Ad Buyers Warm To Spotify As It Hits Million-User Mark

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imageIts growth shows no signs of slowing and its commercial strategy is stepping up a gear too: Swedish/English music streaming service Spotify, which has so far aired mostly public service announcements on its ad-supported offering, has now signed up some of the big ad agencies to use its new ad targeting capabilities. According to NMA, MEC, Starcom, Universal McCann and Zed Media signed up for the service, which offers geographical and demographic targeting. Existing advertisers had included HRMC, the DEC, Sony (NYSE: SNE) Pictures and HMV (LSE: HMV). That news comes as the company today announces it has reached one million users worldwide.

Spotify has so-far ruled out upping the frequency of the ads — users currently get one every 20 minutes. But the aggressive commercial strategy from such a young start-up is refreshing: while social networks concentrate on building audience and improving the user experience, Spotify launched with a good service and is setting about making money right away. And to keep up with commericial demand, the company will recruit two new sales staff this year for its central London HQ.

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Robert Andrews

Spotify had *better* make a success of the ad-supported offering. The jump to paying £9.99 a month just to remove the scant one ad every 20 minutes may be too great to make the premium model a success in lieu of some sideloading capability. But we'll see…

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