For the next year, Spotify has contracted Viacom’s advanced marketing solutions arm to create custom content, programming and influencer content development for Spotify globally.
The deal covers 15 different markets across North America, Europe and the Middle East, Latin America, Asia Pacific and India. Both Viacom and Spotify declined to disclose financial details of the deal, but emphasized its global scale.
While Viacom isn’t doing the media buys — Spotify will still be placing ads with the help of its agency of record, UM, and its own in-house agency — it will use Viacom’s reach on linear, digital and social platforms to make sure that custom content secures what June Sauvaget, Spotify’s global head of consumer and product marketing, described as “added value and premium inventory.”
While the pairing like that between Spotify and Viacom isn’t a common occurrence today, Sauvaget sees it becoming more of a norm going forward. “Having the upfront discussions means you’re able to secure premium inventory, higher-impact inventory at a lower cost, and that’s always beneficial to a brand,” she said.
Spotify chose to work with Viacom, she said, primarily because of its global reach and because of the variety of different channels and resources it has to reach what she described as micro-audiences. Examples might be the Gen Z audience for Awesomeness TV or the urban demographic for BET, she said. In the U.S., Viacom reaches 80% of consumers ages 18 to 34.
Sauvaget said that Spotify is a platform that doesn’t want to focus solely on paid media to drive its brand proposition; it wants to be able to reach and speak to new audiences who can be users, and because its content is so rooted in culture, especially through music, it needs partners who get those cultural references.
“The way our consumers pick up content is influenced by local nuances in culture,” she said. “We need partners who reference the very nuanced nature of our marketing efforts and are both localized and fluid.”
Last year, Advanced Marketing Solutions, Viacom’s advertising arm, brought in $343 million in revenues, and it has built up its expertise in digital tremendously. It has an influencer marketing firm, Whosay, a Gen Z-friendly digital studio called Awesomeness TV and streaming service, Pluto.
“Depending on the challenge we have, or the audience we’re trying to capture, we can fit into their different solution and have that work hard for us,” Sauvaget said.
“Advertisers can come to Viacom and buy TV, or do an influencer campaign or buy space at our events or buy digital,” Steve Ellis, evp of ad strategy for Viacom, said. “To be an effective marketer today you have to do all of it; you can’t just buy TV or Facebook. You need to be everywhere.”
Ellis said Viacom’s advantage for Spotify lies in its creative, distribution and reach, and an added benefit for Spotify is that the creative isn’t limited to Viacom’s properties alone. It can live and be distributed anywhere — but it’ll no doubt benefit from “premium” placement on Viacom’s channels.
“There’s a certain amount of commitment and a certain amount of output,” Ellis said. “You can distribute something with CPM value and deliver back a clear efficiency and price. That’s really how the economics of the deal are defined.”
Ellis said this deal is symbolic of how the client and agency system is changing. “We’re structuring businesses to address those needs longer-term and with a more holistic view.” The upcoming merger between CBS and Viacom, he said, will only “add even more value.”
Spotify didn’t enter into this partnership with Viacom blindly; it tested out what a potential partnership might look like with a few initial campaigns.
Last year, Viacom worked with Spotify on the RuPaul for Spotify’s Holiday ‘Wrapped’ campaign, and it drove the most traffic to Spotify than any other partner Spotify worked with on its annual campaign.
In June, Spotify enlisted Viacom’s help with the Sophie Turner for Spotify brand campaign “A Playlist for Every Mood or Moment,” and the Instagram story drove seven times the lift in site visits to Spotify in a single day.
Similarly, in the spring, Viacom brought in the stars of Hulu series “Pen15” to promote a Spotify Premium Hulu offer that drove traffic via an Instagram post that had twice more video views than Spotify’s average social posts.
Spotify is currently working with Viacom once more on its end-of-year “Wrapped” campaign, this time beyond just the domestic U.S. market.
Sauvaget said that Viacom isn’t the only publisher Spotify is interested in working with on future custom content, and said the Viacom partnership may be extended beyond a year if they continue to see success.
“My penultimate goal is to grow user acquisition,” she said. “All users are not created equally. When I think of a partner, I want to partner with someone who can bring high-value customers to us. It’s our determination that Viacom can lend us the reach into a consumer base that will be of high value to us. ”