Marco Bertozzi: How Spotify is future-proofing its business
Marco Bertozzi, VP of EMEA sales at Spotify, in conversation with Mediatel CEO Greg Grimmer
Spotify is investing in three distinct areas to ensure it remains a successful proposition as the audio marketplace evolves: content, discovery and access.
Speaking at Mediatel's Future of Audio this week, Spotify's VP of EMEA sales, Marco Bertozzi, said investing in podcast content presents a "real opportunity" for the audio streaming service.
"People are coming back, they're making appointment to view, they're listening the whole way through and they're reacting when they hear from their favourite hosts," Bertozzi said. "It's an area we absolutely see as the future."
Podcasts currently claim a 4% share of all digital audio listening, rising to 8% among 25-34 year olds, according to Rajar's MIDAS report for Q3 2019.
However, investing in podcasts means more than the aggregation of podcasts created by third parties. The "real opportunity" for Spotify is in the creation of its own content.
"We want to turn the primary focus of what we do onto originals," Bertozzi said.
Earlier this year Spotify announced the acquisition of two US-based companies to expand its podcast capabilities: podcast production company Gimlet Media and creation and monetisation platform Anchor. The investment has already started to pay off - between January and July, Spotify's podcast users almost doubled.
Furthermore, in its latest earnings report the streaming service claimed to have seen "increased demand" for podcast advertising following the acquisition, and said it expected to see fast revenue growth from the channel through the remainder of the year into 2020.
Spotify is also focused on optimising discovery personalisation, as Bertozzi claims that consumers, especially of younger generations, are increasingly looking to discover and curate their own audio experiences.
"If you can own discovery then I think you can own the marketplace when it comes to what people listen to and how they listen," he said.
Meanwhile, the final pillar to Spotify's strategy is to secure ubiquity of the service, so that consumers are able to listen to on any platform, wherever they are - whether that is through speakers or in-car.
Doing so means the platform can have ongoing conversations with its users throughout the day, learning valuable information such as what content they're listening to, what device they're listening on, and where. That level of connectivity "cannot be underestimated," Bertozzi said.
However, while music and podcast engagement is high, audio remains under-utilised by brands when compared to the visual marketplace. Not enough brands have guidelines for audio in place, and many are "playing around with it" rather than using it as a serious advertising medium, he said.
"[In advertising] your eyes are worth ten times more than your ears. That can't be right."
While Spotify hopes that heavily investing in all audio will help to close that gap, Bertozzi also wants creatives and advertisers to think differently about the proposition the streaming service offers.
"I often get asked by advertisers what the next shiny new thing is at Spotify. I find myself saying that the next big thing for you as an advertiser is to actually do something different and embrace this audio space," he said.
"Where people have done it well, they have won awards and cut through."
Bertozzi gave Mediacom's award-winning Spotify campaign for Snickers as an example of how advertisers and agencies can work with audio in an effective and creative way, as well as MAC Cosmetic's sponsorship of The Receipts podcast - which is an "interesting proposition" as it sees the luxury makeup brand depart from visual-focused ad campaigns.
"We just want to revolutionise how advertisers work with this medium," Bertozzi said.
"My message to advertisers is that not all audio is radio. You've got a whole canvas and opportunity to do different things, and you should be thinking about it."
According to its latest financial report, Spotify has 232 million global monthly active users, 129 million of which use the free, ad-supported model. The service made revenues of $165m from advertising during the second quarter, up 34% year-on-year.
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