Who Needs Premium Anyway?
According to AdAge, Spotify is currently running a test in Australia that allows even Non-Premium users to skip audio and video ads “as often as they want”, with no restrictions whatsoever.
Currently, users who do not pay for premium cannot skip ads at all.
Spotify hoes the addition of this feature will deal another blow to its rival, Pandora, and move them even closer to total dominance in the multi-billion-dollar market of audio advertisements.
But Spotify’s Head of Partner Solutions, Danielle Lee, says this change will also benefit advertisers and Spotify in addition to being a big boon for consumers.
She compares the feature to Spotify’s discover playlists, which use comparative algorithms to formulate a playlist of music you’ve never heard before but will probably like, depending on what you’ve been listening to and comparing that with other people who listen to the same kind of music – but also listen to this other song – a song that Spotify’s records show you having never heard of before, so they put it in your discover playlist.
She says that the discover playlist adapts to what songs a user skips while going through it. For every song a user listens to and every song a user skips, Spotify gets better and better at finding more music that this person will enjoy.
She hopes the “skipping ads” feature will work in a similar way. In theory, users will only skip ads if those ads have no relevance to them or their interests, and will let ads play that they are interested in or that appeal to them.
This way, users will only hear the ads that they’re likely to follow through with. It’s a win-win for both company and consumer – Consumers spend less time listening to ads overall, and companies have a higher chance that their ads will reach people who care about them, since there’s less other ads standing in the way.
“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. 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.”
In addition, as per Spotify’s new “Active Media” plan, companies will no longer have to pay for ads that users skip, so statistically, companies will be getting much more bang for their buck.
This also means that Spotify is willingly betting that users will consent to listening to enough ads to allow Spotify to make decent profits along the new system. And while this system is still in early testing, that sounds like a tough bet to make.
Most users don’t like ads. If the skip button is always available all the time, users may opt to skip instantly as soon as they hear an ad start playing. Under this system, it wouldn’t matter if the add mattered to the user or not – it would be skipped before it gets to say much of anything important.
If Spotify is actually looking to get anywhere based on this kind of system, they might instead consider giving free users a limited supply of skips that recharge over time. This way, users would be forced to pick and choose which ads they enjoy least rather than skipping everything they came in contact with.
And while we’re on the topic of eliminating ads that don’t matter to a user, some way of auto-skipping ads from a company that the user already does business with might also be a direction for Spotify to look into. After all, there’s no need to play an ad for wireless headphones to someone currently listening to the ad – using the same headphones being advertised.
Just a thought.