Harnessing Programmatic Solutions For A Better Music Streaming Experience

A mere buzzword five years ago, programmatic has grown to become a significant force in today’s advertising ecosystem. Programmatic spending has reached $25 billion in 2017 and is projected to surpass $43 billion by 2020, when programmatic penetration of the digital ad market will be 63 percent.

The merits of programmatic technologies lie in its ability to effectively tap into real-time consumer data and develop more targeted digital advertising campaigns. Programmatic advertising enables businesses to better understand how consumers interact with their products or services through deep data and insights, and subsequently makes it easier to deliver ads to the right audience at the right time and place.

Thus far, programmatic display advertising has been the dominant trade channel in Asia, alongside Video-on-Demand and Social. However, there is another form of programmatic to watch out for: programmatic audio.

The Power of Music – and Digital Audio

Today’s consumers are not just watching videos on YouTube or binge-watching shows on Netflix, they are plugged into their favourite playlists or podcasts as well. Digital audio streaming is on the rise thanks to the explosion of mobile and accessible, quality content. According to the Global Music Report 2018 by the International Federation of the Phonographic Industry, music streaming revenues grew by 38.2 percent. Nearly 80 percent of music listeners used an online streaming service from October 2016 to 2017, with 60 percent of music streamers listening on mobile, compared to 40 percent of TV and movie streamers.

Audio when combined with mobile is particularly powerful – giving advertisers the power to reach users in screenless moments when they are on the go.

As music listening is so uniquely individual, emotional and, now, addressable thanks to streaming, it can uncover deeper insights compared to the video content, where there is less of an emotional connection. There is a playlist to represent each moment of our lives.

Hence, music streaming is opening more avenues for marketers and enabling them to truly connect with consumers more intimately. The music streaming ad revenue opportunity is worth $1.5 billion today, and is expected to reach at least $7 billion by 2030.

Tuning into the Potential of Programmatic Audio

As 80% of music streaming listening is done through headphones, the result is a uniquely 1:1 ads experience which can capture the attention of the listener. Couple this with rich data and advertisers are able to create an intimate, highly relevant message for their potential customers. In addition, programmatic audio is inherently automated, making it easier for marketers to incorporate them into their omni-channel marketing strategies.

Brands are able to target consumers based on their demographics, listening habits and even their moods. A person who is listening to a workout playlist can be greeted with ads on fitness gear and not fast food – a far more relevant experience.

In Asia, there is no cookie-cutter strategy for marketing or advertising because of the sheer diversity in the region. However, rich data fueled by local audience insights is paving the way towards hyper-targeted personalised marketing.

Given the strong emotional bond audiences often form with their favourite music content, marketers have the opportunity to leverage on-demand music streaming platforms to deliver advertisements that connect better with audiences and seamlessly blend into the overall music experience.

Still, not all platforms are built the same and it’s important for marketers to be aware of the industry issues that blights the ecosystem – for example, ad fraud and invalid traffic. Advertising on the right platform, one that actively monitors its environment to reduce or eliminate the influx of bot traffic, will set the benchmarks that will give future campaigns a significant edge in intelligence and cutting-edge engagement.

Understanding people through music has become a key part of Spotify’s data mission. With over 180 million active users across 65 markets and ubiquity across devices, there is potential to use incredibly large and rich datasets to truly take the advantage programmatic technology affords to serve the right message to the right person, at the right time.

As consumers are increasingly pressing ‘play’ across the world, the potential gains to be reaped from programmatic audio, music in particular, are huge. Audio opens new doors in engaging with audiences in a more intimate and personalised manner, and there is no better time than now for marketers to tune in.

By Dan Robins, Head of Programmatic, Spotify, Asia Pacific