Branded Moments bring vertical video ads to Spotify

Dive Brief:

Spotify’s ad-supported model now serves vertical video ads called Branded Moments, which run at the beginning of playlists and, when watched to completion, give listeners 30 minutes of commercial-free streaming. During those 30 minutes, display ads still appear when viewing the app, according to AdAge.
Branded Moments target Spotify's 70 million free listeners based on six different ‘moments’ of the day: chill time, workout, party, dinner, focus and sleep. Spotify VP of Global Partnership Solutions Danielle Lee claims the service can optimize for particular users “based on the playlists that they're activating,” per AdAge.
The music app's representatives were in New York late last week pitching agencies and brands deemed a good fit for the platform. Bose, Bacardi and Gatorade are already partnered with Moments, which is still in beta but will be available in additional markets in early 2017, according to Spotify

Dive Insight:

Spotify’s paid subscription service has been a boon for a music industry struggling with physical and digital download sales, but its ad-supported model is still searching out better ways to monetize. The addition of vertical video shows a concentrated — and somewhat tardy — effort to reach more mobile consumers, following major players like Facebook, who first embraced the ad format for its mobile news feeds in August.

As AdAge notes, Spotify will likely encounter an opposite problem than Facebook when it comes to video engagement, as Facebook users can watch ads without the sound on while Spotify users can listen to ads without actually watching them.

While brands like Bose are accounting for this gap by creating campaigns that communicate the same message both visually and through audio, measuring engagement of that type is tricky. Facebook landed in hot water late last month over news that it inflated its viewership metrics by anywhere from 60% to 80% over the past two years.

However, Spotify's new spots provide a more clear incentive to watch ads in full by offering 30 minutes of interruption-free listening afterward, a trade-off that might help consumers better understand the value ads provide free content platforms.

While Branded Moments might also be a great way to target audiences, drawing on data from the some 2 billion playlists made through the service, it's hardly a novel approach, and clearly takes a page from competitor Pandora, who rolled out updates in September that gave listeners more song skips for watching sponsored videos.