Spotify’s doubling down on its ad platform

Welcome to the last day of the work week (hopefully). Whether you plan on spending the weekend streaming, shopping, or both, there’s an app for that—honestly, there are probably too many apps for that. Let’s talk about the ones making waves.

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Spotify sets sights on becoming a meaningful advertising channel

Spotify is scrambling to reach profitability. Despite hitting 205 million paid subscribers in Q4 of 2022, Spotify’s operating expenses rose to 44%—charging subscription fees just isn’t enough to cover the costs of paying for music rights. But what if there was an audio format that didn’t involve music rights? 👀

But Spotify’s podcast deals haven’t paid off—even though brands are still spending money on podcast ads. They tried to gobble up the podcast market share by buying shows and producing originals but the scale isn’t there. Now, Spotify wants to shift its focus and according to Bloomberg, “build advertising technology that resembles Google’s AdSense or AdWords for audio” and be viewed by podcasters/creators as the go-to way to monetize audio.

Right now, podcasters broker their own ad deals and Spotify sees none of that revenue. Although building ad tech akin to Google’s is a good long-term strategy, Spotify can begin to position itself as the “Youtube of Audio” to start seeing revenue now.

Instacart is making moves in the ad space

Creating a seamless experience from television ad to delivery at your door is a gamechanger—literally and figuratively. Instacart has partnered with Anheuser-Busch to offer shoppable TV. During a commercial from the brand, a QR code will appear and consumers can use it to go directly to Instacart’s Michelob ULTRA page, cutting out the need to search up the product. PepsiCo is getting in on this by offering snacks that pair well with Michelob, like Tostitos and classic Frito Lay chips.

Instacart has been consistently moving into the ad space since 2019 and has even shown to drive incremental sales. Adding popup deals and promotional offers sweetens the deal of advertisers and nabs those impulse shoppers—even when they’re not IRL. Instacart incorporating co-advertising partnerships with companies is a deft move that should bode well for both pieces of the puzzle—the brand’s product and the app’s user acquisition.

Instacart is becoming a key channel for consumer packaged goods (CPG) marketing. Instead of relying on in-store endcaps, these brands can now reach people in their homes—while they are actively making purchases. Digital deals and instream ads are the new competitive edge.

Optimizing Media and Creative for More Effective Ads

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Around the Web

• Brands battle skepticism by promoting Black inclusivity beyond Black History Month.

• YouTube Shorts is lowering the eligibility threshold to earn from its Partner Program.

• Instagram’s co-founders have a new social app—for reading the news.

• And Spotify is trying to get social, too.

• Oh, right—Snapchat still exists.

Just Can’t Get Enough

Equity. And not just the financial kind. But also, the financial kind—everyone deserves equal treatment and opportunities, making the reality even more harrowing:

• The IRS is 3x more likely to audit Black taxpayers.

• The median wealth of Black households vs. white: $24,100 vs. 188,200.

• Pay transparency laws could help.

Will you be ordering from Instacart via QR codes come game time? Do you think Spotify has a fighting chance to be the go-to podcast platform? Reply and let us know, or just tell us your favorite podcast—we’re not picky.

Thanks for joining us, and we’ll see you Monday!