In its second-largest acquisition, Amazon buys the company for $970 million.
The retailer is among the first to launch ads on Spotify’s free radio app.
Free streaming music player Spotify finished rolling out its app to Android users last week, six weeks after making it available on Apple Inc. iOS devices. With the Android debut the company also launched a new advertising feature that drives shoppers to mobile commerce sites. A dozen businesses including Macy’s Inc., Taco Bell and Verizon, signed up to be the first mobile advertisers with Spotify.
The mobile ads mimic the music player’s desktop audio ads. They consist of 15-second spots that play between songs and simultaneously display an ad in the app player that links to an m-commerce site. “What’s really exciting for us is the combination of audio and display advertising on a platform where a lot of listening is happening and where people are naturally inclined to swipe and tap their screen,” says a Spotify spokesman. “It's a pretty cool evolution of a product that is working within the Spotify ecosystem.”
The mobile ads are designed to be intuitive and easy-to-touch with fingers. “What we wanted to do was take what was working well on the desktop and match it to consumer behavior that is more native to mobile,” says Kerry Steib, product marketing manager at Spotify.
For Macy’s, the ads lead to a mobile version of its mstylelab site. Mstylelab is an initiative begun this year to promote Macy’s to millennial consumers—those aged 13 to 30. The Boston Consultancy Group reports that 33% of millenials favor brands with Facebook pages and mobile sites versus 17% of non-millenials.
Macy’s Spotify campaign uses an extension of the creative content generated for the mstylelab Back to School campaign, a company spokeswoman says. “We feel optimistic, given all we know about Spotify's audience growth over the last 12 months,” she says.
When Spotify launched mobile free radio for Apple’s iOS in mid-June, it rapidly reached No. 2 for downloads among iTunes free apps and No. 1 in the iTunes free music list, tripling total Spotify downloads in iTunes, the company says.
Previously, mobile radio had only been available to Spotify’s premium members; those consumers will continue to receive the service without ads.