Ned Hayes [00:00:00] Welcome to Spark Plug, where we talk to smart people working at the intersection of business and technology brought to you by SnowShoe, Your smarter loyalty leader.

Ned Hayes [00:00:10] Sparkplug is excited to welcome John Gregory to the podcast. John is the global Category development officer for retail, QSR and travel at Spotify. He and his team work to grow these verticals within the business by being responsive to listeners and advertisers. Prior to Spotify, John was head of retail industry strategy at Pandora and the category development officer for retail at AOL. John is also a member of the New Digital Council, a group of senior level experts who discuss best practices and solutions in the retail industry. So we’re really looking forward to hearing about those best practices today from John. So welcome to the podcast. 

Ned Hayes [00:00:48] Thank you. I’m excited to be here. 

Ashley Coates [00:00:50] So glad to be chatting with you today, John. Well, so I want to start off with the fact that you’ve been in the business of audio streaming platforms for almost a decade. So first at Pandora and then at Spotify. So I just have to know, what are you listening to these days? Any favorite new bands or podcasts that we should know about? 

John Gregory [00:01:07] Great. First question. Well, I have to admit that I’m not the typical Spotify listener. I love classical music, especially piano and a lot of the great performers who actually perform it like Horowitz Rubinstein But I also love female jazz vocalist Ella Fitzgerald, Sarah Vaughan, Billie Holiday. And of course, with contemporary music who couldn’t love Harry Styles. So that’s something I listen to all the time. And with podcasts, I often listen to the Wall Street Journal. What’s new podcast every day just to keep up to date with, you know, news, analysis and such. 

Ashley Coates [00:01:38] Thank you. I’m going to be adding a couple of those accounts after this conversation. Well, so can you tell us about what is unique about the audio streaming platform industry, specifically as a marketing tool? And specifically regarding the verticals that you work on, retail and QSR categories like that? 

John Gregory [00:01:56] From an audio channel standpoint, I don’t think there’s any comparison to the one for all ad messaging strategy of mass terrestrial radio and Spotify capabilities with a registered audio streaming listener base. And Spotify is approaching very quickly, approaching, you know, half billion monthly unique visitors to our platform on a global basis, of which over half are on the ad supported side of the business. And we’ve built this audience by providing content that can be tailored to the personalized tastes of each listener. So the more each listener participates, the more we learn about their music and podcast listening. And now we added to that our audio book purchase behavior. So we understand, you know, what our loyalists are listening, what device time of day, whether in car home. And it’s with all these collected data points that we can provide incredibly powerful first party audience targeted capabilities for our retail QSR clients based on the graphics, music or podcast content, even moods, moments and mindsets, contextual tagging based on what our listeners are tuning into. So you name it, we can create the most appropriate targets to fit the needs of each of the subcategories within the verticals. And you know, along with it comes, you know, tailored creative messages to fit along with those targets. You know, these are all things you can’t accomplish with traditional radio or any mass media, for that matter. And it really you know, it’s the secret sauce for what makes Spotify so attractive to advertisers. So you just spoke about Spotify being attractive to advertisers. And I know that with TikTok and with other platforms, video has become huge. So what about the power of audio? Why is audio a long lasting platform that still has legs? So this is really the theater of the mind conversation and something we love to talk about. And we have an incredible amount of research regarding the impact of sound on the human brain. We call it Sonic Science, and this research was first conducted in 2021 with the refresh we’re calling Volume two, being released at the end of this month. And it was conducted using neuro insights, study, stage topography. It essentially measures the impact of sound on brain activity, brainwave activity. So on memory, on mood, emotion. And what this means for advertising is very important. I mean, the study found that listening on Spotify resulted in significant elevated metrics compared to traditional radio. Higher memorability, engagement, emotional intensity. And why is this? Well, it’s because of that inherent quality of the personalization of the listener experience on Spotify and the interactivity of experience. So this is a big and important advantage for advertisers. We found that about 95% of the brains engagement with Spotify content transferred directly into ad engagement, and this results in a higher brand impact on Spotify compared to other media. On average, about 19%. And we found that significantly outperforms television, social media, and that’s a positive. When it comes to persuading consumer behavior for our advertisers on the platform. Wow. That’s really fascinating. So the level of engagement is really high there. I’m curious, with your particular domain of retail, what are you seeing as specific demands from retailers and how are you responding to those needs from the retailer? Well, over the course of my career, I’ve learned, especially in retail, that every day is a new day and you have to be prepared for the unexpected. But given the current state of the economy and the outlook for what might be a tough time ahead with consumer spending, many of our clients have shifted to a more mid to lower funnel strategy to drive consideration and traffic to stores and ecommerce, of course, and the use of dynamic audio to deliver message variations can be incredibly important in this type of especially for weekly promotional messaging that can change on a day to day, week to week basis. And also we are using our call to action cards, which it’s been really a great solution for retail, for an audio visual type of combo on our podcast platform with CTA cards, call to action cards. After hearing an ad message, the listener is immediately given a corresponding message that appears on the Spotify app, and this provides a sustained message for a period of time after that audio had is first listen to. So when they return to the podcast series or an episode, a visual cue reappears reminding them of the ad message they received or the offer that was given to them. So it’s a sustained reminder, which is very important for retail when it comes to the driving to store, bringing interest to new things. Offers that are currently available to them. And we’re actually now testing a new version called Browser CTA Cards that provides a scrollable product view which adds even more engagement to the experience. These are just a few examples of the more tactical solutions that address the immediate needs of the marketplace. Then, aside from that, we offer impressive reach and scale and the digital media landscape with our highly engaged audience expands. Believe it or not, on average two and a half hours a day listening on the platform. So we have great engagement, a very sticky environment, which comes to a very important element of importance for our retail clients. All of our clients for that matter. Right. I’m especially interested in what kind of content or what type of engagement you see with smaller retailers. The reason I’m asking is that every big retail company started small, so I think small is beautiful. Yeah, we have a lot of opportunities across the board, even for small and medium business, which pretty much constitutes most of the retail. Across the country, there are thousands of smaller retailers who can’t afford big spends on big media platforms, and we have developed what we call our ad studio, which is a self-serve model that allows smaller retailers for very low minimum spend. I think it’s $250 to place their own audio ads and podcast ads on our platform. But all they have to do is provide a script and our team takes that script, turns around an audio ad within a 24 to 36 hours based on the script and the kind of music that they’re looking for in the voiceover. So we’re giving everyone the opportunity to participate in our advertising environment, even at the very small level. 

Ashley Coates [00:08:18] That’s fantastic to hear. So John, can you tell us about some of these marketing packages that you put together for your advertisers? 

John Gregory [00:08:24] Yeah, I would say that the most successful programs are the ones that use both music and podcast audiences on our platform, and it’s using this combination of sight, sound and motion that covers passive listening and laying down moments that creates a much more effective and amplified experience on the platform. I mean, just imagine that there are many times when you’re going about your business and listening to a music or content on a platform, but there are plenty of moments when you’re on your desktop or you’re actually on your mobile device and choosing content or playlist, whatever it might be. Those are totally engaged moments when you have 100% share of screen. So those are the kinds of moments when advertisers are taking advantage of placing video content or display messaging, things that really bring a broader perspective to their brands on our platform. So it’s not always just about audio. On Spotify, there are plenty of opportunities to build more immersive experiences using other media channels. Well, I know that the media landscape is changing always, but I’m curious if you could speak a little bit about some of the trends that you see. What are some of the consumer or retail trends that you see happening on the platform? Well, from a just a general listener standpoint, it’s actually amazing how events take place, you know, across America or the world for that matter, impacts listening behavior. On Spotify, for example, the World Cup, that was earlier this year when Argentina won global streams of to a song by the mascot spiked by over 40 300% and just. The streams of Linda Ronstadt song Long, long time increased, I think 5,000%, some incredible number. After the third episode of The Last of US, which aired in January. And of course, most recently, the great example is Rihanna’s halftime performance at the Super Bowl. I mean, streams of her music spiked over 600% after listening to her music during that performance. So you can see that the engagement on Spotify is definitely a reflection of what’s happening in the consumer marketplace. And is that halo effect really is a benefit to all of our advertisers. So our goal is to bring broad presentations, broad experiences to our listeners across the board, whether it be music, podcasts or momentary opportunities such as this that I’ve just described that provide an opportunity to engage with our audience. Right. And to circle back to retailers, because the majority of people who listen to this podcast are actually retailers. And I’m curious if there are specific trends that retailers should be paying attention to, especially post-pandemic. I mean, the world has switched, but it’s not exactly the world that we had pre-pandemic. You know, the retail landscape is different. Absolutely. And this is something I actually talk about all the time. The consumer media landscape is changing continually. And I look back on my career and think, Oh my God, 20 years ago, direct mail and weekly newspaper circulars, that was the name of the game. And maybe ten years ago it was magazine advertising and, you know, local television, you had to be there. Well, media consumption has changed dramatically and it has moved to the digital media landscape. And as a part of that, Spotify plays a huge role because we have such engagement and such a large audience. So it’s very important for retail clients to be where their audiences are consuming media, and especially for a younger skewing audience. It’s not television, it’s not traditional media, it’s digital media, of which, as I said, you know, Spotify has a huge influence. 

Ashley Coates [00:12:05] So I’d love to ask you about customer experience and loyalty and maybe starting from the perspective of Spotify. Many of our listeners are brick and mortar retail owners and certainly understand the value of creating memorable customer experiences. So what kind of customer experience does Spotify aim to create for your listeners? 

John Gregory [00:12:25] Well, from a retailer standpoint or a client standpoint, we have plenty of opportunities to help build loyalty with their listener base, and that can be many things branded profiles on our platform, which essentially gives brands the real estate for fleshing out a deeper relationship with the listener as it relates to their brand branded playlists, branded content that really becomes essentially a destination on a platform for their loyalists. And of course, we have premium codes available to our clients to essentially give to Spotify premium to their best customers for a brand loyalty type of initiative. And we do have and products that deliver on the promise of loyalty and building those engagements, such as a sponsored sessions where an ad supported listener is gifted 30 minutes of uninterrupted listening and in exchange for listening to a video ad from one of our advertisers. So it’s kind of like a gift for you that brings positive vibes and a positive echo to the advertiser. And we’re also creating incredibly immersive experiences like the stage which we launched last year on our mobile interface. That is a thematically driven engagement of sights, sound and motion that gives our brands the ability to deliver personalized playlists or other branded experiences based on a campaign theme. It could be video content, it could be product launches or runway shows. It could be many, many things that relate to the the campaign of the moment. And these are meant to be sticky engagements that increase listener time spent with the brands, even down to having QR codes. It has points in the store that would connect the dots between a particular initiative being executed on Spotify that would connect that physical viewer of the QR code to the initiative that they’re launching and activating on the Spotify platform. So it could be a lead to the stage experience, It could be sponsored playlists that could be a playlist that relates to a particular aisle in the store or category of merchandise in the store. We’ve done things with the Calvin Klein and some other specialty retailers that are specifically about launch of new products. They were a launch. We did initiative that had in-store labeling that led to experiences on our platform last year when London was emerging from the COVID impact on retail, we did a big program with Oxford Partners, which was the trade group that essentially represents all the big retailers in that area. And we created a playlist scavenger hunt, more or less on the street where it was meant to draw customers from one story to the next to pick up different playlists based on the QR code they were scanning and it would allow them to build a playlist for the Oxford Street experience that had many different types of genres of music related to the launch of that initiative to bring people out to the stores again. So there’s a lot we can do. That’s really fantastic to hear. So are there technologies that Spotify is using, especially to help create unique experiences? Well, you know, we have definitely this technology that allows our advertisers to put different types of media creatives on our platform, be it audio, video or display content, which speaks to our focus on the greater community from a broader perspective that our goal, our mission is to keep things fresh and new and always have something that is worth coming back to listen to or experience. So for us, that comes down to the initial artist who’s creating their voice on the platform and using Spotify, distribute that voice, whether it be podcast music. So we provide the tools to creators that feed the content that brings our listeners back and is from the very grassroots of that. We provide that type of initiative and interactivity and opportunity for creators to develop their own voice on the platform. And that actually has provided opportunities for some of our clients to kind of embellish that idea of new and different and up and coming artists that correlates to their brands in many ways as well, depending on the brand. Of course, every brand has a different marketing plan or different initiative, but there are things like that we can match to almost any retail QSR or travel initiative from that standpoint. 

Ashley Coates [00:16:50] Yeah, well, it’s so great to hear how Spotify is able to help your advertisers create their customer experience and even create customer loyalty. I’m just curious, how important is creating customer loyalty to your advertisers these days? We certainly talk with many retailers about how customer loyalty is a very important thing to them, especially now. And is that a big ask that your advertisers are coming to your with when they’re looking at putting on Spotify? 

John Gregory [00:17:17] Oh, absolutely. I think it’s, you know, a general rule of thumb that it costs five times as much to gain a new customer or bring a customer back then to maintain the current customer. So I think it’s important for brands to keep that engagement with their audiences in ways that are most relevant to the platforms they’re using to advertise and to share their messaging. So our Spotify, it’s almost like our success is their success. The more we can provide the right listening experience and the right technology to deliver that experience and keep the content fresh and new and personalized, the more engagement it provides for our retail clients to match with their loyalists on our platform. And we have incredible opportunities to onboard first party data from our retailers that helps match those audiences to then better serve different parts of their customer base so that the more data we can share and combine, the better we can provide strategies and programs to better connect with their loyalists. Right. Well, I’ll just ask a leftfield question for you, John. We’ve been talking about retail. We’ve been talking about audio experiences. I’m just curious, on a personal note, what are some of your favorite retail experiences? You know, when you go out shopping, where do you like to go? What kind of retail experience do you like to have? You know, it depends on what I’m looking for and what kind of experience I’m looking for. But, you know, it’s both high and low. It’s being able to go to a Wholefoods store and find, you know, fresh produce or new items, discovering new things that I wouldn’t necessarily find at all the stores and the way it’s presented that’s interesting and fresh and new. But probably even like a wardrobe standpoint, there are some brands I really, really love. John Varvatos brand is one that comes to mind for me. I’ve been a loyal customer of that brand for many years because because of the customer interaction, I think it’s very important for any retailer to be able to speak to the customer and know them, be able to determine what best fits their needs and be able to do that on a 1 to 1 basis, whether it be online or in-store. And that in itself is a huge opportunity that for so long retail has talked about this quote unquote omnichannel experience, which is great. But to me, it speaks to the infrastructure of connecting the dots between channels, whether it be e-commerce or store or mobile, whatever it may be. But what’s most important is how those touchpoints are joined together in the continuity of experience. So the omni channel, you know, sound bite really speaks to the infrastructure that allows that to happen. But from a branding and marketing perspective, it’s very important for all of those touchpoints to be similar or have the same type of meaning. To their best customers. And that’s what I get, you know, through shopping at, you know, places like Chopper, Barbados or Target, even, you know, grocery stores. I’m a big fan of my local stop and shop, which allows me to shop as easily online as it does going in store. So it’s that convenience and continuity of experience, I think, is most important. And what brings me back to the retailers I like to shop at. Absolutely. I concur that having that convenience and shopping, mobile shopping online and shopping in person as being a seamless, a seamless world is great, especially for convenience. But that continuity that you mentioned is is key, especially for curated retail experiences like smaller stores. You know, I live in a Cuban neighborhood in Portland and we have some amazing small stores with handcrafted goods in them. And every time I go in, I know where I can go to get the chocolate. I know where I can buy leather goods in the same store. I know some of the artists who made the work there. It’s a different kind of a retail experience, and I just wonder if that kind of retail experience matters now. And I think it does. Absolutely. I’m so glad you brought that up, because before COVID hit, there was this trend in retail even that some of the big players to start having a point of view that up until about five, six, seven years ago, so many retailers tried to be everything to everyone, which can’t be successful because you can’t there’s no point of view. There’s no brand identity that relates to that. And there was a lot of activity with some of the big retailers to bring in capsule collections or focus on a particular experience in the store, something that helped differentiate them from the other perceived competitors in the marketplace. And it was a replication of what we were saying in, you know, the streets and villages of America, those smaller stores that had great service, a great point of view, different types of merchandise that they couldn’t find elsewhere. And that started to translate into the bigger retailers until COVID hit. And at that point, all bets are off. It was a fight for survival the last couple of years. So those kinds of things fell by the wayside for the big retailers. But we can see that coming back now. More and more, the focus on store brands and having a personality that goes along with your brand that’s different from another, I guess I said perceived competitor. And we’re also seeing higher degree of competition from entrepreneurs who may have been displaced during COVID and are now starting a new and again finding those fresh spots to build their niche in the marketplace. And I think that’s a huge opportunity. It’s what we’re seeing actually through our ad studio self-serve model, that there are a lot of smaller retailers, you know, quote unquote, mom and pops who are savvy enough to know how to use digital media to their advantage. So it’s no longer like a store just standing alone in a village. And they’re relying on local, local word of mouth to build their business. There are opportunities now to invest in digital media in a way that could be really important for their business, so large or small. It’s so that there are tools on hand to make your business successful. 

Ashley Coates [00:23:03] Yeah, absolutely. And that’s so great that no matter what size your business is, you have access to those tools. So I’d love to go back to audio streaming and Spotify Square business. John, as we start to wrap up, how do you see streaming platforms continuing to evolve? Where do you think we’ll be in the next 5 to 10 years? 

John Gregory [00:23:22] I think it’s safe to say that our goal is to own the global audio space. I mean, music, podcasts, audiobooks now, and you know, as an extension of audio books where you can take that type of content to different consumer categories, you know, do it yourself, educational environments, language training, audio guides, I mean, the sky’s the limit given audio. Is it just, you know, it’s not just a sideline for Spotify and like, unlike some of our perceived competitors in the marketplace, it is our business and it’s our business to the core. So we are fleshing out some way different types of experiences and engagements that will speak, you know, long term to the future of our platform. From an audio standpoint, it’s not just something, you know, like other competitors in the marketplace, they just bundle with other opportunities. It is our business, it is our focus, and we are planning on being first and foremost an innovation in the marketplace. 

Ashley Coates [00:24:18] Well, we’re so glad to have you on the podcast today and get such a great inside look at everything you’re doing at Spotify. We do have one last question for you as we wrap up, which is what do you want your legacy to be? What would you like to be remembered for? 

John Gregory [00:24:34] Oh boy, this is a tough one. It’s like share roaches and John, they all survived. You know that anybody I mean, retail could be a tough business. And, you know, over the last 30 some odd years, I’ve written many rollercoasters up and down. So I would say survival and, you know, rolling with the punches and keeping things moving. But for the most part, I think many people. To say about me that I’m just never satisfied with the status quo. And I’ve always pushing the envelope to do more, bring more, you know, develop more. So I guess, you know, I could be considered someone who always wanted more than what might have been allowed in, you know, conventional thinking. So just trying to push the boundaries, That’s how I would like to be remembered. Someone who kept pushing forward. Thank you so much. I really appreciate the time. Thank you. Thanks for having me. 

Ned Hayes [00:25:27] Sparkplug is a wholly owned property of SnowShoe. Copyright 2022-2023 Spark Plug Media.