Marketing is no longer about the stuff that you make, but about the stories you tell. SPOTIFY tells its success story through music. After looking at the unique marketing strategy used by Spotify we can only say that ‘HUNGAMA HO GAYA’.
So let’s see how Spotify created this hype as well as its own identity.
Introduction
Music is something that everyone loves, and jamming over music is the favorite hobby for most people. They say, “Music can lift any mood,” as there is music for every mood. But to play them, you need a music streaming platform where you can find millions of songs.
Spotify is the world’s best music streaming platform, with hoards of songs that suit your every mood. The idea to launch Spotify was to deal with music piracy. Before music streaming platforms were not popular, people used to download pirated music files which was a problem for the music industry. So, Daniel and Martin converted this problem into an opportunity because they realized that music streaming has a huge potential and founded Spotify in 2006. The core of Spotify’s business lies in audio and music streaming. Spotify is made by the two words ‘Spot’ and ‘Identify.‘ Daniel and Martin just came up with random names for their streaming platform, and 'Spotify' was misheard word by Daniel which ended up becoming its final name.
Spotify’s journey has not been so smooth, and despite facing backlash from Taylor Swift, who is a global icon in the music industry, and involved in a data leak controversy, the platform is leading.
Spotify is ruling the music industry with over 345 million users and 155 million subscribers. Among the music apps like Apple Music, Amazon Music, YouTube Music, Soundcloud and other music streaming platforms, Spotify has the highest market share of 32-34%.
So, how does Spotify create such a huge user base?
Well, let us sink into the sound performance of Spotify to know its success secret.
Marketing Mix of Spotify
1) Product :
Spotify's core product is free or paid service to stream or download music available through a subscription but how did it all begin?
Firstly, Spotify started off a music streaming service but has since added podcasts, it saw the potential of digital value in the music industry instead of people buying CD's from stores they instead get access to the music online.
Eventually, the streaming service offered users the access to their full library and this made Spotify a market leader as it was one of the first companies to offer unlimited music rather than pay per song gaining them majority of market.
The brand always had a competitive edge over other companies as they were the market leader and their name is associated in consumers' minds with music streaming services .
Spotify uses two core concepts within their products:
1. INDIVIDUALIZATION
It offers a weekly playlist for subscribers where they make a playlist based on the individual person's music taste.
2.PERSONALIZATION
Personalization can lead to greater customer satisfaction as well as higher profits due to higher customer expenditure and therefore gives Spotify a competitive edge.
The brand also use the concept of mass customization within their playlist either made by other users or the service itself but this allows subscribers with similar interest to have accessed to playlist that they may like.
2) Price :
The brand offers different options for price :
1) They have a free subscription where the user can listen to songs for free but with ads between songs .
2) They ask their users to pay a monthly fee that allows them to use the service ad free as well as access to additional features such as downloading, and skipping unlimited songs.
Spotify uses a freemium pricing strategy which entails offering customers free sample. However there is no limit to the free sample unlike others who use this strategy users can continue the free service for as long as they want.
The brand uses this strategy to overpower the market as it knows users are not willing to pay high prices, instead they use this strategy to attract users to then purchase a monthly subscription to gain access to more features. This strategy can also encourage people who would not normally purchase streaming service subscription to do so.
Spotify also offers different prices for different segments such as families, and students allowing it to compete with other music providers by tailoring their service for these segments. The different prices are designed to compete with competitors such as Apple music who also have student prices. Unlike other music services Spotify has a single price and you get access to their whole library rather than pay per song/album giving it a competitive edge over competitors.
3) Place :
Spotify is available to consumer 24/7 and is on almost all technological devices such as laptops, tablets, and smartphones, it is mainly accessed by the internet however an offline option is available for paid subscribers.
Spotify uses a seller - controlled distribution strategy. This involves a single site from the supplier company which allows them to sell their product/service.
Spotify decided to cut out the middle man of buying music(the retailers selling CD's) and instead distribute them directly to costumers, this allows them to cut down on costs and therefore can give products at a lower price than competitors giving them a competitive edge.
4) Promotion :
While the brand offers a product for everyone it's promotional efforts are aimed at certain segments in their target market.
Spotify has very limited promotional activities and instead of spending large amounts of money on big campaigns it mainly relies on:
Word of mouth
Co-marketing
Their overall promotional aim is to increase awareness.
Spotify uses social media as one of their main forms of promotion.
It has a partnership with Facebook that allows users to show what songs they are playing as well as connect with friends on Facebook through Spotify.
Spotify also started using Twitter for a similar promotional activity as well as keeping users up to date with new features and music on Spotify.
The brand also relies on celebrity endorsements for promotion.
When a new celebrity releases an album then it is very likely that they will also release it on Spotify.
When the celebrity or big music labels such as Universal or Warner Bros promotes a new album as available on Spotify it also promotes the service to the artist fan base.
Spotify is mainly aimed at the mass population which makes their promotional activities easier and cheaper as they can produce one campaign that is likely to attract many people's attention rather than making multiple campaigns aimed at specific target markets.
Spotify also uses sponsorship of events such as music festivals to promote their service which allows attendees of the event to associate Spotify with music and then be in their mind when deciding what music streaming service to use. This has allowed Spotify to compete in the market as it not only targets a specific market but allows non-users to be exposed to their service.
Marketing Strategy of Spotify:
1) Social media marketing :
If you are a music lover then Spotify's social media handles are a great place to visit. Spotify has various social media handles based on different geographical locations. The brand focuses on consistent branding over all of its pages.
The music streaming platform posts about various artists, new album updates of the music industry. The brand collaborates with famous social media influencers and runs sponsored ads where influencers promote the brand in their unique style.
The platform also runs various hashtag campaigns and social media trends to create awareness for its brand.
At the end of 2017, the brand started a global hashtag campaign called #2018Goals. In this campaign, the brand used its data to show that 2018 is an optimistic year for them.
Using #Goals was intend back in 2017, and the music company capitalized on that idea to gain popularity.
2) Meme Marketing :
Who are Spotify's target users?
Well, the answer to this question is:
GEN-Z
MILLENNIALS
To build a relationship with GEN-Z and MILLENNIALS , the target users of Spotify, nothing could be better than Memes to target them.
The meme marketing strategy is widely popular that marketers use to make the audience laugh and sell their brand at the same time. Spotify also uses this strategy to connect with its target audience.
Where most of the brands use social media platforms, Spotify chooses conventional media mixes it with unconventional marketing communication. Billboards are a kind of unconventional media of marketing, and Spotify creates billboards that include memes.
So meme marketing is how the music company pitches its target customers.
3) Affordable Premium Pricing :
Spotify also has a subscription-based model where the users can download songs and stream music without any ads.
It is the Spotify premium which is a paid version. The pricing of its subscription base model is quite affordable for the users and that's how it manages to get its 155 million subscribers base.
One great thing about its subscription model is that it offers a one-day subscription to users at just at just Rs.7, where they can stream music ad-free and download up to 30 songs.
The streaming platform has various plans like prepaid premium plans, family premium plans, student premium plans, and premium duo plans. Even their premium pricing is affordable for users, and that's what the users love about Spotify.
4) Data-Driven Marketing Campaign :
Spotify masters its art of selling by using its streaming platform data. The company uses its music records and creates marketing content. So, it means Spotify, using Spotify, to sell Spotify.
An example of its data-driven campaign is the campaign that Spotify ran in 2016 that United the music platform with its users.
As we all know how weird 2016 was as Trump became the president of the USA, there were celebrity deaths, Leonardo de Caprio won Oscar and so much more was going on. So the brand capitalized on it and created a campaign name "Thanks 2016,It's been weird." The brand used its data and playlists and created some quirks that made the audience laugh.
Spotify's marketing team continued to rely on social media trends after their successful 2016 and 2017 campaigns.
5) Personalized Marketing :
One of the marketing strategies of Spotify is based on User-based content and personalized advertising.
Spotify offers a personalized experience when the user installs the app and uses it for the first time.
The users can opt for preferences of what kind of music and what artist they like. Spotify wrapped a feature that is running since 2017 and is a massive hit.
Also, Spotify runs hashtag campaign like #2020Wrapped and #2019Wrapped every year to promote this feature.
Spotify wrapped feature reports what the user has been listening to on Spotify the whole year. It displays the user's preferences, favorite artists, time spent on the app etc.
So that's how the streaming platform connects with users at personal level.
6) Brand Endorsements :
The brand needs an ambassador who is capable of connecting with Millennials and Gen-Z .
The famous actor Anil Kapoor is promoting the brand, and the actor's ability to connect with youngsters is the reason Spotify wanted him to endorse the brand.
Moreover, Spotify's latest campaign on women's day, #FlexYourPowerToListen is run by the sensational singer Neha Kakkar.
In short, the brand knows who is the right choice to promote their brand that it reaches out to millions of people.
7) A freemium model :
Users while using this app will receive an as every three to five songs. These advertisement are a way to generate revenue for the company. No free user can skip the ad . Although this can get irritating after a time, but most individuals enjoy getting free items .
Spotify is being talked about among brand marketers in the hopes of marketing their brands through the service because it has a platform that can promote to millions of consumers.
SPOTIFY’S BEST MARKETING CAMPAIGNS:
1) 2016: Thanks,2016. It's been weird
2016 was indeed a weird year and it was 2016 only when Spotify made a first data-driven marketing campaign. The campaign was very successful and it connected Spotify users with Spotify. The brand also let you know the year 2016 is a common enemy. You weren't the only one who felt weird about the year. Probably, everyone did. The message United the audience with Spotify and with each other.
2) 2017: 2018 goals
2017 was a great year for Spotify. The revenue grew by 40% and it was the right time to attract the attention of the universe loud and clear, which is exactly what they did.
#goals was a popular hashtag back in 2017.On Christmas 2017, Spotify made a campaign where it highlighted goals for 2018. The campaign was a huge success. Spotify saw a rise in subscribers, increased brand awareness, and showed that they care about user data and anonymity.
3) 2018: "#2018Wrapped"
Spotify knows what you listen to when you're sad, happy, broken, angry or when you're using the shower. In 2018, the brand decided to use this information for a marketing campaign. It's fun to discover what others' habits are like. Besides, the campaign makes it seem like creating a playlist is an enjoyable process on its own. Campaigns like this turn Spotify into pop culture and make its target audience want to join in on the music-streaming fun.
4) 2019: "Music for every mood"
Memes are insanely relatable and funny and they are the kind of pop culture that makes you feel as though the world understands you and you understand the world. Pop-culture marketing is also about understanding your target audience. The campaign also promotes Spotify podcasts, letting users know that the streaming service has "A podcast for every mood."
5) 2020: "#2020Wrapped"
This campaign was in honor of musicians and podcasters who kept all of us entertained, grounded, and informed within that challenging year of the world health crisis. As a result, the campaign turned into a short review of that eventful year through the musical preferences of the global nation. This campaign was responsible for increasing the Spotify mobile app downloads by 21% in the first week of December. Additionally ,it helped drive audience growth, increasing the number of monthly active users by 29% from a year earlier.
6) 2021: '"Only You"
Only you was launched in June to celebrate odd listening habits. On the flip side, there was the idea of belonging to a particular fan group behind the campaign: "You are unique, but you are not alone." During the campaign, users could see personal stats around their listening experience and share "a-few-weird-facts-about-me". Only you highlighted the new blend feature. With Blend, you and your friend can create and share a special playlist curated by the two of you. To blend with somebody, a user needs to invite a friend to the app. WHAT A NEAT TRICK TO GENERATE NEW LISTENERS!
Conclusion:
Spotify stands out as a leading innovator in the field of music streaming. With extensive collaborations, impactful campaigns and user-friendly marketing, Spotify have maintained their position as the top music streaming service. In an ever-changing digital world where technology advances at a greater rate, and competitors arise on a regular basis, to remain the top competitor in the market, Spotify must constantly develop their products and innovate their services to respond to the advancing needs of audience.