A mysterious ‘Sponsored Content’ opt-out setting was recently spotted on Spotify’s free tier by U.K. sound artist Liam Maloney, and TechCrunch has been able to confirm with the streaming company what it’s all about. As it turns out, Spotify is currently testing a new ‘Sponsored Song’ ad unit that is “a product test for labels to promote singles on the free tier,” according to a Spotify spokes person.
What this means is that labels could pay to have certain songs injected into your playlists or whenever you’re using the service for free, instead of an obvious ad banner that says something like “listen to this new album by this new artist” the way other ads for external apps and sites do. This means that Sponsored Songs can help it earn some money off the free tier, even if it’s not paid by the consumer. That said, it’s not yet clear if Spotify will charge labels based on cost per impression, action, listen, or some other method that differs entirely from web advertising.
Done well, you may not even notice if a particular song is sponsored. The feature is said to use a method similar to one of Spotify’s best features: Discover Weekly. This uses personalized, weekly-updated playlists that tries to understand your taste in music, and gives you a playlist that Spotify thinks you’d make on your own every week, as well as attempt to introduce you to new artists. If a sponsored song is injected into the Discover Weekly playlist, then not only will you not notice that you’re listening to an ad, but when you finally do, it’s with the hopes that the particular song is one that you like very much, and that you’ll support the artists directly by other means like buying albums or concert tickets. We’re guessing if it’s done as well as the Discover Weekly playlist, then even paid users wouldn’t mind being given a sponsored song or two.
All that said, Sponsored Songs are still in testing. If and when they roll out officially, it would still only appear to users on the free tier, according to what Spotify has told TechCrunch. Which makes sense since it’s going to work the same way Discover Weekly does anyway, and there’s little sense in making labels pay for songs being listened to by paying subscribers.