How to create winning campaigns with Spotify ads

Spotify calls this a new golden age of audio, and the listening habits back it up. Too much screen time takes its toll, and more people are getting their content fix through their ears instead. Over one-third (104 million) of Americans listen to podcasts regularly.

Spotify sits at the centre of that shift as the world's most popular audio streaming subscription service. Spotify ad monthly active users increased to 574 million in Q3 2023, a 26% year over year increase, and more agencies are tapping into the platform to deliver results for their clients.

This audio-first platform is a real opportunity to advertise your clients' brands. Targeting data built on listeners' moods, low entry budgets, and free production tools make it a channel you can test without a large commitment. Whether Spotify Ads already drives demand for your clients or it's still on the roadmap, it's a growing way to reach an audience that is actually listening.

Here's how to build a Spotify ad campaign that earns its place in the media mix, and how to report on it without adding hours to your month.

Key takeaways

• Nearly 63% (361 million) of Spotify's monthly active users are on the ad-supported tier, a 32% year over year increase.

• Ad Studio is self-serve with campaign minimums starting at $250, and its free scripts, voice actors, and mixing tools mean a pilot ad costs no extra production budget.

• Spotify's research found that multiformat campaigns combining audio and video drove a 90% increase in ad recall and 2.2X brand awareness.

• Ads with a direct call to action get 3x higher click-through rates, so write every script around one specific action.

• The Spotify Ads integration in AgencyAnalytics imports campaign, ad set, ad, and audience data automatically, so reporting is handled from day one.

Spotify ads: what you need to know

Spotify gives marketers and brands access to a large, logged-in, ad-supported audience. Of Spotify's total monthly active user base, nearly 63% (361 million) are ad supported, which represents a 32% year over year increase for the streaming platform.

With multiple ad formats and broad demographic ranges (age, gender, and location), advertising on Spotify gives you a way to reach your clients' audiences in an engaging, emotional way.

Spotify suggests combining video and audio in your clients' ads. Their research shows that when audio and video ads work together, they drive significant brand impact. Their study found that multiformat campaigns on Spotify resulted in a 90% increase in ad recall and 2.2X in brand awareness.

Source

So take advantage of that engaged audience and focus on three things when running a multiformat campaign:

1. Quality messaging

2. Strong ad creative

3. Contextual relevance

On the subject of video, Spotify allows marketers to run unmuted video ads. Unlike other video advertising platforms such as YouTube, you can be sure the user will actually hear your client's ad.

A lower barrier to entry for audio ads

Podcast advertising is effective and on the rise. Most agencies have a few clients that would love to place their products in different mediums and want to take advantage of Spotify Ads' continual growth in ROAS. But when your team's resources are limited, the extra effort to set up a new reporting system for the platform is often the roadblock.

That part is taken care of. Connect the Spotify Ads integration in AgencyAnalytics for comprehensive reporting, and your team can focus on optimizing newer campaigns to improve ROAS and measure brand effectiveness for your clients.

With reporting handled, adding a new advertising channel for a few willing clients gets a lot easier. Test the free voiceover tools and mixes Spotify offers, produce professional-quality ads for a pilot campaign, and build brand awareness without a production budget attached.

How do Spotify ads work?

First, you'll need an account to use Spotify's self-serve ad manager, Ad Studio. This is where you set up your clients' campaigns. Over time, as you gather Spotify ad metrics, you'll be able to experiment with the platform to find the best mix of messages and mediums to drive improved ROI.

Note: Your Spotify account is different from your Ad Studio account. You will need to create a Spotify Ad Studio account using your Spotify account to start running ads.

Get started by following these steps.

1. Define your target audience

Reach the right listeners based on:

• Demographic: age, location, gender, and languages

• Behaviours: interests, fan base

• Contexts: platforms, music (including genre and real-time contexts)

• Custom targeting: Spotify currently offers custom target options for advertisers working with their full-service sales team. Your agency can contact them to learn more.

2. Set your budget

Ad Studio campaign minimums start at $250. Build a campaign that works for your client by setting a budget, start and end dates, and frequency caps. You'll only pay when the ad is served, and you can adjust the budget as needed based on customer demand and targeting criteria.

3. Create your ad for Spotify Podcasts (US only) and/or Spotify Music

Spotify's self-serve Ad Studio platform is free of charge and lets you make well-executed podcast ads fast. The free audio production services include a library of background tracks, access to professional audio mixing, and voice actors. Before any of that, you'll need to write a script. See Spotify's list of tips, tricks, and sample ads to get started.

When requesting a voiceover, you can hear a sample from the voice actor first. Keep your client's audience in mind, and their ultimate goal, when choosing the type of voice.

Then add instructions for the voice actor covering the emotion, tone, and speed of the ad. Spotify also has a variety of languages available, which adds a personal touch depending on where you run the campaign.

Source

You can always upload your own finished audio or video assets if you're working to specific requirements from your clients.

4. Measure your success

Get real-time reporting on ad performance and budget pacing for the full duration of the campaign. Spotify Ad Studio lets you track goals and adjust strategies as you go. Connect your client's Spotify Ads account to automatically import and visualize their campaign data alongside 85 other marketing platforms.

Why you should run a Spotify ad campaign for your client

Spotify has the data and the reach to target the customers your clients are looking for. There's no point investing time and money in a campaign that falls on deaf ears, and according to new research on the Attention Economy, Spotify ads are more effective at holding people's attention compared to other platforms.

Here are the other reasons to put a client's budget on the platform:

• Vast reach: You can target a wide variety of audiences across the 361 million listeners on the ad-supported tier.

• Emotional engagement: Music delivers an emotional connection, and Spotify knows the music business. They collect demographic data based on listeners' moods, locations, and activities. Upbeat tracks are preferred for gym workouts, for example, so that's a strong placement for a client promoting gym-related products. That level of detail lets you capture emotional engagement better than competing platforms.

• No skipping: Users cannot skip or fast-forward ads. And if they choose to watch a video, they're rewarded with 30 minutes of ad-free music.

• Large audience data: Because users are required to log in, Spotify has extensive data about how and when people listen, plus real-time information about lifestyle, entertainment preferences, family status, and technology use.

• Increase purchase intent: Users can see your client's ad while browsing the internet on desktop, which makes it easier to click through and take action.

Spotify users on the free plan have unlimited access to all kinds of music and podcasts, supported by 15- and 30-second ad breaks. As of 2021, Spotify reported that over 56% of its listeners were using the ad-supported version, a share that has since grown to nearly 63%.

That said, not every client's goals align with Spotify advertising. Half of the user base is under 35 years old, so reaching an older audience for a client will be harder to do here.

So is it worth advertising on Spotify? If the purpose is to reach the Spotify base, and your client has a product or service that translates into an engaging audio ad, it's worth testing. And if you're concerned about users tiring of ads and switching to Spotify Premium, the free tier isn't going anywhere.

Spotify's VP of Product, Jason Richman, confirmed back in 2017 that the company views its free version as a separate service that it wants people to use.

“It feels like much of the market looks at Spotify as a premium business model and free is a path-to-paid,” Richman said. “It’s [always] been mission one to keep ‘free’ free and protect it from existential threats.”

Spotify has proven itself as a worthy platform to advertise on, alongside the advertising platforms from Google, Meta, and the like. And it's on track to stay that way.

What types of ads does Spotify offer?

Classic Spotify ads are audio ads with a maximum length of 30 seconds, played between songs. A branded display image appears in place of the usual album cover while the ad runs.

But it doesn't end there. Spotify offers a range of formats built to engage listeners rather than interrupt them.

Audio ads

Short audio ads served between songs with clickable display content.

• Best suited for engaged listeners on the go.

• The ad includes audio *and* a clickable companion image with a call-to-action (CTA) in place of the album art.

• Spotify's research shows that the higher the frequency of your audio ad, the higher the conversion rate.

• Platforms: mobile, desktop, tablet devices.

Video takeovers

Your client's 30-second video ad is served between songs, only when the user is interacting with their device, including a companion banner with a customizable CTA.

• On industry benchmarks, Spotify's video view ads take the lead in viewability scores.

• Audio and visuals together let you build more brand awareness than audio alone, and the combination has been proven to perform exceptionally well against its audio-only counterpart.

• Platforms: mobile and desktop.

Sponsored session videos

Your video unlocks 30 minutes of ad-free listening if a user opts to watch the full video.

• Like video takeovers, these ads only show when users are engaging with their devices, which gives your clients a higher retention rate.

• You don't compete for your client's audience. Your client's brand is the only one visible for the next 30 minutes.

• It's a hard combination to beat: audio, visual, undivided attention, and 30 minutes of brand exclusivity.

• Platforms: mobile and tablet devices.

Homepage takeover

Showcase your client's brand message on the front of Spotify's desktop homepage for 24 hours.

• This clickable ad supports rich media (GIFs, YouTube links, hyperlinks, and more), so you can add interactive elements to hold attention.

• Platforms: desktop only.

Podcasts (currently U.S. only)

Your audio ad is woven into a specific, targeted podcast.

• Deliver your client's message with trusted voices, or use Spotify's audio creative options.

• Voice-talent ads are pre-recorded by an actor and dynamically inserted into podcast audio. A good option for driving upper-funnel awareness, extending the reach of a campaign, or targeting a specific genre.

• Host-read ads are voiced by the show's host, created in the style of the show. This format builds an emotional connection because the ad is read by someone listeners already know and trust.

• Diversifying spend with host-read *and* voice-talent ads across several smaller shows tends to work better than putting everything into one large podcast show.

• Platforms: mobile and desktop.

Spotify ads campaign best practices and tips

• Build strong messaging: Be clear, concise, and conversational so listeners grasp the point quickly. It's a good place to plug a sale or a promo code.

• Include a clear call-to-action: You don't have much time in a Spotify ad, so tell users exactly what to do with a strong, specific CTA like "Find [product] at [website]." Ads with a direct CTA have 3x higher click-through rates.

• Put listeners first: If you're targeting a city like New York, try starting the script with "Hey New York." It personalizes the ad to that audience while keeping the tone conversational.

• Test and learn: Look at the ad metrics to check you're meeting or exceeding target KPIs (Key Performance Indicators), and adjust from there. Another Spotify ad type may serve the client better.

• Try ad rotation: Customize how multiple ads are served to your client's audience to optimize performance across platforms. The rotation options are:

• Even rotation: All creative assets are delivered randomly and evenly. Use it to test new messaging ideas and see which perform best.

• Weighted rotation: Prioritize certain ads over others for increased visibility, such as timely promotions for seasonal sales and time-sensitive deals.

• Sequential rotation: Choose the order in which users hear or see your ads. Use it for episodic ads that tell a story, or to guide users through stages of your client's marketing funnel.

What Spotify ad analytics tell you

Spotify ad analytics show how campaigns are performing on the platform, which tells you how ads are landing with listeners and how effectively they're driving engagement and conversions.

The value is in what you do next. Detailed performance data lets you optimize ad content, targeting, and budget allocation on evidence of what's working rather than a guess. It also builds an understanding of listener behavior, preferences, and trends, which feeds into more personalized and relevant ads for the next campaign.

Building Spotify ad reports in minutes

Spotify's Ad Studio is a powerful audio advertising tool, and with the AgencyAnalytics Spotify Ads reporting integration, you can pull all the metrics your clients care about into one reporting platform. Combine them with other marketing channels to show the complete picture of a client's marketing performance.

Connect the Spotify Ads integration in three steps

1. *Navigate to the campaign you'd like to connect to the Spotify Ads integration.*

2. *Click on Integrations from the menu bar and then on Spotify Ads from the list of integrations.*

3. *You will first be prompted to connect to a new account, where you will enter your Spotify Ads credentials.*

After you enter the login credentials, the integration is complete, and your client's Spotify Ads metrics are imported and displayed within the dashboard.

Use additional data and filters to dig further into campaign performance, including engagement rates, video completion rates, view-through conversions, and more.

All of these metrics are organized visually in your Spotify Ads dashboard and updated automatically. The dashboard is divided into tabs for Account Summary, Campaigns, Ad Sets, Ads, and Audience.

Summary

The default mode of the Summary section gives an immediate snapshot of how your client's Spotify Ads efforts did over the last 30 days. It visually represents key metrics such as:

• Hourly breakdowns

• Campaign summary

• Ad Completion

• Spend

• Clicks

• Skips

• Impressions

• Brand lift

• And more

Use the widgets on the right-hand side of your dashboard to drag and drop any key metrics you'd like to see.

Campaigns

This tab is a more detailed view of the campaigns themselves, with granular detail on:

• Impressions

• Clicks

• Spend

• CPC

• CPM

• CTR

• Completes

• Demographics such as age, gender, and location

• And more

Ad Sets

This is where most of your client's ad performance data lives. View performance and targeting information for each ad set, such as platform type and gender targets. Compare how ad sets are performing with visual graphics that break down clicks, CPC, impressions, and more, all by ad set.

Ads

Browse through the ads and track their status, whether they've been approved, whether they're still active, and whether the ad resonates with the target audience. See how each ad performs against the others to improve your creative, and preview each one without leaving the dashboard.

If you run ads for multiple clients from a single Spotify Ads account, select the campaigns you want to appear in each client's dashboard so they only see their own data.

Check out how easy it is to navigate in the video below.

Bring metrics from Spotify Ads in to analyze the data and build comprehensive client reports in minutes with AgencyAnalytics. Start your free 14-day trial today!