This post is sponsored by Spotify.
As the advertising industry continues to evolve, what are some of the current trends that marketers should be looking out for?
Today, we as consumers are constantly bombarded with messages from every platform available. But is it truly effective? Content marketing in the age of data often focuses on understanding what people are doing rather than how they are feeling. And consumer decisions rely heavily on emotions they experience too. Consumers of today are looking for content that would complement and represent moments that are relevant in their lives. By reaching audiences during moments that matter to them, brands can now leverage their content with personalized messages to their user, based on the user’s state of mind. The unique ability of micro-moments to flex to consumers’ need, makes it an especially powerful marketing tool, as brands reach their audience when they’re most engaged, with personalised content that matches their moment.
What are some of the challenges that marketers face in today’s advertising space?
With rising demand of mobile, online video and social media, the digital ad space has seen massive growth in ad dollars. This should be no surprise considering how deeply integrated we, as consumers ourselves, are involved in the digital world. On the whole, as a region, we can expect that the government’s dedication to connectivity and smart nations will spur this growth trajectory in time to come. That itself is an opportunity for advertisers to tap into the growing market of urbanised middle class consumers.
However, not everything in the advertising industry is rosy. A report from the World Federation of Advertisers estimates that approximately US$50 billion worth of ad dollars would be lost to advertising fraud by 2025. Simply put, these advertisements never truly reached human viewers. If left unchecked, advertisers could stand to lose a staggering US$150 billion by that year. Yet, despite the fact that this is a serious threat to the industry, it remains an existential problem that advertisers acknowledge but do little about. This calls to question a fundamental issue of how we measure viewability – what defines it and how then should advertisers measure and pay for it.
Ad viewability is particularly challenging for online video ads and most advertisers do not fully understand how their ad dollars are being translated into results. For instance, many digital players in the market charge by views; video starts, advertisers pay. This is regardless of the multitude of factors that contribute to the user’s ad viewing experience. Do you know if the audio is on? Are the users logged in? At what point can you be sure that your message has been received by the viewer? So many questions, but so little that the current metrics has to offer.
With zero ad fraud in Spotify’s system, which also means more brand safety and transparency, do you think that Spotify is well-placed to make a difference in the industry?
As a brand that is dedicated to providing the best experience not only to artists and users, we want brands that advertise on our platform to have a good experience as well. We strive to ensure there’s zero ad fraud in our system. We have 100% share of voice – there’s no scrolling past advertisements – so there’s very high levels of viewability. As our users progress through the day whether listening to audio ads or watching video we want to make sure that advertisers know that when they have ads out there, they are seen or heard, possibly most importantly, by-a-human. Are You a Human, a company dedicated to identifying fraud, has highlighted that 58% of internet traffic is driven by bots! Meanwhile, Spotify has 100% logged-in users and bring zero fraud to the ecosystem. As sellers we want to be certain about what we are selling; we want it to be relevant and of the best quality. I am excited to go to market with inventory that leads the market.
To complement this stand and ensure that we are competitive and are able to meet the advertising needs of brands, we have a full suite of digital products, including video, display, and audio. Audio and video are certainly where the growth is.
People-based marketing is the industry’s current hot topic, what are your thoughts on this and do you believe brands should be looking into this concept?
According to a 2016 study from Accenture, 75% of consumers are more willing to buy from companies that are able to recognize them as individuals and provide recommendations that meet their particular needs. Consumer decisions rely heavily on emotions they experience too. According to data from various functional magnetic resonance imaging neuro-imagery scans, consumers use emotions rather than information when evaluating a brand or product. This is also why content shared by friends or influencers are often a catalyst for consumer action. Taking into consideration of our highly personal environments, content needs to be perceived as trustworthy, authentic and relevant – all strong human emotions – to inspire consumers to take action.
We believe that people-based marketing is definitely a way forward for many brands to reach their target audiences successfully. As part of our education story, we recently introduced out first Spotify Digital Day in Malaysia, during which we covered the concept of streaming intelligence and people-based marketing. We spoke to over 250 attendees on the benefits of people-based marketing and how as the advertising industry continues to evolve, we as marketers need to be open and flexible to changes.
There is a study conducted by Spotify around understanding people through music, how does this tie back to the concept of people-based marketing and why should brands consider this approach?
Understanding people through music, a Spotify-led research has become a key part of our data mission. The theory behind the work: because music listening is so uniquely emotional, universal and, now, addressable thanks to streaming, it can uncover deeper insights than consumption of other kinds of content like movies and TV. Music as we know it, is weaved into our everyday lives. There is a song (or a playlist) to represent each moment of our lives. These moments can be as simple as having a shower before heading to work or preparing for a night out in town. Music reflects who we are, what we are doing and how we are feeling in any given moment. And thanks to music streaming services, people are listening to music and amplifying these moments more than ever.
What does this mean for brands? Streaming opens up an entirely new set of addressable moments for marketers. The music streaming ad revenue opportunity is worth US$1.5 billion today, and it’s expected to reach at least US$7 billion by 2030. Audio’s unique ability to flex to consumers’ needs makes it an especially powerful marketing tool. The mobile moments “at work” and “working out” alone have opened up US$220 million in ad revenue opportunity. With that in mind, we believe brands should leverage audio to reach out to their audience when they are most engaged, coupled with the right message that matches that moment in time.