Q&A: Jeff Levick, Chief Advertising Officer, Spotify

Levick

Following up its U.S. launch in July, U.K.-based music streaming service Spotify brought on Jeff Levick in September to lead its global ad unit. As the former head of global advertising and strategy at AOL, and a member of the original ad team at Google in 2001, Levick brings deep experience to the newly created post of chief advertising officer at Spotify.

The 3-year-old online music service has drawn 10 million registered users to date overall, including 2 million paid members. Last week, it was among the media partners Facebook announced at its F8 conference. That alliance alone has reportedly increased Spotify's monthly active users by 50%. Online Media Daily caught up with New York-based Levick to discuss his plans for building Spotify's ad business.

OMD: What attracted you to this new post at Spotify?

Levick: What's really exciting about Spotify is that it's a platform that's disruptive of a traditional model, but at the same time, trying to do something audacious that affects every single person in the world: Making music accessible and easy to share and be social with their friends. Spotify is actually doing it and has a track record of success.

OMD: What's your immediate focus as you start this job at Spotify?

Levick: Spotify, as you know, is a freemium model. We have two revenue streams -- one is from advertising and one is from subscriptions -- and both are incredibly important to the company. They're also important to the labels. This allows us to provide a revenue model that allows labels and Spotify to make money. The advertising side of the business is 100% focused on the free platform. My focus is on making sure there is healthy and sustainable advertising in the free products so we can continue to make the service available globally.

The second part of it is to bring a level of new products and innovation to the advertising side as well. The company -- rightly so -- for the last few years has been 100% focused on the consumer products, making it the best platform available for listening to and making music socially shareable. But [Spotify CEO] Daniel Ek's remit to me has also been that now is time to start thinking about innovative things we can be doing on the advertising side that are relevant for the platform.

Today there's in-stream audio ads, there's also display ads that are in the clients, but it's really what is the right advertising vehicle for music and for Spotify, and that's the big question that I'm tackling with the team.

OMD: Have audio ads been the backbone of ad revenue to date -- will they continue to be?

Levick: Audio is a huge part of the business; it performs incredibly well. The real difference is that we have both audio and display on a platform. One of the interesting opportunities is actually working with agency groups and working with clients to say this is the first platform where you actually have ability to use audio in real-time to create real response in a display environment. Where you'll see us do a lot of innovation is in the world of audio and display, connecting together to drive action.

OMD: At AOL, you were very involved in Project Devil, leading to the rollout of larger, attention-grabbing display formats. Will that influence your thinking at all at Spotify?

Levick: The lesson to be learned is it's really about the right ads for the right platforms. Traditional display advertising was built because it wasn't really tailored to the platform -- it was built for. Facebook has a great advertising system that's tailored to their platform, and we believe there's a great advertising system to be built that's tailored to Spotify. It's more about relevance than it is about size.

OMD: Have the bulk of Spotify advertisers to date been European-based?

Levick: We've only been launched a short time in the U.S., with a handful of early launch partners exclusively until Oct. 15. Starting after that, Spotify will be opened up to the whole of the U.S. marketplace, and you'll see a more diverse group of advertisers running in the free product. In Europe, it's been multinational brands as well as European brands -- the Coca-Cola's, the P&G's, the McDonald's -- they've been running in Europe. Are they also interested in running in the U.S.? Absolutely. So a lot of U.S. brands already have used the service in Europe, and it's our goal to bring the success they had in Europe to the U.S.

OMD: Can you talk about the partnership Facebook unveiled at its F8 conference with Spotify and other Web music services? How does it further your marketing goals?

Levick: It creates much more reach -- much more engagement for Spotify and our advertisers. It continues to grow the number of people on the platform, and it encourages more sharing and listening of music. And it's a huge benefit for advertisers who are looking for more scale from us. So if you're listening for free and you're doing it through Facebook, you'll continue to hear audio ads after every third song. It's the same Spotify player -- it's just working behind the scenes when you're listening on Facebook. More consumption, more users, will still mean more ads for Spotify.

OMD:  Why has Spotify started requiring new users to have a Facebook account?

Levick: We think it's the social aspect of music that's really made this so powerful. And obviously with Facebook, with 800 million people strong globally, we believe it's the easiest way for people to sign up for the service.

OMD:  Are you concerned about alienating people with that step?

Levick: The goal is not to turn off anyone, but to make it as easy as possible to sign up for the service. Facebook has done a great job of making it incredibly easy to sign up through them. We'll continue to watch things and listen to the market and take feedback and for now it's been a great working relationship [with Facebook].

OMD: What is Spotify's use like on mobile devices and how does mobile fit into the ad picture?

Levick: Today we don't have a free product for mobile -- that's part of the paid service. If you upgrade to the $10 subscription, you basically can take your music anywhere on any device. It's foreseeable that we launch a free product for mobile in the future, but we don't have any immediate plans to do that.

OMD: In an economy where marketers may be pulling back on ad spending, how do you convince advertisers to spend money in an emerging category?

Levick: A lot of major brand advertisers' strategy has been around music. They sponsor festivals, they sponsor concerts, they sponsor artists. They're looking for young users who enjoin and engage through music. We've got a great audience from a demographic point of view and we're in a medium that's the universal currency for everyone. It's hard to find someone who doesn't have some attachment to, or love of, music. Brands want to figure out how to get deeper into that very passionate and engaging experience.

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