STOCKHOLM Reuters - Spotify is planning to hire hundreds of staff to increase its advertising sales in Europe and elsewhere, as the music streaming service looks at increasing revenue from customers who don't pay a monthly fee but make up the bulk of its user base.
We are increasing our sales and marketing workforce to over 70% in Europe, Australia and Canada and that's off a pretty solid base, Lee Brown, Spotify's head of advertising business, said in an interview.
As far as the long term strategy, I think gone are the days of advertising being less than 10% of our overall revenue. Spotify has also hired an international advertising industry executive with 25 years of experience to lead commercial sales, Brown said, though he did not give a name.
The company, which earns revenue from non-paying subscriptions and by disseminating ads to paid users, saw its advertising business grow this year after being hit by the pandemic.
Of its 365 million monthly active users, 210 million are supported by advertisement, coming in about 12% of its total revenue.
An ad not only creates revenue for the firm, but it also lower costs, as it leads to fewer songs being played and, in turn, modestly lower royalties to be paid, Morningstar analysts said.
A surge in podcast content - Spotify carried 2.9 million podcasts as of the second quarter, up nearly 12% from the previous three months - has helped boost ad revenue, as podcasts pull in more users and allow more time for ads.
The company is looking to develop more tools for advertisers and will make its audio production and marketing platform Megaphone available in Germany, France, Spain and Italy.
Megaphone, bought last year by Spotify, offers tools for podcasters to create ads for their own programming, for which they receive income and to measure their reach. It currently hosts about a third of the top 200 shows on Spotify and Apple.
Spotify has been spending hundreds of millions to beef up its podcast business. Its competition with Apple has intensified after both launched paid subscription platforms for podcasters earlier this year.
The Swedish company is expected https: www.emarketer.de COM content spotify-pandora - lead-us - audio-listeners will overtake Apple in podcast listeners for the first time this year, according to research firm eMarketer.