They actually might fall right after the media and the government as one of the least trusted things in life. But that doesn't mean advertisements are worthless or bad. It just means that a lot of people have been doing it wrong. Spotify is in a prime position to do things right and help advertisers build lovable and useful ads.

What is a lovable ad?

A lovable ad could be the Volkswagen commercial of the little kid dressed like Darth Vader:

These ads are definitely captivating and are remembered long after they aired. But did this ad increase sales? Probably, that year sales doubled and it is still the most viewed ad ever, according to my Wikipedia sources.

But making a bona fide hit ad is tough. Especially in audio. The last infamous audio piece was probably Orson Well's War of the Worlds broadcast in 1956, but these commercials from Motel 6 give Well a run for his money.

Useful & Lovable

The words "ads" and "useful" aren't used in the same sentence that often (just 70.6K results on Google), but that is exactly what a successful ad is. It helps people discover your product/service to help them do a job they need to do.

One of the most useful ads I have encountered was on Waze. It was 7am Dallas time, I had a 9+ hour trip ahead of me. I was tired. I was hungry. When out of nowhere, a beautifully unobtrusive ad popped up on my screen showcasing a delicious egg, bacon, & cheese biscuit, conveniently telling me the gas station where they sold this decadent treat was only a couple miles away. Needless to say I hunted that gas station down and bought the mouthwatering biscuit.

This is a perfect example of a useful ad. Beautiful yes, but mainly useful. This is the potential Spotify has and even more so with audio.

The Power of Multiple Devices and +300 Million listeners

The secret weapon Spotify has is that people use Spotify on multiple devices. I know it's not that secret, but multiple device functionality not only provides a wonderfully seamless experience for listeners, it also creates multiple contexts, and multiple contexts give you more opportunities to be useful at the right time.

One of Radio's limiting factors has always been that it is mainly consumed in cars. Content in cars is a huge market, but that's not the main market. The main market is where you spend the other 22.5 hours of your day.

This is where Spotify's advantage lies. Spotify figured out how to be your most loyal companion in multiple contexts. So how can Spotify enhance a listener's experience with ads? First and foremost Spotify has to understand, as best it can, where listeners are physically and emotionally at any given moment. This is where big data scientists, interacting with 300 million listeners, and collaborative filtering comes in. You can learn a lot from 300 million people.

Ok so what type of ads can help us get there?

Super Useful and Lovable Ads

• Host-Read Ads - premier highly trusted ad type

  • Joe Rogan reading about a delicious new burger joint.

• Hyperlocal Ads - useful ad type

  • Ads about a nearby burger joint.

• Ads based on time - useful ad type

  • Ads about a nearby burger joint at lunch time.

• Ads based on likes - useful ad type

  • Ads about a nearby vegan burger joint at lunch time.

Special Note on Host-Read Ads:

Dominating Host-Read Ads should be a big goal at Spotify. It could be a large contributor to gaining market share in the $1 billion dollar podcast advertising market. Nearly 30% of people listening to podcasts purchase a product that was advertised during their favorite podcast. Host-Read Ads are a main reason that conversion rate is so high.

People might not trust ads, but they trust their podcast hosts.

Takeaway

Spotify should become the winner of the audio advertising space and the best way to do this is to offer the best all-in-one podcast solution for creators. Merging the Spotify Creator Studio with a monetization platform to create an end-to-end solution that enables creators to publish, manage and generate revenue in Spotify could be the golden ticket they've been looking for.