Spotify ad revenue jumped 53% in Q1

Spotify saw a 53% increase in ad revenue year-over-year in Q1 2015, according to internal data at the streaming platform.

The figures come from the Swedish firm’s Spotify For Brands division, which helps advertisers target specific groups of consumers.

Although Spotify hasn’t confirmed what this increase amounts to in monetary terms, the jump is an interesting new moment in the continued debate surrounding the worth to the music industry of Spotify’s ad-funded ‘freemium’ tier.

In addition, Spotify has confirmed that Q1 2015 also saw a 380% increase in mobile ad revenue compared to the same period in 2014.

We can get a clue as to how these figures compare to Spotify’s overall growth by looking at previously-announced updates: Spotify’s active user base increased from 40m in May 2014 (Q2) to 60m in Jan 2015 (Q1) – a 50% jump. Its ad-funded audience increased by the same percentage in this period – up from 30m to 45m.

In FY2013, Spotify pulled in €68m in advertising revenue – but this represented just 10% of its total income haul, with the vast majority of cash coming from its premium tier.

Today’s news comes as the Swedish company announces new features for brands looking to target audiences with their ads – including what it dubs ‘an industry-first targeting solution’ using playlists to target consumers.

Starting on May 1, brands will be able to target audience segments based on streams from Spotify’s 1.5 billion-plus playlists. This will help them deploy appropriate ads towards consumers looking to workout, chill etc.

In addition, Spotify says that brands can now target audience segments based on who they are (age & gender, geography, language), what they’re listening to (playlist, genre), and when and how they’re listening (time of day and by platform/device).

“Music is an integral part of life, day in and day out,” said Jeff Levick, Chief Revenue Officer, Spotify.

“Our new targeting solutions based on rich behavioural insights combined with our global footprint in 58 markets give brands unprecedented ways to reach streaming consumers.”

Spotify introduced its first video ad products – Video Takeover and Sponsored Sessions – in Autumn 2014, giving brands a new way to reach audiences across mobile and desktop.Music Business Worldwide

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