Spotify is trialling a 'sponsored song' ad unit

Spotify is now testing a new "Sponsored Song" ad unit that a company spokesperson tells us is "a product test for labels to promote singles on the free tier".

Spotify has launched a new ad format called sponsored songs which lets labels pay to promote songs and have them appear in users' playlists.

Sponsored Songs don't appear as banners like the platform's existing ads, but are integrated into playlists you follow. The ads are targeted to match the listening tastes of the user, and can be instantly played or saved instead of requiring an ad click.

It's the next logical step from corporate sponsorships on playlists, too, and not all that distinct from the servicing that already goes on behind the scenes in an effort to get an artist into that prized new music playlist. Users will just have to untick the Sponsored Song setting.

The feature is now available to a small selection of trial users, but could be rolled out worldwide if successful. If that happens, this would be another way for Spotify to monetize content without having to drastically interrupt listeners on the free tier. There will be an option to opt out of it in the Spotify settings menu, but it might only be available to people paying to use the premium version of Spotify. The streaming service is now looking for ways to increase its revenue after losing an estimated $601 million last year-a huge loss considering its number of users have increased to 140 million. It could count number of listens, shares or impressions, as pointed out by Complex.

"Show sponsored songs" is an auto-enabled setting which Spotify seems to only be testing with some users.

The new multi-year licence agreement with Universal Music could make Spotify more attractive to Universal Music's artists, who include Taylor Swift, Adele, Lady Gaga, Coldplay and Kanye West. Not only will this generate some revenues from streaming, but it will also lead to more sales of concert tickets and merchandise, as pointed out by Digital Trends.

  • Carolyn Briggs