Spotify is exploring new ways to let users on its free tier skip audio and video ads whenever they want.
The feature gives listeners the chance to get back to their music more quickly by skipping ads they’re not interested in. The company is currently user-testing the feature in Australia, with plans to later roll it out elsewhere.
For a company which relies on ads for much of its funding, you would think that letting users skip advertisements would be a bad move. However, Spotify believes it could turn out to be just the opposite — since it would mean that users reveal more about their personal preferences by only watching the ads they are interested in.
“Our hypothesis is if we can use this to fuel our streaming intelligence, and deliver a more personalized experience and a more engaging audience to our advertisers, it will improve the outcomes that we can deliver for brands,” Danielle Lee, global head of partner solutions at Spotify, said. “Just as we create these personalized experiences like Discover Weekly, and the magic that brings to our consumers, we want to inject that concept into the advertising experience.”
The new feature, called “Active Media,” means that advertisers will only pay for the ads that are watched. This is reminiscent of Google’s AdWords tech, which only charges customers when an ad is clicked on. The feature began being tested last month.
Spotify’s current subscriber base
Last month, Spotify reported that it has 180 million monthly active users, representing an increase of 30 percent year-over-year. It also boasts 83 million worldwide paying customers, an increase of 40 percent year-over-year.
While it’s still not making any profit, its growth does at least bode well for the future — even if rival Apple is in the fortunate position to not have to worry about making Apple Music a profitable business on its own.
Source: Ad Age