Spotify is testing a new feature in Australia that will allow free users to skip as many audio and video advertisements as they want. Under current rules, only premium users may skip ads.
In an interview with Adage, Danielle Lee,Spotify’s head of partner solutions, compared it to the company’s “Discover Weekly” feature that creates a tailored playlist based on listening habits and preferences. Spotify believes users will only skip ads that are not of interest to them, allowing the company to better curate ads.
“Our hypothesis is if we can use this to fuel our streaming intelligence, and deliver a more personalized experience and a more engaging audience to our advertisers, it will improve the outcomes that we can deliver for brands,” Lee told Adage.
As previously stated, premium members can already skip video and audio ads, which might be how the company came up with its hypothesis regarding how often listeners will skip ads. At first glance, this move may seem counterintuitive, but another platform has found a way to make it work, namely YouTube.
While there are some unskippable ads on YouTube, there are also many that can be skipped after 5 seconds. According to a Business Insider report, about 59 percent of millennials skip these ads, but this actually works out to the benefit of advertisers for a couple of reasons. While a majority of viewers do skip these ads, those who don’t skip tend to actually be interested in the product being advertised. This gives advertisers more data to work with when it comes to targeting their ads to important demographics.
It was also reported that those users who did not skip ads on YouTube tended to pay more attention to the ads themselves. Google and Ipsos found that ad engagement on YouTube was 84 percent higher for TV ads among people age 18 to 49.
Rather or not Spotify can replicate YouTube’s success when it comes to advertisements remains to be seen. However, the model does have some merit, so it will be interesting to see how things go in the future. That assumes this new system is rolled out beyond Australia.