Mid-funnel intent is the USP of Audio OTT advertising: Arjun Kolady, Spotify

In a brief chat with Social Samosa, Arjun Kolady of Spotify, talks about use case examples of audio advertising, sharing how Audio OTT reaches consumers in their screen-less moments.

Social Samosa caught up with Arjun Kolady, Head of Sales - Spotify India in the backdrop of Goafest 2022. He highlighted how brands have been using the Audio OTT.

Edited excerpts:

What was the idea behind the Goafest Spotify activation?

Our goal was to highlight the impact that audio has on the listener’s imagination, and how they engage with music, for instance. For a long time, advertising has been so visual and we wanted to make the point that an audio-first approach works at many levels.

From an evolutionary point of view, audio is one of the first senses to develop, even for a foetus. You can close your eyes or look away from something, but your ears are always on. From an engagement point of view, a particular kind of sound has always surrounded us, whether it's conversations, storytelling, or even radio.

On average, consumers in India spend nearly 2.5 hours a day listening to audio. That’s higher than all the other mediums combined.

This means consumer interest and engagement for a brand to reach out to them, are already present. For the longest time, audio has always been associated with radio. But today, audio is witnessing the same transformation as television did, wherein different technologies, formats, and personalisation tools make the experience unique for every listener.

What are some of the USPs that accentuate the relevance and need for audio advertising?

There are a few aspects that play a role. Context and moment marketing are the primary ones. Say, you are a running athleisure brand for women and you're doing your typical digital marketing, where you use a 20-something woman who likes running, and uses a smartphone, right? But for Spotify, it's different, because based on the listening habits, we know when our listeners are stepping out for a run, based on the playlists they stream. Now, the moment you're able to understand that context as the brand, you can present your communication in other interesting ways in that moment and throughout the day.

The other one is ubiquity or portability.

Today, a majority of the advertising money is spent on a visual medium, but on the contrary, most of the time spent is screen-free.

Whether you're driving, cooking, at a party, chilling at the beach, or cleaning the house, many of these moments are when you don't engage with the screen. All these moments open up, which are not accessible if all your marketing is completely dependent on screens.

One of the challenges marketers face with evolving and new age mediums is scale, how does Spotify address that challenge?

I would say scale is secondary. When I used to work at Google in 2010, Orkut was MTV youth icon of the year and thereafter, Facebook was this new social media platform that was seen as being premium. If you look at advertisers who would have initially gone to Facebook, they wouldn't have gone to Facebook, because scale was already solved for them.

Now, we are in a similar stage where we sure have meaningful scale when it comes to specific audiences. Right now the target audience is Gen Z, urban high-income groups, those who have the ability to pay for higher car ownership, and high credit card penetration. Right now, we are offering that scale in the premium segment. But as we continue to grow, we will eventually scale across segments.

Also Read: Influencer Marketing for us is like earned media, it has to be genuine: Vineeta Singh

Every medium has a sweet spot in the marketing funnel, according to you which part of the funnel does audio fit perfectly into?

The role of audio is awareness and recall. We talk to brands about real-time moment marketing and how they can design their campaigns based on meaningful audience related insights and can reach them during times that you otherwise can't. We have done several Brand Lift studies across all of the campaigns, and we know for a fact that almost nothing drives awareness, recall or engagement the way audio does, even when benchmarked against TV, social media, or any of the short-form videos.

If you look at Gen Z, they are a difficult audience to reach, given how their media behaviour and consumption patterns are evolving over time. For non-audio mediums, brands always have to think about time. If I could give you two and a half hours of a consumer’s time in a day, and that time is distributed from the time they wake up to the time they go to bed across multiple different things, where and how are you going to use that opportunity in interesting ways to create that flow of awareness. I think that's where we get a lot of questions on how to prepare for performance.

Incremental Gen Z reach, awareness & recall, I would say mid-funnel intent is the USP of Audio OTT. After that, it's just great immersive storytelling and modern marketing.

Can you share cases/examples that highlight the use case for audio? Which industry is leveraging audio to the best of its potential and which industries are likely to gain more with audio?

Let's start with just base audio. Snickers has the communication line of ‘you are not you when you are hungry’ and we have the ability to do genre targeting where a brand can target people when they are listening to Rock, Pop, K-Pop, etc. They recorded ads for four or five different genres of music, where the first 10-15 seconds of the ad song sounded like a song itself. If it's a rock version, it'll sound like a rock song, if it's K-Pop that version of the ad will play. But the fun part is they did opposite targeting. They picked somebody who was listening to pop music, and played the heavy metal ad, or somebody who was listening to K-Pop and played a Sufi ad, and so on. After 10 seconds, suddenly, the music will change and the ad said that your playlist is hungry and that's why it is not behaving the way it should, highlighting the Snickers ideology.

Another one was with Netflix, wherein we used 3D audio, a technique of recording audio in a theatrical sound. Because 80-85% of listening is happening on your headphones, you can actually create an immersive experience as if you are sitting in a theatre with your eyes closed.

From a tech point of view, we did a campaign with Mondelez for three years in a row, including a recent campaign on Valentine’s Day, for their brand Silk. The first part of the campaign was how far will you go for love. We created an experience, which was around the concept of making mixtapes for a special someone when we were in school. We added a fun twist to it, which is you could select a few songs for your loved ones, and based on that we would personalise a playlist that they really liked. You could also hide a secret message in the playlists. For example, if your message was ‘I love you’, then in the playlist, the first song would start with I and the second song would start with L, so on and so forth. Approximately 40,000 hours of music was streamed as a result of that campaign.

This year, we took it a step further and allowed people to hide a small voice note inside a playlist. So you can actually send the playlist to someone on Valentine's Day saying, ‘Hey mate, it's for you’ and when they are listening to the music in between maybe there is a voice note from you that actually features within the playlist.

Which industry is leveraging audio to the best of its potential and which Industries are likely to gain more with audio?

Netflix, Hotstar, Amazon Prime Video, and all of the OTT players use Spotify. That's the most adjacent ad category in some way for us, right, because they're also streaming services. Most of the entertainment business has enough sound to play with. I think the second is tech - Google, Facebook, Apple, Samsung. Third is FMCG but mostly the ones focused on Gen Z and millennials. The last one is Auto.

Can you share some Indian audio consumption insights?

When we decided to launch in India, the Spotify that we launched here was completely different from anywhere else. For instance, we launched free on demand, an enhanced search for our listeners here, and focused on film music, a culture that is so unique to India. Later on, we also launched other features, and even a standalone Spotify Lite for lower specification devices. Some of the trends we have seen since are:

• In the early days, a majority of our consumption was international music. Now, one of the strongest trends that we have seen is the balance in consumption between global and local music.
• If you look at languages, outside of English and Hindi, Tamil, Telugu, Kannada, Punjabi, all are a significant part of overall consumption.
• The listenership across devices is something worth highlighting; an average Spotify user uses four to five devices. It's not just a tablet, or a phone, there’s also Alexa and other connected devices. Especially with the pandemic, this was a trend that accelerated.
• Playlist creations are booming. Spotify users in India create 150,000 playlists a day. With Gen Z, we like to say that for them in many ways, curation is creation.
• Podcasts are picking pace, and across popular local languages, primarily Hindi, Tamil, Bengali, and Telugu. Today 1 in 4 Spotify users in India consumes podcasts.

When everything is growing, it's difficult to call out a specific trend. We are focused on being integrated with local culture, and through the consumption on our platform, growth of creators in India and them finding audiences in our global markets, contributes to that.