tools. This marks a crucial phase in our journey, bringing innovation and efficiency to the forefront of our evolving ecosystem.

Regarding Spotify's investments in advertising, especially with Spotify's Proprietary Audio Advertising Marketplace (SPAN) launch in key markets like India, how does the platform envision reshaping the advertising landscape in these regions? 

Arjun Kolady (AK): We established our presence in India in 2019, and on a global scale, Spotify's podcast journey has propelled us to a leadership position. In India, the podcast landscape has witnessed exponential growth on both the listener and creator fronts, contributing to the expansion of our overall ecosystem. Despite increased advertiser interest, a significant challenge persisted — the lack of scalable, measurable, and targetable solutions for podcast advertising.

Advertisers faced the dilemma of choosing between sponsoring a single podcast, collaborating with a specific creator, or creating their own, each option presenting inherent challenges. Bridging this gap and addressing the demands of advertisers, we've taken a significant step forward with the launch of SPAN in India. This three-sided ecosystem comprises creators, listeners, and advertisers, with SPAN serving as the connecting layer.

For creators, ranging from individual podcasters to large enterprises, including news organisations — SPAN provides a streamlined solution for monetising their content. By opting into SPAN, podcasters can efficiently monetise their content without the need to seek out individual brand partnerships. Spotify handles the advertising demand generation, making it a comprehensive solution for creators.

From the advertiser's perspective, SPAN offers a targetable and measurable option, aligning with the metrics traditionally associated with advertising on the music side of Spotify. Now, advertisers can seamlessly integrate both music and podcasts into their media plans, covering the complete spectrum within a single platform.

On the listener side, the introduction of a monetisation layer for creators results in the creation of more diverse, richer content. This expansion enhances the overall availability of content for consumers, creating a positive impact throughout the ecosystem. This development is a testament to our commitment to advancing the podcasting landscape, and we are excited about the possibilities it brings to all stakeholders involved.

Could you provide insights into Spotify's year-on-year global growth and highlight key factors driving these revenues in the ever-changing music and podcast streaming industry?