According to its official web page, Spotify is a digital music, podcast, and video streaming service that gives people access millions of songs and other content from artists all over the world. (Spotify, 2018) in this case study, we are going to analyze the digital marketing strategies used by Spotify to became the most used application for listening to music in the world but looking deeper into the Australian market.
Actually, Spotify gives the customers 2 different ways to access the service, Spotify free that has ads, limited access to the playlist and other features. Spotify premium is the paid version of the service in which customers have access to unlimited playlist and features without the necessity of listening or watch ads in order to listen to music. Nowadays the company has more than 180 million active users of which 83 million are paid subscribers (DMR, 2018) Figure (Morales, 2018) Free mode Spotify allows the ads, companies that want to promote their products have the possibility of choosing the target audience for its campaigns based on the profiles that Spotify has of their customers (Age, Country, Gender, lifestyle etc.) and based on the songs and playlist that the customers listen. Premium mode Spotify family This version of Spotify allows customers to pay 1 account for 6 users that live in the same address. The advertisement campaigns for the familiar plan are so funny, there are some videos posted on different social networks that we are going to talk later, that shows the daily life and the interaction between dads and sons and its differences or similarities of their music preferences. Spotify uses in some of its videos for this family plan some daily situations in which probably must of us have been before like the moment where family share breakfast, lunch and dinner, connecting those moments with some music or songs that fit perfect with the situation making it funny and generating that customers feel identified with the situation and in consequence with the brand.
Spotify students This version of Spotify allows students from universities to access all the features of the premium plan but with a lower price.The advertising campaigns for Spotify students are cool, it represents those moments in the lifestyle of the students and understands the needs of a person that is coursing a career on a university and have some constraints about saving money, but also the necessity to listen to music for every moment of their lives. The commercials represent different situations of student lifestyle and propose big varieties of playlist for every moment such as writing an essay with appropriate music, working out in the gym with inspirational music, sharing with friends on parties with dancing music etc.
With the variety of moments and playlist for each one, the target customer, in this case, the students feel that the company take care of them and understand their needs reducing almost 50 % the price for the premium subscription, this action create engagement and good relations with consumers that develop a habit of listening to music on Spotify and with the pass of time will continue using the service remembering commemorative moments of their life like its university lifestyle. TheoryDigital Marketing is the use of internet, mobile devices, social media, search engines, display advertising, and other channels to reach consumers (Investopedia, 2015) A number of analysts think that Spotify main success reason and why the company has a higher market share than its direct competitor apple music is because the brand is focused on specific groups of people and do a really good segmentation. One of the ways to do segmentation is the psychographic also known as lifestyle segmentation, this type of segmentation consists on divide the market into specific groups based on consumer interests, values, attitudes, lifestyles, and traits. Spotify use of the psychographic segmentation that consists on dividing the streaming music market into small groups and focusing on them, one example of this practice is the premium version where the company focuses on university students understanding their interest, needs, attitudes, and lifestyles. A huge part of the total consumers of Spotify are people with similar lifestyles. This groups of people with common preferences and likes from around the world are Known as tribes. In the past the word tribes was used to refer to a group of people that live as a community in a determined place following a common goal, now at days with the development of technology that generated an interconnected world in which the word tribe can also be associated in the marketing field as a group of people from all over the world that share similar interests, tribe is one of the ways of psychographic segmentation. Following this strategies Spotify focuses on tribes worldwide such as the gamers and the LGTBI communities creating a closer approach to each one, generating identity and engagement with its customers.
In the case of the gamers community Spotify started to make alliances with some video game brands like Sony and Xbox understanding the needs and the lifestyle of these group of people, now gamers can listen to music and special gaming playlists while they are playing its favorites video games in their consoles. The strategy to obtain the attention of these group of people is through collaborative publicity with the video games brands. Image (Spotify, 2016) Image (Spotify, 2017)The gaming community on Australia Digital Australia report (2018) statistics • 16.481.285 of gamers • 67% of Australians play video games• 34 years is the average age of video game players.
• 89 Minutes is the average daily total of all gameplay• 28% have posted on social networks their own videos of gameplay. Image (Australia Digital report, 2018) A Group of people that have suffered a lot during the history and that now at days are taking place and respect in high volumes across different cultures and countries is the LGTB community in which Spotify has paid attention and had created campaigns supporting them, with a number of videos the company communicate the difficulties that this group of people had to suffer in the past and solidarized with those actions generating that this tribe feel identified with the brand. One example is the video in which Spotify with the collaboration of the worldwide celebrity Miley Cyrus talks about the situation of the LGTBI community in 1969. Image (Spotify, 2017) According to Roy Morgan research the number of Australians getting gayer id increasing, the survey results shows that the percentage of people that accept that is part of the LGTB community increasing from 2.4 % to 3.4% in 9 years. (Nagaratnam, 2015) Taking this percentage into account the average of Australian that are part of the LGTB community is 836.363Spotify digital presence Searching on its web page Spotify only mention its presence on 3 social networks Facebook, Twitter, and Instagram but the company also has official accounts on YouTube and LinkedIn.
The company with the help of some recognized artist create content to then share it on its social networks attracting new customers and generating engagement with the actual consumers of its service. This was a campaign that the company did on 2017 with the Australian singer Emma Louise’s, the company organized an event with the presence of the singer top fans in Melbourne where she launches her last album “Lilac everything”. The company shared the experience on Spotify Australia Facebook official page with the hashtag #Spotifyfansfirst obtaining more than 25 thousand views. Image ( Spotify Australia, 2017) Famous singers from around the world promote and name the service in different ways, that’s the case of the Australian singer IGGY AZALEA that is constantly sharing content in its social networks especially on twitter where she has 7, 94 million of followers naming on its posts @Spotify promoting on an indirect way the platform telling to its customers that new content is available and call to action. Image (Azalea, 2018)Apart from the promoting of the service with the collaboration of famous singers the company also use one of its principal sources to create content and engage with customers that is the practice of analyzing people behavior and translate it on useful information “Big data”. According to TechTarget company writer, Margaret rose, big data is defined as a voluminous amount of structured, semi-structured and unstructured data that has the potential to be mined for information. (Rose, 2016) This was a campaign launched in New Zealand and Australia in 2016 focused on millennials, the content was based on the public playlist created by the users, the company generated some ads across outdoor media, social media and digital advertising in which they exposed the weird names of those playlists generating funny suppositions and calling to action.
Image (Doyle, 2016)Social network Followers Posts Average response timeTwitter 2.73 Million 26.900 30 MinutesInstagram 2.6 Million 1.695 No responses Facebook – – 30 Minutes YouTube 237.125 243 No responses LinkedIn 457.
117 2-3 per week No responses Figure 3 (Morales, 2018) According to the professional marketer Maura hickey analysis, the most active social network for Spotify is twitter where the company make around 1 to 4 posts daily and have a response average time of 30 minutes. Actually, Spotify has 2, 73 million followers and a total of 26.900 posts on this social network.Instagram is the second most active social network for Spotify where the company makes fewer posts than Twitter with 1 to 4 post every 4 days, according to Maura the Spotify presence on Instagram is not enough because on a research that she made conclude that Spotify is more mentioned on Instagram than in other social networks. (Hickey, 2018) On Instagram, the number of followers that Spotify has is 2, 6 Million and a total of 1.695 posts. Another social network in which Spotify is present is Facebook where the company has a number of pages from different countries generating specific content and adapting to each culture, in this social network the company has a response average time of 30 minutes.
Story tellingIn 2006 a web developer called Daniel Ek and an investor called Lorentzon both from Sweden had the idea to found a music enterprise that one year later they named Spotify. Due to barriers imposed by record brands about song licenses Spotify waste 2 years to be launched, on 2008 Spotify was on Sweden, Finland, Norway, France, United Kingdom, and Spain. 4 years later the company entered to the Australian market. Despite the inconvenient that the company had at the beginning, the process of globalization was fast getting in more than 60 countries, available now in 50 languages in less than 10 years a good example of a born global enterprise.
According to the svend hollesen global marketing book a born global company is a firm that from its “birth” globalizes rapidly without any preceding long-term internationalization period. Daniel Ek and lorentzon meet years before the foundation of Spotify because Daniel was the owner of a company called Advertigo a digital marketing company created when he was 16 and sold at the age of 23 years to an investment group called Tradedoubler in where lorentzon was part. From this moment started the story of those Sweden boys that with the pass of time created one of the most successful global companies in one of the most competitive industries.
