@amyxwang: Spotify: You can listen to all the music for free—but [your fans are] the real product

[Editor Charlie sez:  This Spotify data is what Chris calls “nondisplay uses” that create huge value for Spotify and YouTube but for which we get zero compensation.]

At the Advertising Week Europe conference yesterday, the company’s VP of “global partner solutions,” Danielle Lee, spoke to a number of brands about the emerging marketing opportunities coming out of audio data. “On social, you curate your social-media feed to create a picture of yourself, but music is about participating in your most vulnerable moments,” Lee said. She revealed just how closely Spotify tracks its users:

  • In general, the service studies each consumer’s listening habits for a broader understanding of his or her mood, tastes, values, and mindset.
  • Spotify’s playlists act as consumer segmentation. Advertisers aren’t just able to target exercise playlists, for example—they can also now track when a user stops exercising and play ads specifically geared toward a dormant fitness enthusiast.
  • Spotify has developed a “real-time moments” advertising tool that lets brands connect with listeners depending on what they’re most likely doing at that moment, such as partying, having dinner, or working out.

While it’s quite the norm for digital music services to keep tabs on their users’ listening habits, Spotify differs from its competitors Apple Music, Amazon Music, and Tidal in that it isn’t a subscription-only service: most of its users are actually listening to music on its free, advertising-supported tier. That means Spotify has a financial incentive to pry more deeply into users’ listening habits and sell ads aligned with their specific lifestyles. Last year, Spotify announced a first-of-its-kind partnership with ad-tech companies to deliver automated advertising based on user background; from Lee’s comments, the company seems dedicated to diving even deeper.

Read the post on Quartz