Hmmm . . . Spotify Is Testing Skippable Ads
Late last week word came out that Spotify is testing a new functionality in Australia called Active Media, which gives its free-side listeners the ability to skip ads at their discretion. Obviously giving listeners the ability to skip ads will improve the listening experience – who wouldn’t want that? But what about the clients whose ads are supporting Spotify’s free tier in the first place? According to Danielle Lee, global head of partner solutions at Spotify, the theory is that giving free listeners control over their ad experience can yield a supply of more targetable data for future ad delivery.
This theory makes for a nice soundbite, but there’s a fatal flaw in the logic. Think of all the product categories and brands out there who aren’t particularly exciting to hear about but are necessities of life. I’m talking about things like cat litter, insurance, eczema treatment, etc.. If you’re given a choice to skip or receive a life insurance ad what are the odds you’d sit through it? The problem is that listeners will opt out of certain ads more often, leaving those brands with fewer listeners to reach. There’s a reason nobody in the ad supported media universe ever does this – it just won’t work.
Also keep in mind this is the same Spotify who lost $464M in Q2. You’d think these guys would be looking for ways to run more ads to stop the bleeding and not pilot a new technology to run fewer ads. Am I missing something here?