Spotify recently added a news feed that may help brands to reach consumers who now have another reason to check in with the streaming audio app. Its What's New feed resembles a key feature of many social media platforms to drive repeat visits by mobile users.
For people who want to get updates about their favorite podcasts and recording artists, the feed can help to sift through Spotify's ever-expanding library of content. More than 50,000 hours of content are uploaded to its platform every day, according to the company.
As consumers engage with this fresh content, marketers have an opportunity to glean insights into audience behaviors and quickly adjust their campaigns to improve targeting.
"This announcement is terrific for advertisers as it will enable them to quickly understand how and what new content is being engaged with by different user demographics across the platform," said Paige Leidig, CMO at social media analytics company NetBase Quid, in emailed comments to Marketing Dive. "This is similar to video streaming services that have added a What's New section to their service that is driven by the type of content that the user has watched in the past."
Marketers are taking greater notice of Spotify, as seen in its recent growth in ad sales. The company said its ad-supported tier, which is free to listeners, saw revenue more than double from a year earlier to €275 million ($326 million) in Q2. Results were especially strong compared to those of last year, when the pandemic led many advertisers to pull back on ad spending, but the company's ad growth has resumed since then.
"Spotify is crushing it. They continue to rapidly respond in adding content that is relevant and loved by their audience," Leidig said. "As a result of the continued pandemic, their audience is spending even more time enjoying this content, leading to more advertising spend coming their way."
As a sign of consumer affinity for Spotify, the company last month was ranked No. 3 behind Amazon and YouTube in NetBase Quid's annual Top-Loved Global Brands report.
By adding a news feed to its app, Spotify is adopting some of the engagement strategies that social networks have developed in the past decade. Like social media apps, Spotify lets users tap the "follow" button on the pages of artists and podcasts to see their new releases appear in the feed.
The app also added a bell icon that shows a blue dot when fresh content is available, similar to the colored dots in social media apps that indicate when news feeds have unseen posts or stories. The feature is less intrusive than mobile notifications, and gives people more control over the user experience.
"All of the apps are moving away from notifications because they're trying to be respectful of user privacy," said Christopher Tompkins, founder and CEO of online marketing firm The Go! Agency. "With Spotify's content living under that bell icon, they want people to feel a sense of urgency and constantly open that up."
While there are risks associated with redesigning apps in ways that people don't expect, Spotify's addition of the What's News section builds on existing features.
"The What's New feed is a natural extension of Spotify's legacy notifications for new releases, and seems to be a more streamlined way to consolidate all those notifications in a single place," said Sarah Dawson, a researcher at Forrester. "Spotify is in an interesting position because it's not social media, but its growth strategy appears to be following in social media's footsteps."
She cited Spotify's expansion into live events and live audio as other indicators of the company's strategy to engage consumers in ways that are like social media platforms. Amid the growing interest in social audio apps like Clubhouse, Spotify in March acquired Betty Labs, the creator of sports-focused live audio app Locker Room.
The What's New section also gives Spotify users a way to customize content based on their preferences for specific recording artists and podcasts. The feature helps to round out its other content discovery methods, such as recommendation algorithms that showcase creators based on a user's listening history. The company in June acquired podcast discovery platform Podz to help listeners sort through its millions of shows.
"This is nearly identical to how other social media and other video stream apps operate: by curating content and relevance that the user has shown interest in and making that content easy to find and listen to boosts engagement, time on the app and the frequency of repeat visits," said Leidig at NetBase Quid.
Those repeat visits and prolonged listening times open up more opportunities for marketers to reach consumers, as they do through social media platforms.
"While Spotify's approach does differ from social media because the What's New feed doesn't appear to focus on interactions between users, or from user to creator or vice versa, Spotify and social media platforms do appear to have similar ambitions: keep content-hungry consumers coming back for more," Forrester's Dawson said.