In an effort to bring in bigger streams of revenue from new sources, Spotify is prepared to launch a series of "branded apps" that feature products and brand names in exchange for advertising dollars. Among the companies already being tapped include AT&T, Intel, McDonald's, and Reebok. The way it would work is users could navigate to, say, the Reebok app if they wanted to get a really good workout playlist.
Spotify has managed to secure a huge collection of users, but it has found difficulty in converting those impressive numbers into money. The company has around three million paid subscribers who are willing to pony up some dough every months for extra features, but the majority of people who stream music from the site do so without paying anything. These branded apps will be a way to create a more engaging user experience and still bring in more money.
As another example, AT&T's app aims to focus on locations of the artists who perform each song. It's unclear exactly what McDonald's role in this will be. "Brands will build these apps, and they'll spend their marketing dollars to promote them on and off Spotify," said Spotify chief marketing solutions officer Jeff Levick. For marketers, getting people to wilfully associate with your brand is the ultimate goal. Facebook is doing it with corporate Pages, Twitter is doing it with the many corporate Twitter accounts, and now Spotify will do it with sponsored apps.
[via Ad Age]