The two new formats include "sponsored sessions", a mobile offering that prompts Spotify's free listeners with a choice. They can either agree to watch a branded video and get 30 minutes of ad-free music, or decline and stick with frequent, audio-only ad breaks.
The second "video takeover" format is only available within Spotify's desktop client, and playing a branded video when a free user is actually looking at the application. The ad will play as audio-only if the desktop client is minimised, meaning a brand is never paying for the more expensive format. Both ad products offer a post-roll clip showing a call to action.
The video takeover service will not be available on Spotify's free in-browser player, launched in March last year.
Spotify will roll out the products in beta from today with its launch partners, including Ford, Coca-Cola, Kraft, McDonald's and NBC.
This is a quality product, this is a premium product, and the price will certainly reflect that
Spotify's UK MD, Adam Williams, told Marketing that the product would open up to all brands some time next year. He would not reveal how much Spotify's partner brands are paying for their ad spots, but he said the new products were pitched as premium offerings.
"As we continue to look at how the tests go with our long-term partners, we're working from there," he said. "This is a quality product, this is a premium product, and the price will certainly reflect that."
Video and mobile remain the fastest-growing areas in digital advertising, with video spend growing 48% year on year in 2013 to $204m (£126m), and mobile growing 24% to $137 million (£83m), according to PwC's 2014 Global Entertainment and Media Outlook report.
The new ad formats give brands access to Spotify's 30m free users. Though the company doesn't give a breakdown between mobile and desktop, Williams said Spotify was now a "mobile-first business" since launching free tiers on mobile last year, with almost half its UK track plays taking place on mobile.
He added that the company would roll out a number of new ad formats over the next two years, with advertisers largely clamouring for video.
"It’s something our clients have asked for," he said. "If you look at growth of that market, it's an area that advertisers are investing heavily in. It adds another string to our bow and another visual element."
Spotify first pitched the new ad formats to brands at Cannes in June.
.jpg)
.jpeg)
