Streaming provider Spotify plans to add hundreds of employees to improve its advertising sales in Europe and worldwide, as the company seeks to generate revenue from customers who do not pay a monthly subscription but account for the majority of Spotify's user base.
Spotify's head of advertising, Lee Brown, said they are are boosting their ad business marketing personnel by more than 70% across Europe, Australia and Canada... "and that's off a fairly sizable base.
"To grow our advertising business, we're making a significant investment. The days when advertising accounted for less than 10% of our overall sales, are long gone."
Brown said Spotify has also hired a 25-year international ad business veteran to oversee international sales. However, Brown did not name the new hire.
After being decimated by the pandemic last year, the company's advertising business is growing again this year thanks to the distribution of adverts to non-paying consumers.
Of its 365 million active users per month, 210 million are ad-supported, which is responsible for around 12% of the streaming company's total sales.
Advertisements not only bring in money for the company, but they also reduce expenses by causing fewer songs to be played, which results in reduced royalties being paid, Morningstar analysts said.
As of the second quarter, Spotify carried nearly 3 million podcasts, an increase of almost 12%, helping to boost ad revenue because podcasts attract more users and, because they are longer, allow more space for ads.
Megaphone, the company's podcast advertising and publishing platform, will soon be accessible in Germany, France, Spain, and Italy, as well as other European countries.
Megaphone, which Spotify acquired last year, provides podcasters with tools for creating and measuring adverts for their own programs, from which they earn money. About a third of the top 200 shows on Spotify and Apple are hosted by the platform.
Spotify has poured hundreds of millions of dollars on expanding its podcast offering. Following the advent of paid subscription platforms for podcasters earlier this year, the rivalry between Google and Apple has gotten more intense.
Meanwhile, Facebook-owned WhatsApp has partnered with Spotify in the United Kingdom and Germany to launch a multi-media marketing campaign to promote the company's new privacy-protecting feature, "View Once."
"View Once" allows WhatsApp users to send a photo or video that can only be viewed once by the recipient.