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Brands plan to sponsor free music streaming with video ads

Brands including Coca-Cola, Universal Pictures, Ford, and McDonald?s are introducing new video advertisements to sponsor free music streaming.

The video ads, designed to push brands and marketers to sponsor free streaming for users, will begin testing later in the year on Spotify. The mobile version of the Spotify application will allow the ads to appear full screen as opposed to appearing in windows on the desktop version.

"It's interesting how Spotify will be selling the ads," said Shawn Aguilar, digital marketing manager atTapSense. "I don't keep Spotify up when I'm listening to it, I keep it in the background. The advertisers will have to assume some responsibility for people not necessarily seeing the ads, and only hearing them."

?Takeover? advertisements
The ?takeover? ads will enable users to listen to half an hour of commercial-free music streaming after watching the sponsored video. Users can also opt to dismiss the video and continue listening to audio ad-sponsored music.

The videos are limited to a 30-second timeframe, so it is possible that Spotify fans will elect to watch the video in exchange for the half hour of uninterrupted streaming. However, since a number of users may employ ad-blocking applications, the effectiveness of the ?takeover? ads will depend on Spotify?s ability to differentiate ads and tailor them to specific audiences.

Spotify has built its brand as an experience based entirely on audio, but is likely looking to social media favorites such as Twitter and Facebook for incorporating visuals into that experience as well. Considering some of the backlash towards Facebook?s autoplay ads and Twitter?s Promoted Videos, this may be a controversial decision (see story here).

Brand participation
Spotify has already lined up a small number of global brands to partake in the first testing round of ads. Confirmed participants include Coca-Cola, Universal Pictures, Ford, and McDonald?s.

Despite some users? frustration with video ads continuously permeating Web sites, the video ad market has been steadily growing. A recent forecast from Borrell Associates predicts mobile and digital advertising will eclipse other formats in the next few years (see story here).

From a marketing perspective, it makes sense for brands to engage in video advertisements. The Interactive Advertising Bureau and Nielsen published a study in 2012 claiming that video ads were twice as enjoyable as online ads for consumers, and twice as likely to be remembered.

The marketers? main challenge is to create unique content that will not spur viewers to dismiss the ads or download ad-blocking apps. This may be the push that digital ads need in order to attain the same level as television ads in terms of dollar growth.

Keeping a variety of ads in rotation will also help Spotify in keeping targeted content fresh.

"Ultimately, video ads are bigger for brands, and are a much more engaging medium than banner ads," said Mr. Aguilar. "It's the way the industry is going."

Final Take
Alex Samuely is an editorial assistant on Mobile Marketer, New York