The days of advertising are gone, Spotify says

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The days of advertising are gone, Spotify says

We are expanding our advertising business marketing workforce to over 70 percent in Europe, Australia and Canada and that's off a pretty solid base, Lee Brown, Spotify's CEO of marketing, said in an interview.

As far as long-term strategy goes, I think that the days of advertising being less than 10% of our total revenue are gone. Spotify has also employed an international ad industry executive with 25 years of experience to help lead international sales, Brown said, though he did not give a name.

The company, which earns revenue from free subscriptions and distributes ads to non-paying users, saw its advertising business return to growth this year after being hit by the pandemic.

What out of its 365 million monthly active users, 210 Million are advertising supported, totaling about 12% of its total revenue.

An ad not only creates revenue for the firm, but it also reduce 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% over the previous three months - has helped boost ad revenue as podcasts bring more users and allows more time for ads.

The company is looking to add more tools for advertisers, and will make its podcast advertising and publishing platform Megaphone available in Germany, France, Spain and Italy.

Megaphone, bought by Spotify last year, offers tools to podcasters to create ads for their own programmes, for which they receive income, and to measure their reach. It is currently hosting about a third of the top 200 TV 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.org. com content spotify-pandora - lead-us - audio listeners overtake Apple in Podcast listeners for the first time this year, according to research firm eMarketer.