- Streaming music service Spotify and technology giant Oracle partnered to help carmakers target consumers at different stages of the car-buying process. The partnership combines Oracle Data Cloud solutions with Spotify's first-party audience data to find and target potential buyers, according to an announcement shared with Mobile Marketer.
- Ford is running ads targeted with Oracle-powered data from IHS Markit's Polk Predictive Automotive Audiences, which maps more than 1,600 audience groups among 120 million U.S. households. The data shows that Spotify users bought new vehicles at a 26% higher rate than the national average last year.
- The data also show what kinds of vehicles Spotify users are most likely to buy. Listeners bought entry, economy and compact cars at a 38% higher clip than the national average and luxury SUVs at a 24% higher rate.
The automotive industry is reliably one of the biggest buyers of advertising, and Spotify aims to grab a greater share of that spending by partnering with Oracle on improved ad targeting through data. Carmakers are forecast to spend about 24% of their ad budgets on digital media by next year, even as their overall ad spending slows, according to media agency Zenith. The early data indicate that Spotify users, who are more likely to be tech-savvy younger adults in the prime age group to buy a new car, make a desirable target market for the automotive industry.
While Spotify's own promotional activity aims to attract paid subscribers, the company also has a massive audience for its free, ad-supported service. Its ad-supported revenue was about $200 million in its latest quarter, while subscription revenue totaled $1.5 billion. Spotify had 207 million monthly active users as of its latest earnings report, including 96 million premium subscribers and 116 million ad-supported users. To avoid losing money by streaming free content to those listeners, the company could consider building up its ad sales by demonstrating its ability to deliver relevant messaging to highly targeted audiences.
Spotify, faced with growing competition from Apple and Amazon, also has tried to boost the value proposition of its subscription by running a promotion with video streaming service Hulu. Apple Music this year surpassed Spotify in paid U.S. subscriptions, although Spotify is still the global leader in streaming audio. Apple Music had more than 28 million paid subscribers as of February, compared to Spotify's 26 million in the U.S., per a report from earlier this month.