July 21, 2016

Fortune "Spotify Ramps Up Its Audio Ad Business as It Prepares for Its IPO" - Mathew Ingram


Mathew Ingram




On Wednesday, the Swedish company announced that it is opening up its targeted ad network to what is called “programmatic” buying. That’s the term for ads that are bought and sold—and inserted into the audio stream—automatically using algorithms based on a user’s preferences and activity.

Google’s search-related ads are the most common example of programmatic advertising, but the phenomenon has been growing rapidly over the past several years. According to some industry estimates, revenue from programmatic display and video ads will hit $20 billion this year, and Spotify is hoping to tap into some of that growth with a series of programmatic deals.

同社はRubicon、The Trade Desk、AppNexusなどの広告ネットワークと契約を締結しました。リアルタイムに近い状態でオーディオインベントリを提供するためです。すなわち広告バイヤーは、Spotifyユーザーが聴いている時にその視聴行動をターゲットとした広告を出すことができることを意味します。

The ads will be bought and sold via a real-time auction marketplace, which means Spotify will be able to sell much more efficiently. In the past, it sold audio ads through a variety of exchanges at fixed prices, and ads were inserted manually into the company’s streams.

Users probably won’t notice much difference from the new model, but Spotify is hoping to drive more ad revenue. It needs that revenue growth as it prepares to go public as a way of justifying the market value it hopes to achieve. At the moment, the company is valued at approximately $8 billion, and it has raised more than $2.5 billion in venture capital.

As Fortune has noted in the past, Spotify’s biggest problem is that it is still losing hundreds of millions