Music streamer aims to build revenue with real-time, highly targeted service
STOCKHOLM—Swedish music-streaming company Spotify AB on Wednesday launched programmatic ad buying for all its markets, allowing advertisers to target its 70 million nonpaying users by age, gender, genres and playlists in real time.
Spotify said it is joining with online-advertising technology companies AppNexus, Rubicon Project and The Trade Desk to offer ad buyers an online bidding environment with access to Spotify’s data on its users’ listening habits and demographics, including age, gender, location and language.
Through the platform, advertisers in Spotify’s 59 markets can automatically tailor ads for certain audiences in real time, such as listeners who are commuting, working out, dining, dating, partying or relaxing.
Spotify’s move comes as it is attempting to raise its advertising revenue, facing increasing competition from Apple Inc.’s streaming service, Apple Music, which launched little over a year ago but already boasts 15 million paying subscribers, compared with Spotify’s 30 million.
While Apple offers only a paid subscription, Spotify has a free service with 70 million users who sit through 15- to 30-second ads between songs. Both Apple and Spotify charge around $10 a month for a paid subscription.
Stockholm-based Spotify nearly doubled its revenue in 2015 to €1.95 billion ($2.15 billion), but nearly 90% of that came from paid subscriptions and only €195.8 million from advertising. Spotify reported a 2015 net loss of €173.1 million.