Over the last few days I have been trying out Spotify as I was really interested in seeing how it uses audio ads to fund the service.
If you haven’t heard of Spotify it’s a free music streaming program (imagine iTunes with all the content in the Store being free) with over 3 million tracks and 1 million users since launching in February. You can’t download songs but you can listen to as many as you want.
So what’s the catch? Audio ads play at the rate of 4 to 5 per hour plus a few banner ads on the program itself and if that bothers you there is a paid-for premium service at £9.99 per month.
After listening for a few hours and trying all the features of the service I was amazed that you get so much for such little ad exposure. I would go as far to say that even 7 to 9 audio ads per hour would be fine. The ads themselves are pretty polished and low on annoyingness, it’s cool that the banners in the program change to match the audio ad when playing.
Audio ads are usually some of the most disliked by consumers in my experience through focus groups. Pandora famously conducted a trial in 2007 serving an McDonald’s ad to just over 100,000 users, with 100 writing in to complain and far more complaining around the web. Pandora decided to halt all advertising until announcing in January this year that they will start serving ads again. I’m guessing the great execution of audio ads on Spotify made them have a rethink.
So why did it work for Spotify and not Pandora originally? Read more…
