Streaming music has emerged as a significant market force. As noted by Statista, Pandora now boasts around 78 million listeners while Spotify grabs about 100 million. While Pandora has around 4 million paid subscribers, Spotify has 10 times that many. Given this market, more and more brands are starting to consider developing a music strategy. But how do small to midsize businesses (SMBs) fit into the equation? Is advertising on music streaming platforms in line with SMB aims?
The Ad Advantage
Both Spotify and Pandora offer subscription-free services that are supported by ads. But the problem is that this ad-supported model has not been generating as much revenue as the subscription model. As a result, music services are changing the way they work with brands. As Adweek reports, Spotify now lets brands leverage "Sponsored Playlists," which attempt to match consumer offerings with relevant streaming choices. For example, fitness companies might want to sponsor popular playlists meant for running or working out, while car makers could tap into driving music channels. Spotify's official blog describes the venture as "content plus context; the right message in the right moment."
Pandora, meanwhile, is changing up its ad-supported model by allowing brands to insert video ads. If users choose to watch the ads, they're able to skip or replay certain songs.
So what does all of this mean for business owners who are looking to tap into the streaming market? What does advertising on music streaming platforms look like for a small business? Well, it all starts with strategy. According to Adweek, while "terrestrial" radio plays huge amounts of pop and country music, streaming platforms skew much more niche. Consider this: In July 2016, 60 percent of the top artists on Pandora were hip-hop artists rather than pop stars or country crooners. And that's just one example. Streaming platforms have channels for every genre and taste, which makes it possible for you to target specific audience segments.
For SMBs, the easiest way into the streaming ad market is to create sponsored playlists that align with brand objectives. When creating a playlist, you should try to include 20 or more tracks and refrain from repeating any artists. Furthermore, you should try to make music choices that will help listeners understand the story of your brand.
Once you complete your playlist, you can embed it in your blog and share it on Facebook or Twitter. If you start to gain followers, you may want to create a contest in which contestants pick the songs for your next playlist. For example, if your company makes high-quality men's shaving products, you could create a sponsored playlist, do some PR and then ask followers to submit their favorite shaving tunes. By following this process, you can increase your name recognition and build a network of followers organically.
Streaming music platforms appear to be a new frontier for SMB advertising. By striving to understand this new market and leveraging your consumers' need to listen, you can find the rhythm that works best for your brand.