Spotify started to introduce a couple of its new ad formats in December last year. These formats use video which come in addition to the existing audio and display ad formats of the company.
Spotify will begin testing the video ads in the fourth quarter of the year. While a limited number of brands will be featured initially, the company plans to extend the service to all advertisers at least in the first quarter of next year.
The ads will be made up of two separate entities. One is called "Video Takeover" which will allow brands to own the PC-bound ad breaks. They come in either 15 or 30 second ad time slots.
The other is called "Sponsored Sessions" which caters to mobile users. The ad will have an optional viewing invitation to the listener. When a listener agrees, he will receive 30 minutes of music that is absolutely ad-free. In essence, ad companies will pay just to get the listener's attention and will give a reward by providing uninterrupted music.
"We think about video as one of the most dynamic forms of content that advertisers have and that bring great relevance to Spotify," said Jeff Levick, Spotify's chief business officer. "Brands have clearly stated it's of interest."
Spotify tried out various lengths for its "Sponsored Sessions." These include 15 minutes, 30 minutes and one hour. Levick adds that the 30 minute notch has the highest opt-in rate.
The "Sponsored Sessions" seemed more applicable to mobile users. The name is based on the fact that users of Spotify's apps including those within the iOS platform get an option to view a 15 or 30 second video ad. In return, they will get a 30 minute music streaming session that is free from any ads.
Eventually, the "Sponsored Sessions" may just be included in Spotify's desktop service. The company has a good reason why it initially started on mobile.
"Mobile is the fastest growing traffic for Spotify," said Levick. "It's where we're putting the majority of our efforts into innovating."
Spotify claims that its free service which is ad-supported now has over 30 million users. However, Levick declined to say how the number is broken down between desktop and mobile. The latter, which became an ad-supported service in December last year, had obviously grown quickly.
Spotify is still considering on creating future money making opportunities from the PC. In fact, the company has an upcoming lineup of desktop video ads which they dub as "Video Takeover" ads. It will work similar to the regular ads on the service.
