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Riding the wave of premiumization in India, Spotify expects ad revenue growth of over 30% during the upcoming festive season. According to Comscore report, Spotify India had around 55 million monthly active users (MAUs) in 2023, reaching 80 million MAUs in 2024. The audio platform is seeing an increase in advertisements for premium product categories.

Recently, Spotify launched ‘Creative Lab,’ an in-house creative agency, to help brands reach its audience more effectively. This service is available in 11 markets, including India, the US, Brazil, Mexico, Japan, Singapore, Australia, the UK, Germany, France, and Italy. Additionally, Spotify introduced its ‘Creative Lab’ team in India, providing local and nuanced insights to help brands and agencies create campaigns through workshops, inspiration sessions, and collaborative ideation.

<strong>Growth during Festive Season</strong>

Spotify reported Q2 2024 revenue of €3.81 billion, up 20%, and a net profit of €274 million. Spotify’s ad-supported revenue in Q2 grew 13%, reflecting double-digit growth across all regions.

Discussing the rising ad revenue for the audio streaming platform, Arjun Kolady, Head of Sales at Spotify India, said, “Last year has been fantastic. We are experiencing significant sequential growth, both quarter-over-quarter and year-over-year, across various categories. We have notably expanded our advertiser base, nearly doubling the number of partners we had last years."

Kolady added, “We are seeing strong momentum on the user side and high demand from brands. We are actively focusing on festive sale campaigns starting from Independence Day through October and November, and we anticipate a surge in advertisements on the platform.”

Commenting on the growth in advertisements during the festive season, Kolady said, “We expect more than 30% growth in revenue from ad sales compared to last festive season, exceeding market expectations by a significant margin. We anticipate strong, world-beating growth.”

Kolady further explained, “For the festive season, we are witnessing a lot of interest and demand from e-commerce, retail, tech, and consumer packaged goods (CPG) sectors. These three categories are driving most of the large-scale conversations.”

<strong>Sectors Driving Ad Revenue</strong>

According to official data, Spotify has 602 million monthly active users globally as of Q4 2023. As of the end of Q2 2024, the company had 626 million total monthly active users, it reported 246 million Premium subscribers, adding 7 million premium subscribers. 

Kolady highlighted that Spotify India is organized by verticals and has significantly invested in its team, growing it nearly tenfold over the past year. “We did this to deepen our engagement with the most strategic advertisers and partners in the country,” he said.

He elaborated, “Our primary verticals contributing most to ad revenue includes media & entertainment, FMCG, technology, e-commerce and online services, automobile, and finance. We are experiencing strong growth across all these sectors.”

When asked if the platform faced a dip in advertisements due to brands cutting down on ad spends, Kolady responded, “We haven't encountered that issue much, for two reasons. First, as a premium urban platform, our focus has always been on brands targeting an urban audience with purchasing power. The rural slowdown didn't impact us.”

<strong>Increase in Ad Spends by Premium Brands</strong>

Explaining why advertisers choose Spotify for their premium products, Kolady noted, “Advertisers are focused on premiumization, aiming to move consumers up the value chain by increasing average selling prices and basket sizes. They understand that to achieve this, they must target audiences with the right purchase behavior and consumption patterns. Spotify fits well into this premiumization journey across all categories we work with.”

“For instance, if an FMCG conglomerate wants to advertise low-priced or non-premium products, Spotify may not be the best platform. We typically operate at the higher end of brand products in all the categories we engage with,” he concluded.

<strong>Agency business</strong>

Spotify India is working with top holding media agencies in India contributing significant chunk of revenue to the ad business, Kolady said, “Agencies are our most important and most strategic partners in the business. We have noticed that business has really accelerated due to our partnership with four or five holding companies and a lot of the new age independent agencies in the last one year. We are seeing faster adoption there.” 

“We continue to invest in working with them to give our common clients a more diversified and meaningful and impactful set of solutions.” 

Ad revenue to surge by more than 30 percent during festive season: Spotify

As India gears up for the 2024 general election, Spotify is collaborating with the Election Commission of India through a non-partisan campaign, ‘Play Your Part’. The initiative encourages eligible voters, especially the youth, to play their part by going out to vote.

“Partnership and collaboration are essential pillars of our voter awareness program at the Election Commission of India. I strongly believe that fostering informed and ethical electoral participation is a shared responsibility among all stakeholders in our democracy. It's really good to see Spotify, which holds significant influence among the youth, utilizing innovative music programming to create engaging voter awareness campaigns for the broader electorate”, said Santosh Ajmera, IIS Director, SVEEP Election Commission of India.

‘Play Your Part’ emphasizes that the power of the collective is realized when everyone comes together and plays their part by voting. This message has been communicated through a visual of the voters' marked finger, a unique feature of Indian elections, integrated with Spotify's scan code. Through in-app messaging, and by leveraging artist fandom that is unique to music and Spotify, the campaign intends to reach millions of listeners on the platform.

Through a specially curated on-platform hub featuring playlists to soundtrack the voting process, Spotify hopes to inspire eligible youth in India to cast their vote in the upcoming general elections.

●	Our Voter’s Hub: The ‘Play Your Part’ hub gives listeners a number of destinations to choose from.
○	Soundtrack Your Vote: As citizens head to the polls, two playlists will accompany them. The first, called Play Your Part India, features the best of motivational songs across languages to encourage the youth to go and vote; the second, called Thank You For Voting, includes a mix of patriotic and fun dance tracks to celebrate with them after they play their part. 
○	Playlists Providing Inspiration: In the hub, listeners will also find playlists to celebrate the election season.
●	On-Platform Voter Messaging: Listeners will be encouraged to exercise their right and cast their votes through on-platform communication, leading them to the Election Commission of India website to find polling locations applicable to them, and more.

Spotify will also tap into other off-platform mediums, including out of home and print media, to reach a wider audience for this initiative.



Spotify encourages eligible Indian citizens to vote in 2024 general election via 'Play Your Part'

Get a sharp and fast insight into the minds of marketers behind some of India’s buzziest brands in Marketing Recoded. In this episode, Neha Ahuja, head of marketing, Spotify India, talks about the importance of behavioural skills, innovation, and gut feelings, in marketing. Listen in.

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Marketing Recoded Ft. Spotify India’s Neha Ahuja

SPOTIFY INDIA