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Jamie Huggins IMC 613 — Week 9 1
Spotify Brand Audit
Jamie Huggins
IMC 613
Source: 9to5google.com
Jamie Huggins IMC 613 — Week 9 2
Table of Contents
Executive Summary………………………………………….………………………..……………………..………………….3
Industry Background……………………………………………………………………..…………………………..…………4
Brand Position…………………….……………..……………………………………………………….………..……5
Points-of-Parity………………………………………………………………………………..………….……………..6
Points-of-Difference………………………………………………………………………..…………….……………..7
Target Audience……………………………………………..….………………………………………….……………8
Allocation of Branding Resources………………………..…………………………………..…………………….…8
Benefits Gained……………………………………………………………..………..………..…………………….…9
Competition……………………………………………………………………..………………….……………………9
Brand Inventory……………………………………………………………….…………………………….……………….….12
Service Offerings………………………………..………………….…………………………………………………12
Brand Elements………………………………………………………..…………………….…………..……………13
Brand Associations…………………………………………………………..………………………………………..14
Company Perceptions………………………………………………………………………..……………………….16
Marketing Support Programs………………………………………………………..……….…..……………….…19
Competitive Environment……………………………………………………………………………………………..20
Brand Hierarchy………………………………………………………………………………..………….…………..22
Brand Exploratory……………………………………………………………………………………….………………..…….24
Service Offerings (Consumer Perspective……………….……………………………….…..…………………….24
Brand Associations (Consumer Perspective)……………………………………………….…..………………….25
Company Perceptions (Consumer Perspective)…………………………………………..………………………27
Marketing Support Programs (Consumer Perspective)……………………………………………..…………….29
Competitive Environment (Consumer Perspective)…………………………………………………..……………30
Target Market…………………………………………………………………………………………………………..31
Perceptual Map……………………………………………………………………………………….………………..32
Classmate Survey……………………………………………………………………………………………………..33
Recommendations……………………………………………………………………………………………………………..36
References……………………………………………………………………………………………………………………….39
Jamie Huggins IMC 613 — Week 9 3
Executive Summary
This brand audit is a health check for Spotify and seeks to identify and address any
problems the brand may be facing with the purpose of improving brand equity and the bottom
line. Within this brand audit is an industry background, a complete brand inventory and brand
exploratory, and a recommendations section for future improvements to the Spotify brand itself.
The brand inventory section provides an assessment of the health of the Spotify brand
and its sources of brand equity from the company’s perspective. The brand exploratory
recognizes what Spotify consumers perceive about the brand in order to better understand it
and address any possible weaknesses it may have.
With over 75 million active users in 64 different countries, it seems safe to say that
Spotify is certainly doing something right. The brand continuously strives to be innovative and
increase its services to better appeal to its target audience. However, because Spotify is a
challenger brand in the digital streaming music industry, it will have to make strong efforts to
truly connect with its user base and turn “Spotify” into a household name in the United States.
The two main issues surrounding Spotify that were discovered in this brand audit include
the following: a lack of brand awareness among Spotify’s target market of Millennials and a lack
of market share in the digital music streaming industry. Recommendations to maintain growth
and success include improving market share by growing both free and premium user bases and
improving brand awareness by creating multi-platform advertising campaigns.
These challenges and recommendations present an opportunity for Spotify to continue
grow as other competitors launch their own services and products. If Spotify can grow its
market share and increase its brand awareness among Millennials, it will greatly improve the
brand’s chances of remaining one of the top music streaming services and one day, perhaps,
being the top music streaming service in the industry.
Jamie Huggins IMC 613 — Week 9 4
Industry Background
While the music industry had experienced decline in past years, especially in the area of
album sales, the industry as a whole is not down.  In actuality, the industry has recently
experienced a boost in growth, which has counterbalanced declining album sales. This growth
is the result of streaming services, like Spotify. "Streaming is beginning to fill gaps in digital
revenue that options like music downloads used to occupy. In 2014, digital downloads from
iTunes and other sources fell 8%, and the IFPI believes that the rise of smartphones and a
need-it-now attitude among listeners is largely what’s driving the push toward quality streaming
services” (Snader, 2015).
“The number of stream equivalent albums, on services such as Spotify, has increased
year-on-year by almost 80 per cent” (Willgress, 2015).  This data compared 6 months of time
between January and June of 2014. While album sales
were down almost 4% during this timeframe, total music
consumption increased 4% (from 52 million digital
listeners to 55 million listeners).  "The most-streamed
track of the year to date is Mark Ronson’s Uptown Funk,
which has been streamed 45 million times so
far” (Willgress, 2015).  Streaming was also boosted by
the release of Sam Smith’s new album, “In the Lonely
House,” and Ed Sheeran’s album, “X.”  “YouTube figures are not included in the data, but views
are up 98.2% at 12.5 billion in comparison with the 6 month equivalent period last
year” (Willgress, 2015).  
According to Kevin Brown, who is in label relations for Spotify in Europe, “'It should come
as no surprise to learn that more people than ever before are enjoying, discovering and sharing
music through streaming services. Listening to music on Spotify is simple, easy and free, and
Source: dailymail.co.uk
Jamie Huggins IMC 613 — Week 9 5
helps music fans to discover a whole new world of music wherever and whenever they want
it” (Willgress, 2015). 
Subscription streaming services are also on the rise growth-wise.  "Revenues for
subscription services increased 39% in 2014 to $1.57 billion, including Spotify’s ad-free
premium service for about $10 per month and the new
streaming service Tidal (under music mogul Jay-Z’s
wing). Today, an estimated 41 million people pay for a
streaming service of some kind, up from 28 million
people in 2013” (Snader, 2015).  However, it is important
to note that a majority of consumers will still seek out the
most affordable streaming services possible. For instance, Spotify has 75 million active users,
but only 15 million of those pay for its subscription services (Snader, 2015). 
Brand Position
Launched in 2008, Spotify was created in Sweden, but expanded to the United States
later in mid-2011. Since then, Spotify has grown to be one of the most popular music streaming
services in the world. “As of June 2015,
the music streaming platform had 75
million active users worldwide, up from
50 million in November of the previous
year” (Number of Global, 2015). Spotify
is particularly popular with Facebook
users (used by 39 million active
Facebook users) and smartphone users (used by 15% of smartphone users).
Source: dailymail.co.uk
Source: statista.com
Jamie Huggins IMC 613 — Week 9 6
However, even with solid statistics, Spotify still ranks behind the top music streaming
competitors. According to the 2015 Infinite Dial report from Edison Research and Triton Digital,
Pandora leads the audio streaming
space with 34% of users polled stating
that they had used Pandora in the
last month. Furthermore, Pandora has
the highest brand awareness at 75%
(Peoples, 2015). iHeartRadio and
iTunes radio are other top contenders, with 11% users stating they had used the services in the
last month. However, iTunes ranks higher in brand awareness (72%), while iHeartRadio ranks
slightly lower in brand awareness (59%). Finally, comes Spotify with 10% of users stating they
had used their streaming services in the last month. Additionally, the brand only has a 41%
brand awareness ranking. "All streaming services are most popular with the youngest age
group: 54% listened to Pandora in the last month, 23% listened to Spotify and 20% listened to
iTunes Radio” (Peoples, 2015).  
Points-of-Parity (POP)
• Music Streaming Services: As previously stated, Pandora is the #1 music streaming
service — with 34% of users stating that they used the platform in the last month. Spotify
comes in 3rd, with 10% of users stating that they used the platform in the last month (Peoples,
2015). 
• Free and Paid Services: Both Spotify and Pandora offer free subscriptions to users (with
ads) and paid (ad-free) subscription based services to users.  Pandora’s service is $4.99 per
month, while Spotify’s is $9.99 per month. 
Source: tritondigital.com
Jamie Huggins IMC 613 — Week 9 7
• Apps: Both Pandora and Spotify offer desktop, mobile and web apps to their users.  However,
it is important to note that only Pandora One users (Pandora paid members) can access the
desktop app.  
• Radio: As mentioned previously, Pandora is a radio streaming service.  It is important to add
that Spotify also offers radio, but it is traditional style radio and not music recommendation
radio like Pandora offers.  
• Social Features: Pandora and Spotify both afford their users the ability to connect with
friends, share their favorite music, or recommend artists and playlists.  Pandora users have
the ability to share stations across Facebook and Twitter, while Spotify users
"have the ability to share individual songs, entire playlists, and even specific artists with any of
 their friends/followers on Facebook, Twitter, or Tumblr” (Stella, 2015). 
Points-of-Difference (POD)
• Library Size: While both streaming services have a library of music at their users’ dispense,
the size of the library differs greatly.  Pandora has a music library size of about 1,000,000
songs.  Spotify has approximately 30 million (Spotify vs Pandora, 2014). 
• Song Choice Freedom: Pandora is a radio streaming service that does not allow users to
choose specific songs they want to listen to.  Instead, they create radio stations based on their
music preferences.  Spotify listeners, on the other hand, can choose what songs they want to
listen to and when they want to play them (Spotify vs Pandora, 2014).
• Custom Playlist Creation: Spotify allows its users to create custom playlists that can be
shared on the platform and across social media. Other users can even edit these playlists if
the creator allows.  Pandora does not allow its users to create custom playlists.  Users are
only able to build their own playlists, which are really just radio stations, based on their favorite
music (Spotify vs Pandora, 2014). 
Jamie Huggins IMC 613 — Week 9 8
• Type of Streaming: As previously stated, Pandora is a radio streaming service.  Users visit
the site to create radio stations based on their favorite artists or music genres.  Pandora is
more about music discovery.  Spotify focuses more on customizable, streamable music.  It is
more about listening to and sharing music that users already know and love.
• User Demographics: "Nearly two-thirds of US Spotify users were between the ages of 13
and 29, with 18- to 24-year-olds accounting for the largest share. In comparison, 45% of
Pandora listeners were between 13 and 29, and 35- to 44-year-olds accounted for the largest
share of users” (Pandora Maintains, 2015). 
Target Audience
According to ComScore and Spotify representatives, “40% of all Spotify users in the
United States are between the ages of 18
and 24. Compared to the general
population, Spotify users are 26% more
likely to be a student, 20% more likely to
be a college student, and 3.75x more
likely to be a graduate
student” (Biernacki, 2013). The average Spotify user streams music for 107 minutes per day.
Allocation of Branding Resources
The digital music streaming industry is a growing market with challengers Pandora
launching in 2005 and Spotify launching in 2008. The mission of Spotify was simple. The
company sought to give people access to all of the music that they wanted in a completely legal
and accessible way (Spotify, 2011). Pandora’s mission was also similar; they sought to allow
their users to play only music that they loved (Pandora, 2015). Pandora accomplishes their
mission through their use of random, radio song discovery, while Spotify allows users to search
Source: engadget.com
Jamie Huggins IMC 613 — Week 9 9
and listen whatever specific songs and albums that they want. However, Spotify still severely
lags behind Pandora in the areas of brand awareness and user listening base. If Spotify hopes
to continue to grow and challenge Pandora in coming years, the brand must boost overall
awareness among its target audience and respond to their streaming wants and needs in order
to stay relevant.
Benefits Gained
Building brand awareness will allow Spotify to increase its market share and strengthen
any confused perceptions users may have about the brand. In turn, this will help grow and
strengthen Spotify’s existing user base. Spotify can use non-traditional advertising efforts to
help the brand increase listening loyalty and numbers by focusing on Spotify’s value (for both its
premium and free services) compared to competitor, Pandora. The expectation is to see
Spotify increase its market share to 14% and its overall brand awareness to 60% through these
branding and marketing activities. These proposed numbers will put the brand in a much better
position to contend with Pandora.
Competition
Spotify was chosen as the challenger brand because of its
immense potential and consecutive growth rate over the past few
years. In just 6 years, Spotify has evolved into a global
powerhouse “with more than 20 million paying subscribers and 75
million active users. That’s double the number of paying users
Spotify had in May 2014 when it hit the 10 million subscriber
mark” (Paul, 2015). Additionally, Spotify is working on branching
out its services beyond music to include podcast and radio. “The
world's largest media organizations have signed on with Spotify
Source: macworld.com
Jamie Huggins IMC 613 — Week 9 10
to contribute content, including ABC, BBC, NBC, TED, and Comedy Central” (McGarry, 2015).
Spotify is working with these partners to develop original content for users to watch and listen
to. “Some of the more interesting ventures include Amy Poehler's Smart Girls, which will create
a Dance Move of the Day video for the platform, and a show called Turntable, which features
musicians and chefs performing and eating together” (McGarry, 2015). Finally, Spotify has
shown ingenuity by recently adding a feature just for runners. Songs are matched to the
runner’s tempo and pace to create an engaging experience. These innovative efforts, coupled
with consistent growth, show that Spotify has the potential to compete with industry leaders, like
Pandora.
Pandora
Pandora is the current digital music streaming industry leader with a 34% market share.
Founded in 2005, the company has grown to “more than 200 million registered users in the
United States, Australia and New Zealand. This marked a huge increase from 22 million
registered users back in 2009. Of
those registered users, it was
estimated that in 2013, the company’s
number of paying subscribers reached
3.3 million, which suggests that the
majority of subscribers in 2013 still
preferred Pandora’s free streaming
service” (Statistics and Facts, 2015). However, it is important to note that Pandora’s leading
streaming status has come at a cost. In 2013, the company’s share of content acquisition costs
was considerable at 53.8% of their total revenue. “Yet the future holds some potential good
news as this share is expected to gradually decrease to 35.3% by 2021 (Statistics and Facts,
2015).
Source: statista.com
Jamie Huggins IMC 613 — Week 9 11
iHeartRadio
iHeartRadio is another top contender in the
digital streaming music industry. Launched in 2011,
the company has 11% of the market share and over
60 million registered users. “iHeartRadio’s app has
been downloaded 500 million times already but
without an active user number, it’s difficult to quantify
just how it stacks up to the competition. Unlike some of the other players in the space,
iHeartRadio doesn’t offer a paid service. Instead, it earns all of its money from ad
revenue” (Knight, 2015). Earlier this year, the company claimed that it is the fastest growing
digital streaming service, and it is even growing faster than Facebook. However, these claims
were not backed with publicly shared statistics.
iTunes Radio
The third competitor in the digital streaming music industry is iTunes Radio with a 11%
market share. Launched in 2013, the service has approximately 40 million users in the United
States and Australia (Kahn, 2014). “iTunes Radio was Apple's attempt to keep music lovers
inside the Apple ecosystem. If consumers were busy streaming music via sites like Pandora,
Apple figured it might as well offer its own streaming service in an attempt to funnel users
towards the ever-tantalizing ‘buy’ button” (Heisler, 2014). To date however, only 1-2% of users
have been clicking the “buy” button. “Overall music downloads have been declining upwards of
15%, according to several label executives. At the same time, Apple is finding that its influence
over labels is slipping as other streaming services gather momentum. One independent label
said that iTunes's share of the label's revenue has eroded from more than 70% in 2012 to about
50% today” (Heisler, 2015). At this time, Apple has no plans to turn the service into a
subscription-based platform.
Source: mashable.com
Jamie Huggins IMC 613 — Week 9 12
Spotify Brand Inventory
Service Offerings
Spotify offers its users both free and
premium service packages. The free service
allows any user to stream Spotify at no
personal cost. The premium service, on the
other hand, is $9.99 per month. It includes
additional features not offered on the free
service like ad free, unlimited skips, the ability to listen offline, the ability to play any track, and
high quality audio (Go Premium, 2015).
Additionally, Spotify recently announced that it will be adding even more features for
Spotify Premium users later this year. “Spotify is expanding well beyond streaming music,
adding TV shows and original video content, podcasts and radio shows, new discovery tools,
and an electronic jogging buddy to its mobile app” (Moynihan, 2015). These service
advancements allow Spotify to grow even closer to its goal of being one-stop entertainment OS
for their users’ smartphones, and they are the first step in making music-only or video-only
streaming services look limited in comparison. “According to Spotify, the new features will show
up in the iOS app first. Spotify did not specify when the new features would be available on
Android, but the company did say the video and podcast features are planned for their other app
platforms” (Moynihan, 2015).
Brand Elements
Name
Even though Spotify was originally started in Sweden, the name “Spotify” itself is not of
Swedish origin. It does not actually mean anything in Swedish (although Google Translate does
Source: spotify.com
Jamie Huggins IMC 613 — Week 9 13
attribute the word as being Swedish). “Instead, the company’s founders Daniel Ek and Martin
Lorentzon were sitting around one day trying to think of a name when one of the suggestions
was misheard as ‘Spotify’, which then sort of just stuck. When the duo realized there were no
Google results for the word and that the domains were available to register, they snapped them
up and the rest is history” (Woods, 2014).
Logo
Spotify has surprisingly undergone multiple logo changes in the past few years. One of
the earliest changes took place in early 2013 when Spotify debuted a redesigned logo with less
“bounce” to hopes to reach a wider audience and expand its services. The subscription
streaming service's former logo used playful, bubbly font, but the 2013 design seemed to show
a company that was taking itself a bit more seriously. The 2013 version was neater, used clean
lettering, and included a discrete icon” (Kastrenakes, 2013). Though this logo was less lively
than its predecessor, it did not mean that Spotify was settling down.
Earlier this year, Spotify redesigned its logo once again. Though this change was only a
slight color change, the brand originally received user backlash on its color choice.
Spotify responded to users by saying that their old “broccoli-green” logo was in need of an
upgrade, so that is why the color was changed.  They stated, “As much as we got used to the
old broccoli green, we felt that the dreary brand palette was desperate for an upgrade. It was
time to give it a little refresh and make sure it goes well with our vibrant new color palette. The
Source: vulture.com
Source: theverge.com
Jamie Huggins IMC 613 — Week 9 14
new green has a little more pop and just feels right at home in our new color palette, which has
has grown to nearly three dozen colors. It not only looks more fresh and modern but also feels
feels more easy on the eye, especially when applying it fullscreen” (Shontell, 2015). 
URL
https://www.spotify.com/
The brand has its original website (link shared above) currently available for 64 different
countries ranging from the United States to Uruguay to Chile.
Slogan
“The Right Music for Every Moment.”
Brand Associations
Memorability
  “A necessary condition for building brand equity is achieving a high level of brand
awareness” (Keller, 2013, p.115). Spotify is one of the most popular digital music streaming
services in the world. It is available in 64 different countries and has 75 million active users.
This makes the brand inherently recognizable and memorable, which aids in overall popularity
and future growth. Spotify has successfully positioned itself in the brand marketplace, so that it
can be easily recalled by customers.
Meaningfulness
Spotify is well-known for its use of the color green. From a brand meaning perspective,
green is the color of balance, harmony, and growth. “It renews and restores depleted energy. It
is the sanctuary away from the stresses of modern living, restoring people back to a sense of
well being” (The Color Green, 2015). Spotify states that “Spotify Green” is the brand’s “hero”
color. It clearly signifies the presence of Spotify in people’s lives and helps users immediately
identify the brand (Brand Identity Guidelines, 2013).
Likability
Jamie Huggins IMC 613 — Week 9 15
To make sure Spotify’s brand identity delivers the right music for every moment, the
brand follows three important principles: easy, personal, and fun. These foundational
principles help build a likable and engaging user experience around the brand.
Transferability
Because Spotify is a global brand, its brand elements must be able to transfer through
different cultures. Spotify is quickly becoming a widely recognized brand, and its symbol and
logo are easily transferable within its different service categories across geographic regions and
cultures. However, Spotify’s slogan, “The Right Music for Every Moment,” is less transferable,
due to the brands’ recent announcement for additional services like TV, podcasts, video content,
and radio shows. The current slogan severely limits the brand to only music and may cause
confusion (if Spotify truly becomes more than music) as it enters into new markets.
Adaptability
As previously mentioned, Spotify has adapted its logo over the years to aid in consumer
usage and popularity. To remain contemporary and relevant to its target market, Spotify has
embraced change in different logo forms. Below are some images of the evolution of the
Spotify logo as it has changed over time (the 1st logo is the original, the 2nd change took place
in 2013, and the 3rd change took place in 2015):
Protectability
Spotify’s brand is legally protected from any unauthorized use. It’s logo and brand name
cannot be used by another company, nor can another company copy Spotify’s brand name or
logo. According to Spotify’s website, “all Spotify trademarks, service marks, trade names, logos,
Source: scottbriscoe.com Source: newslangmedia.com Source: vulture.com
Jamie Huggins IMC 613 — Week 9 16
domain names, and any other features of the Spotify brand (‘Spotify Brand Features’) are the
sole property of Spotify or its licensors. The Agreements do not grant users any rights to use
any Spotify Brand Features whether for commercial or non-commercial use” (Terms and
Conditions of Use, 2015).
Company Perceptions
Brand Imagery
Spotify claims that imagery is one of the brand’s most important assets. Spotify focuses
on imagery that is candid and real, macro and micro, has place and personality, and
contains the presence of music.
• Candid and real: Spotify seeks to capture and promote
images that are real and authentic. They love candid
shots of real people, interacting with each other and the
world (Brand Identity Guidelines, 2013).
• Macro and micro: “Everything is relative. The simplest
moments can often mean the most” (Brand Identity
Guidelines, 2013). This is why Spotify’s imagery style
covers a wide spectrum. “From scrambling eggs for
breakfast to choosing the next leader of the free world,
all moments can be made better with music” (Brand
Identity Guidelines, 2013).
• Place and Personality: Spotify’s taste in music is as
individual and original as the brand itself. Because of
this, Spotify’s image style portrays a wide range of
people and personalities enjoying music enjoying
Source: issuu.com
Source: issuu.com
Source: issuu.com
Jamie Huggins IMC 613 — Week 9 17
music in a variety of recognizable places (Brand Identity Guidelines 2013).
• Presence of Music: “The strongest moments for
Spotify are those associated with music. That is why it
is important for the brand to show how their users are
enjoying music — to make a connection” (Brand
Identity Guidelines, 2013).
Brand Performance
Spotify has been extremely happy with the brand’s performance to date. Jonathan
Forster, who runs Spotify’s European operations, recently stated that Spotify intends to keep its
position as a top music player, and “it is enough to be among the top three” in a larger market.
This statement was made on the heels of “a $526 million funding round that values the Swedish
company at $8.53 billion and revealed that it now has 75 million active users, of whom 20 million
are paying customers – up from 40 million and 10 million just over a year ago” (Davidson,
2015). While the company still lags in market share (10%) behind Pandora (34%), iHeartRadio
(11%), and iTunes Radio (11%), Forster still thinks there is plenty of room for the brand to grow.
Brand Personality
As previously stated, Spotify seeks to portray its brand personality as easy, personal,
and fun.
• Easy: “Spotify is effortless and intuitive” (Brand Identity Guidelines, 2013). Easy is effortlessly
being able to join the brand, talk to the brand, and use the service.
• Personal: “Spotify is friendly, informal, and relevant” (Brand Identity Guidelines, 2013).
Personal is illustrated through the right music at the right time on users’ terms.
• Fun: “Spotify is playful, with a hint of irreverence” (Brand Identity Guidelines, 2013). Fun is
illustrated through music itself.
Feelings
Source: issuu.com
Jamie Huggins IMC 613 — Week 9 18
“Brand feelings are customers’ emotional responses and reactions to the brand” (Keller,
2013, p.90). Spotify portrays itself as an easy, personal, and fun brand in order to deeply
connect with its target audience worldwide. “The goal of their brand identity is to create a look
and personality that signals to the brand’s core audience of Millennials that Spotify is as rich and
lively as the music culture it fronted, rather than simply a technology service that served up
songs” (Tischler, 2015).
Judgements
“Brand judgements are customers’ personal opinions about and evaluations of the
brand, which consumers form by putting together all different brand performance and imagery
associations” (Keller, 2013, p. 89). Spotify distinguishes itself from competitors “by offering
unique benefits that other companies don’t offer, such as the ability to access specific artists
through a flat subscription fee” (Ganot, 2015). Furthermore, Spotify seeks to differentiate itself
by making its brand more than music and offering video, podcast, radio, etc. They believe that
an innovative mindset can ultimately affect consumers’ attitudes about their brand.
Marketing Support Programs
“Spotify’s growth has been a more modest approach relying on word-of-mouth, PR and
co-marketing rather than big ad budgets. When the service went live in October 2008, it kept its
free service invitation only, something that had
been in place whilst it was in the final stages of
development prior to public launch. By
introducing scarcity, the invitation-only element
was a vital part of the platform’s rise. It helped
create a viral element to the service, with users each having 5 invites at first to share with their
friends. Similarly, the launch of Spotify in the US used private ‘Beta’ invites to create a buzz as
Source: news.spotify.com
Jamie Huggins IMC 613 — Week 9 19
those with access shared their use of it in social media (and through word-of-mouth)” (Chaffey,
2015).
Today, Spotify additionally relies on a mix of social media, co-marketing and
partnerships, and campaigns to improve its reach and visibility. “Spotify adopts a traditional
approach to managing its own social media feeds” (Playing the Social Tune, 2013). Spotify
states that both Facebook and Twitter provide
them with platforms to promote their new
artists and albums, talk about new Spotify
features, and get valuable feedback to
improve their services. “In addition, Spotify
tries to drive social media users to its premium service by promoting on Facebook and Twitter
before releases unique content and competitions that only premium Spotify users can
access” (Playing the Social Tune, 2013). Spotify’s Facebook page currently has over 7,800,000
“likes”, and their Twitter profile has over 1.51 million followers. “Spotify's innovations in social
media are driven by the belief that music is social” (Playing the Social Tune, 2013).
Furthermore, Spotify has used co-marketing and partnerships to increase its reach by
embedding different widgets on other websites. “For example Drowned In Sound has a monthly
playlist which it embeds within its blog which encourages its readers to engage with Spotify. A
music magazine like NME offers apps with a range of playlists which again will generate
awareness and engagement. Other partnership services enable Festivals and Charities to
engage their audience through Spotify playlists” (Chaffey, 2015). Finally, Spotify has begun to
invest in campaigns. In 2013, the brand launched a multi-platform campaign with a 30 second
ad-spot during the premiere of NBC’s “The Voice.” Sixty-second versions of the ad also
appeared during the “Tonight Show with Jay Leno” and “Late Night With Jimmy Fallon. “In
2014, Spotify launched a 'Music takes You Back' ad. It centered around three videos which
Source: sproutsocial.com
Jamie Huggins IMC 613 — Week 9 20
showcases three different people’s stories through the medium of Spotify, Facebook, text
messages, Skype and Instagram. Its aim was to show how Spotify can bring people together
through its integration with social media. Spotify decided not to use TV creating 75 to 90 second
videos rather than the typical 30 second TV ad break slots” (Chaffey, 2015).
Competitive Environment
Spotify has grown to be one of the most popular music streaming services in the world.
“As of June 2015, the music streaming platform had 75 million active users worldwide” (Number
of Global, 2015). Spotify is particularly popular with Facebook users (used by 39 million active
Facebook users) and smartphone users (used by 15% of smartphone users).
However, even with solid statistics, Spotify still ranks behind the top music streaming
competitors. According to the 2015 Infinite Dial
report from Edison Research and Triton Digital,
Pandora leads the audio streaming space,
followed by iHeartRadio and iTunes Radio.
Spotify ranks 3rd, with 10% of users stating
they had used their streaming services in the last month.
Pandora
Pandora is the current digital music streaming industry leader with a 34% market share.
Founded in 2005, the company has grown to “more than 200 million registered users in the
United States, Australia and New Zealand. This marked a huge increase from 22 million
registered users back in 2009. Of those registered users, it was estimated that in 2013, the
company’s number of paying subscribers reached 3.3 million, which suggests that the majority
of subscribers in 2013 still preferred Pandora’s free streaming service” (Statistics and Facts,
2015). However, it is important to note that Pandora’s leading streaming status has come at a
cost. In 2013, the company’s share of content acquisition costs was considerable at 53.8% of
Source: tritondigital.com
Jamie Huggins IMC 613 — Week 9 21
their total revenue. “Yet the future holds some potential good news as this share is expected to
gradually decrease to 35.3% by 2021 (Statistics and Facts, 2015).
iHeartRadio
iHeartRadio is another top contender in the digital streaming music industry. Launched
in 2011, the company has 11% of the market share and over 60 million registered
users.“iHeartRadio’s app has been downloaded 500 million times already but without an active
user number, it’s difficult to quantify just how it stacks up to the competition. Unlike some of the
other players in the space, iHeartRadio doesn’t offer a paid service. Instead, it earns all of its
money from ad revenue” (Knight, 2015). Earlier this year, the company claimed that it is the
fastest growing digital streaming service, and it is even growing faster than Facebook.
iTunes Radio
The third competitor in the digital streaming music industry is iTunes Radio with a 11%
market share. Launched in 2013, the service has approximately 40 million users in the United
States and Australia (Kahn, 2014). “iTunes Radio was Apple's attempt to keep music lovers
inside the Apple ecosystem. If consumers were busy streaming music via sites like Pandora,
Apple figured it might as well offer its own streaming service in an attempt to funnel users
towards the ever-tantalizing ‘buy’ button” (Heisler, 2014). To date however, only 1-2% of users
have been clicking the “buy” button. “Overall music downloads have been declining upwards of
15%, according to several label executives” (Heisler, 2015).
Jamie Huggins IMC 613 — Week 9 22
Points-of-Parity (POP) and Points-of-Difference (POD)
Brand Hierarchy
Spotify currently offers one type of service to users, but the brand has three additional
service offerings coming soon. Right now, Spotify offers both free and premium music services
to its users. Free services are available to anyone, and users can stream music in a shuffle
Spotify Pandora iHeartRadio iTunes Radio
POP - #1 Music
Streaming
Service: 35%
market share
- Free and Paid
Services: $9.99/
month
- Apps: Desktop,
mobile, & web
- Radio
- Social Features:
ability to share
songs, entire
playlists, & specific
artists with friends/
followers on social
media
- #2 Music
Streaming
Service: 11%
market share
- Free and Paid
Services: $4.99/
month
- Apps: Desktop,
mobile, & web
- Radio
- Social Features:
ability to share
stations on social
media
- #2 Music
Streaming
Service (11%
market share)
- Free Service (no
paid option)
- Apps: Desktop,
mobile, & web
- Radio
- Social Features:
ability to share
songs on social
media and view
songs that friends
have recently
listened to or liked
- #3 Music
Streaming
Service (10%
market share)
- Free and Paid
Services: $4.99
per month
- Apps: Desktop,
mobile, & web
- Radio
- Social Features:
ability to share
stations to social
media
POD - Library Size: 30
million songs
- Custom
Playlists:
allows users to
create custom
playlists
- Song Choice
Freedom: Yes
- Type of
Streaming:
customizable,
streamable music
- Library Size: 1
million songs
- Custom
Playlists: allows
users to create
custom radio
stations
- Song Choice
Freedom: No
- Type of
Streaming: radio/
music discovery
- Library Size:
900,000 songs
- Custom
Playlists: allows
users to create
custom radio
stations
- Song Choice
Freedom: No
- Type of
Streaming: radio/
music discovery
- Library Size: 27
million songs
- Custom
Playlists: allows
users to customize
radio stations
- Song Choice
Freedom: No
- Type of
Streaming: radio/
music discovery
Jamie Huggins IMC 613 — Week 9 23
play mode. Premium services costs $9.99 per month and include shuffle play, as well as, ad
free listening, unlimited skips, the ability to listen offline, the ability to play any track, and high
audio quality. Proposed later this year are TV, video, radio, and podcast services. “The world's
largest media organizations have signed on with Spotify to contribute content, including ABC,
BBC, NBC, TED, and Comedy Central” (McGarry, 2015). Spotify is working with these partners
to develop original content for users to watch and listen to. Finally, Spotify has shown ingenuity
by recently adding a feature just for runners. Songs are matched to the runner’s tempo and
pace to create an engaging experience.


Spotify
Services
Music TV & Video Radio &
Podcasts
Running
Free Premium Coming
Soon
Coming
Soon
Coming
Soon
Jamie Huggins IMC 613 — Week 9 24
Spotify Brand Exploratory
Service Offerings (Consumer Perspective)
Spotify offers its users both free and premium service packages. The free service allows
any user to stream Spotify at no personal cost. The premium service, on the other hand, is
$9.99 per month. It includes additional features not offered on the free service like ad free,
unlimited skips, the ability to listen offline, the ability to play any track, and high quality audio
(Go Premium, 2015). So, what do consumers’ think about these services?
Since Spotify is not a product, finding specific user reviews on their services is a bit
difficult. However, Spotify does have plenty of reviews on tech-blogs ranging from CNET to
TechRadar to PCMag.
• TechRadar gives the entire brand 5 out of 5 stars. Specific top highlights of Spotify’s
services include: a great new look, awesome music, excellent service features, 320 kpbs
streaming, and exclusive content. Their negatives included a clunky web player and a
poorly designed search feature (Rivington, 2015).
• CNET gives the brand an 8.9 out of 10. Positive aspects about the brand included a fresh,
clean design that goes beyond streaming music with videos, podcasts and extra features.
Additionally, it has a massive collection of community-driven playlists where users can find
great music for any mood,
activity or holiday. The free,
ad-supported version offers a
good introduction to the
service with no time limit” (Mitroff, 2012). Some negatives about the brand included difficulty
combining personal music files with Spotify’s catalogue, and the fact that without a premium
account, users cannot listen offline or pick any song they want to hear.
Source: cnet.com
Jamie Huggins IMC 613 — Week 9 25
• PCMag gives the Spotify brand 4.5 out of 5 stars. PCMag states that while Spotify’s offers
both free and premium services, they believe that premium price tag of $9.99 per month is
worth it. They state, “Spotify Premium lets you hear albums before they're released,
cache songs for offline playback on your computer, phone, or other devices. It also
increases audio quality to 320Kbps. Feature and quality-wise, Premium is worth the extra
bucks” (Wilson, 2015).
Brand Associations (Consumer Perspective)
Memorability
Spotify is one of the most popular digital streaming services in the world and has 75
million active users. Even with that strong user base, when compared to Pandora, iHeartRadio,
and iTunes Radio, it lacks significantly in brand awareness and brand usage ratings. Pandora
has the highest brand awareness level (75%) and monthly usage rate (45%). “iHeartRadio
ranks third in brand awareness (59%) and second in usage (17%). iTunes Radio climbed to
second in brand awareness (72%) and ranks third in brand usage (16%). Spotify brand
awareness ranks behind two laggards (41%) but ranks fourth in brand usage (13%) and has by
far the best numbers of an on-demand subscription service” (Peoples, 2015).
Meaningfulness
While Spotify is well-known for its
color green, the color itself has had mixed
responses as of late. A few months ago,
"Spotify changed the color of its logo to a
brighter forest green instead of the lime
green that it had before” (Shontell, 2015).
 This was done to better attract a younger,
millennial audience and give the brand a more modern, fresh look that resonated with
Source: businessinsider.com
Jamie Huggins IMC 613 — Week 9 26
consumers. However, Spotify did not warn their users of the change, and because of this, many
were initially upset over the color shift. Today, it does appear that much of the initial backlash
has dissipated, and users have adjusted to the color change.
Likability
According to tech-blog reviews, which were previously mentioned, Spotify’s overall
brand likability score is high. These popular tech-blogs (ranging from CNET to PCMag to
TechRadar) have given the brand high ratings across the board, and they praise the brand on its
ease of installation and setup, integrated features and support, useable interface, and overall
performance.
Transferability
Spotify is quickly becoming a widely recognized brand, and it is currently available in 64
different countries. Spotify’s symbol and logo are easily transferable within its different service
categories across geographic regions and cultures. To date, there have not been any reports of
confusion about the brand or its elements internationally.
Adaptability
Spotify has adapted its logo over the years to aid in consumer usage and popularity. To
remain contemporary and relevant to its target market, Spotify has embraced change in different
logo forms. As previously mentioned, Spotify’s most recent logo change created a swarm of
backlash from consumers, because they did not like the new color of green the brand adopted.
However, this seems to have passed, and users are adjusting to the color change.
Protectability
Source: theverge.com
Jamie Huggins IMC 613 — Week 9 27
Spotify’s brand is legally protected from any unauthorized use. According to Spotify’s
website, “all Spotify trademarks, service marks, trade names, logos, domain names, and any
other features of the Spotify brand (‘Spotify Brand Features’) are the sole property of Spotify or
its licensors. The Agreements do not grant users any rights to use any Spotify Brand Features
whether for commercial or non-commercial use” (Terms and Conditions of Use, 2015). Upon
signing up to use Spotify, all users must agree to these terms and conditions of use.
Company Perceptions (Consumer Perspective)
Brand Imagery
To better reach its core user audience of
millennials, Spotify recently sought “to create a
look that would signal to the brand’s core
audience of millennials that Spotify was as rich
and lively as the music culture it fronted, rather
than simply a technology service that served up
songs” (Tischler, 2015). Spotify’s new look centered around two millennial traits: they are highly
visual and they want to be involved in co-creation. Spotify’s design agency, Collins, greatly
expanded their previous limited color palette (white, black, and green) to include duotone colors
and a series of bursting shapes. “As a millennial himself, Collins co-founder Leland
Maschmayer looks at his contemporaries as being defined by their energy and a desire to
become ‘co-creators’ – to get involved with the Spotify experience on more than just a User
Interface level” (Wilkes, 2015). While it is still too early to see how these changes affect
Spotify’s bottom line, it seems safe to say that most users agree that these imagery changes
were much needed.
Brand Performance
Source: fastcodesign.com
Jamie Huggins IMC 613 — Week 9 28
As previously stated, Spotify’s brand and overall performance consistently receive high
ratings across popular tech-blogs. For example, TechRadar recently stated, “Spotify is still the
undisputed king of streaming, and its reign doesn't look like ending soon with these recent
updates. The new look and the new features take what was already a brilliant service and add
the level of polish and comprehensiveness to make it a five-star product” (Rivington, 2015).
CNET similarly stated that “the competition in the on-demand streaming music category is
increasingly fierce, as the market transitions from techie early adopters to the broader mass
market that is still focused on buying digital singles and albums via iTunes and Amazon. But
while the likes of Rdio, Rhapsody and the newly minted Apple Music try to stake their claim,
Spotify's superior feature set keeps it ahead of the pack” (Mitroff, 2012).
Brand Personality
Spotify has repeatedly stated
that it wants its users to perceive the
brand as easy, personal, and fun
(Brand Identity Guidelines, 2013). In a
recent survey, MediaZ found that
Spotify’s “highest-ranking qualities
include creative and fun, which both
achieved percentages of 53% in the
most recent assessment. This
consistency demonstrates Spotify’s clear brand positioning over the past few years with
consumers clearly understanding the brand and its proposition” (Spotify: The Race, 2014).
Feelings
Spotify portrays itself as an easy, personal, and fun brand in order to deeply connect
with its target audience of millennials worldwide. “The goal of their brand identity is to create a
Source: mecink.com
Jamie Huggins IMC 613 — Week 9 29
look and personality that signals to the brand’s core audience of millennials that Spotify is as
rich and lively as the music culture it fronted, rather than simply a technology service that served
up songs” (Tischler, 2015). As seen from the graph above, Spotify users rank the brand high in
the areas of creativity and fun (53%). These positive emotional responses and perceptions from
Spotify’s users are integral in the brand’s longterm success.
Judgements
Spotify seeks to distinguish itself from competitors “by offering unique benefits that other
companies don’t offer, such as the ability to access specific artists through a flat subscription
fee” (Ganot, 2015). Furthermore, they seek to differentiate itself by making their brand more
than music by offering video, podcast, radio, etc. They believe that an innovative mindset can
ultimately affect consumers’ attitudes about their brand. While Spotify receives mostly positive
reviews and ratings, it is important to note that the brand’s overall usage rates and brand
awareness scores are still relatively low compared to Pandora, iHeartRadio, and iTunes Radio.
Spotify has recently unveiled multiple changes and expansions to their imagery and services, so
time will tell if they will help eventually bridge disconnect issues facing the brand.
Marketing Support Programs (Consumer Perspective)
Spotify relies on social media campaigns to improve its reach and visibility with its target
audience. Spotify states that both Facebook and Twitter provide them with platforms to promote
their new artists and albums, talk about new Spotify features, and get valuable feedback to
improve their services. Spotify’s Facebook page currently has over 7,800,000 “likes”, their
Twitter profile has over 1.51 million followers, and their Instagram account has over 248,000
followers. “Spotify's innovations in social media are driven by the belief that music is
social” (Playing the Social Tune, 2013). Additionally, Spotify recently raised its commercial
game, and one of its latest advancements rolled out video ads in late 2014. These
advancements allowed free Spotify users to watch a video ad in exchange for 30 minutes of ad-
Jamie Huggins IMC 613 — Week 9 30
free streaming. These ads were tested in Q4 with brands including McDonald’s, Coca-Cola,
Ford and Universal Pictures. “In February 2014, Spotify also entered into a partnership with
News UK, through which new annual subscribers to The Times and Sunday Times’ Digital and
Ultimate Packs received a year’s free Spotify Premium subscription. Interestingly enough,
MediaZ data shows that 28% of respondents didn’t know much about Spotify or have never
heard of it – a significant volume of people compared to the average digital property score of
16%, so, despite huge numbers of monthly users, there is still room to increase brand
awareness and capitalize on consumers’ love of digital” (Spotify: The Race, 2014).
Competitive Environment (Consumer Perspective)
Pandora
Pandora is the current digital music streaming industry leader with a 34% market share.
The company has grown to “more than 200 million registered users in the United States,
Australia and New Zealand. Of those registered users, it was estimated that in 2013, the
company’s number of paying subscribers reached 3.3 million, which suggests that the majority
of subscribers in 2013 still preferred
Pandora’s free streaming
service” (Statistics and Facts, 2015).
Additionally, Pandora has the highest
brand awareness (75%) and the highest
monthly usage (45%). Pandora’s user
base consists mostly of a younger
audience (54%) who listened to the
service in the past month. Concerning older demographics, 12% of the 55+ age group listened
to Pandora in the past month (Peoples, 2015). Finally, Pandora drives consumer loyalty better
than any other online music service. “According to a recent study by IFPI, Pandora is the
Source: fool.com
Jamie Huggins IMC 613 — Week 9 31
number one station in 14 of the top 15 local radio markets in the United States” (Guarente,
2014).
iHeartRadio
iHeartRadio has 11% of the market share and over 60 million registered users. To date,
iHeartRadio’s app has been downloaded at least 500 million times (Knight, 2015). “iHeartRadio
ranks third in brand awareness (59%) and second in usage (17%)” (Peoples, 2015).
Additionally, their user base mainly consists of 25-34 year olds. According to the above study
completed by IFPI, iHeartRadio actually did not place on the top 8 music streaming companies
for loyalty among users.
iTunes Radio
iTunes Radio has a 11% market share, and the service has approximately 40 million
users in the United States and Australia (Kahn, 2014). “iTunes Radio climbed to second in
brand awareness (72%) in fewer than two years and ranks third in brand usage
(16%)” (Peoples, 2015). iTunes Radio user bases consists of a mostly younger audience (20%)
who listened to iTunes Radio in the past month. Concerning other demographics, of people
aged 25 to 54, 12% listened to iTunes Radio in the past month (Peoples, 2015). Concerning
consumer loyalty, 92% of iTunes Radio users listen to Pandora. “The report, from investment
bank Canaccord Genuity, indicates that while iTunes Radio compares favorably to Pandora's
offering in fit and finish, the service lags behind in overall consumer perception thanks to poorer
automated song selection. When asked to quantify the "overall experience" of both services,
66% of respondents call their experience with iTunes Radio ‘positive’ or ‘very positive,’ while
Pandora scores 78% on the same metric. Apple wins with tight margins on app usability
questions, but loses out to Pandora in perhaps the most important metric, ‘Plays songs I want to
hear,’ 63% to 72%” (Cole, 2013).
Target Market
Jamie Huggins IMC 613 — Week 9 32
Millennials
“According to ComScore and Spotify
representatives, 40% of all Spotify users in
the United States are between the ages of 18
and 24. Compared to the general population,
Spotify users are 26% more likely to be a
student, 20% more likely to be a college
student, and 3.75x more likely to be a graduate student. The average Spotify listening session
averages 107 minutes per day” (Biernacki, 2013).
Perceptual Map
In reviews about Spotify, these were some of the top words and concepts associated
with the brand. Spotify seeks to position itself as easy, fun, and personal, and it appears that
many of these terms exemplify those sought-after qualities.
Source: variety.com
FUN
GREAT
LOOK
CREATIVE
GREAT
SERVICE
FEATURES
SPOTIFYAWESOME
MUSIC
EXCLUSIVE
CONTENT
FAST
STREAMING FRIENDLY
Jamie Huggins IMC 613 — Week 9 33
Classmate Survey
During this session, 5 questions were asked to a total of 10 respondents. 6 of the
respondents were female and 4 of the respondents were male.
Q1: When streaming digital music, what are the top streaming services you use? Please list in
the order from most to least used.  If you do not stream music digitally, share why. 
Responses:
From these results, it is visibly seen that Pandora is the leader in most popular
streaming service — 5 of 10 respondents or 50% chose Pandora as their top streaming service.
Spotify tied for second with Sirius XM, with 2 respondents saying that it was their top music
0
1.25
2.5
3.75
5
Pandora Spotify Sirius XM iHeartRadio Amazon Prime iTunes Jango
Listed 1st Listed 2nd or later
Jamie Huggins IMC 613 — Week 9 34
streaming choice. For overall responses, Pandora was the leader once again — 8 respondents
out of 10 listen to Pandora. Spotify placed second with 4 respondents saying they used the
service.
Q2: What attributes are unique to Spotify that would make you use it over Pandora or
iHeartRadio?

Responses:
From these results, one of Spotify’s main issues can be seen — brand awareness. 36%
of respondents were unfamiliar with the brand’s attributes. This is reflective of previous
statistics mentioned that other users had a lack of knowledge concerning awareness about the
brand in comparison to its competitors. Those that were familiar with Spotify, ranked its top
attributes building and sharing playlists, the ability for song choice, and that it offers free
services. A small number of respondents favored the program’s layout and user-friendly
interface.
Q3: List one or two things that might keep you from using Spotify to stream music over its
competitors. 
Responses:
14%
7%
7%
14%
21%
36%
Unfamiliar Playlists Song Choice User Friendly
Layout Free
Jamie Huggins IMC 613 — Week 9 35
From these results, it is apparent that the main fear associated with Spotify is cost.
Respondents claimed that they either feared a cost increase or a mandatory subscription fee
being forced upon users. Once again, brand awareness was an issue here — 18% of
responders stated that they were unfamiliar with the brand and had a lack of knowledge about
the Spotify brand. Other concerns raised were library reduction and Apple integration. Only
one user stated that he had no concerns about the brand.
Q4: Which of the following age groups do you fall under? (Optional)
9%
18%
9%
9%
55%
Cost Library Reduction Prefer Apple
Unfamiliar Nothing
11%
22%
67%
25-34 35-45 18-24
Jamie Huggins IMC 613 — Week 9 36
From these results, it can be seen that the majority of the respondents (1 elected not to
answer this question), were between the ages of 25-34. This falls in line with Spotify’s main
target audience of millennial users. 22% of respondents were between the ages of 35-45, and
11% of respondents were between the ages of 18-24.
Q5: Do you most often stream music from a desktop/laptop or a smartphone mobile app?  If you
do not digitally stream music, write N/A. (Optional)
Responses:
	 From these results, it is noted that the majority of respondents (6 in total) stream music
from their desktop/laptop computers, which is quite surprising given the popularity of
smartphones. Only 3 respondents stated that they stream most often from their smartphones,
while 1 respondent stated that he streamed most often from his personal tablet. 

Recommendations
Overall, Spotify’s brand elements are cohesive, consistent, and aesthetically pleasing.
However, Spotify’s marketing efforts have fallen short in the areas of brand awareness and
overall market share. If Spotify truly seeks to increase its market share to 14% and its overall
Tablet
Smartphone
Desktop/Laptop
0 1.5 3 4.5 6
Region 1
Jamie Huggins IMC 613 — Week 9 37
brand awareness to 60%, it will have to consider the following brand recommendations to better
appeal to its Millennial audience.
Goals
To increase Spotify’s market share and brand awareness to improve overall brand equity.
Objective
Increase Spotify’s market share to 14% in a 12 month period.
• Strategy #1: Increase Spotify’s free user base through promoting activities that drive
conversions.
• Tactics: From the survey results above, the #1 fear of Millennials centered around
cost — either that Spotify cost or would require its free users to eventually pay for the
service. Therefore, it is recommended that Spotify begin to aggressively promote
activities that drive those free conversions. “For example, if Spotify user data
suggests that when a Facebook friend sends a non-user a playlist, that non-user is
5x more likely to download Spotify, it needs to begin strategically encouraging that
behavior and reducing the friction for that behavior, whether it is through e-mail
marketing, new notifications, or better feature design — whichever method depends
on what works best based on A/B testing and experimentation” (Young, 2015).
• Strategy #2: Lock in more paid consumers through the use of internal analytics.
• Tactics: Currently, Spotify has one of the leading free-to-paid user conversion rates
of any digital music streaming service in the industry. However, if it seeks to grow
and defend its market share, the brand must continue to lock in paid customers
quickly. “Spotify needs to conduct a cohort analysis to segment users by behavior
and develop ways to incentivize actions that lead to conversions through more
personalized e-mail marketing, notifications, or promotional programs. Maybe all it
Jamie Huggins IMC 613 — Week 9 38
takes to convert a non-paying Spotify user is adding a feature where Spotify
automatically creates playlists for users based on what they listen to, or a notification
reminder that gets users to download playlists to their phone for offline listening. Find
the ‘A-Ha’ moments - or the behaviors that dramatically increase switching costs for
users - and structure the Spotify experience around encouraging those
activities” (Young, 2015).
Objective
Increase overall brand awareness by 60% in a 12 month period.
• Strategy: Raise brand awareness among American Millennials by creating more multi-
platform advertising campaigns.
• Tactics: Like the brand did previously with The Voice, it is recommended that Spotify
continue to launch multi-platform advertising campaigns with 30 second TV spots
during episodes of popular Millennial television shows. While it is important that
Spotify continues to advertise during The Voice, they could easily expand to other
talent shows like American Idol. Additionally, since Spotify is seeking to expand its
brand to “more than music,” it is recommended that they extend their advertisements
beyond music shows as well. Some of the most popular Millennial television shows
include: Empire, Scandal, The Big Bang Theory, Family Guy, The Simpsons, and How
to Get Away With Murder (Consoli, 2015). Each of these shows averages millions of
views per episode in the Millennial demographic, and this viewership could greatly
increase brand awareness. The advertisements could also be featured on Spotify’s
YouTube channel, website, app, and social media channels for a more integrated feel.
Jamie Huggins IMC 613 — Week 9 39
References
About Pandora (2015). Pandora. Retrieved September 21, 2015, from https://
www.pandora.com/about
Biernacki, S. (2013, October 14). PANDORA AND SPOTIFY: WHAT ADVERTISERS NEED TO
KNOW. Educational Marketing Group. Retrieved September 21, 2015, from http://
emgonline.com/blog/2013/10/pandora-and-spotify-what-advertisers-need-to-know/
Brand Identity Guidelines. (2013). ISSUU. Retrieved September 28, 2015, from http://issuu.com/
bondo/docs/spo_brandidentityguidelines_final
Chaffey, D. (2015, March 30). Spotify Case Study. Smart Insights. Retrieved September 28,
2015, from http://www.smartinsights.com/digital-marketing-strategy/online-business-
revenue-models/spotify-case-study/
Cole, S. (2013, October 28). 92% of iTunes Radio listeners still use Pandora, says new report.
Apple Insider. Retrieved October 5, 2015, from http://appleinsider.com/articles/
13/10/28/92-of-itunes-radio-listeners-still-use-pandora-says-new-report
Consoli, J. (2015, April 1). MBPT Spotlight: The 18 Shows You Should be Advertising In To
Reach Millennials. Broadcasting & Cable. Retrieved October 13, 2015, from http://
www.broadcastingcable.com/news/upfront-central/mbpt-spotlight-18-shows-you-should-
be-advertising-reach-millennials/139335
Davidson, L. (2015, June 28). Apple Music 'validates' our business, says Spotify exec.
Telegraph. Retrieved September 28, 2015, from http://www.telegraph.co.uk/finance/
newsbysector/mediatechnologyandtelecoms/11689459/Apple-Music-validates-our-
business-says-Spotify-exec.html
Ganot, R. (2015, January 18). MUSIC AND MONETIZATION: WHAT MARKETERS CAN
LEARN FROM SPOTIFY’S SUCCESS. CodeFuel. Retrieved September 28, 2015, from
http://www.codefuel.com/blog/music-monetization-marketers-can-learn-spotifys-success/
Jamie Huggins IMC 613 — Week 9 40
Guarente, M. (2014, September 11). Pandora’s Out of the Box, and on Top for Loyal Listening.
Loyalty360. Retrieved October 5, 2015, from http://loyalty360.org/resources/article/
pandoras-out-of-the-box-and-on-top-for-loyal-listening#sthash.8e6WeWAK.dpuf
Go Premium. (2015). Spotify. Retrieved September 28, 2015, from https://www.spotify.com/us/
purchase/panel/?country=US#__main-extended-creditcard
Heisler, Y. (2014, April 14). Billboard claims iTunes Radio isn't the hit Apple was hoping for.
enGadget. Retrieved September 21, 2015, from http://www.engadget.com/2014/04/14/
billboard-claims-itunes-radio-isnt-the-hit-apple-was-hoping-for/
Kahn, J. (2014, May 28). Eddy Cue: Apple passed 35 billions songs sold on iTunes last week,
40 million iTunes Radio listeners. 9to5Mac. Retrieved September 21, 2015, from http://
9to5mac.com/2014/05/28/eddy-cue-apple-passed-35-billions-songs-sold-on-itunes-last-
week-40-million-itunes-radio-listeners/
Kastrenakes, J. (2013, March 28). Spotify gets serious with a new, streamlined logo. The Verge.
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spotify-debuts-new-logo-serious-redesign
Keller, K. (2013). Strategic Brand Management: Building, Measuring, and Managing Brand
Equity. (4th ed.) (pp.89-90; 115). Upper Saddle River, NJ: Prentice Hall. 
Knight, S. (2015, January 23). iHeartRadio growth continues, passes 60 million
registered users. TechSpot. Retrieved September 21, 2015, from http://
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registered-user.html
Rivington, J. (2015). Spotify Review. TechRadar. Retrieved October 5, 2015, from http://
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review
Jamie Huggins IMC 613 — Week 9 41
McGarry, C. (2015, May 20). Spotify turns itself into entertainment 1-stop shop with videos and
podcasts. Macworld. Retrieved September 21, 2015, from http://www.macworld.com/
article/2924841/spotify-turns-itself-into-entertainment-1-stop-shop-with-videos-and-
podcasts.html
Mitroff, S. (2012, August 3). Spotify review: The best streaming music experience you can buy.
CNET. Retrieved October 5, 2015, from http://www.cnet.com/products/spotify/
Moynihan, T. (2015, May 20). Here Are All the New Features Packed Inside Spotify. Wired.
Retrieved September 28, 2015, from http://www.wired.com/2015/05/new-features-
packed-inside-spotify/
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Statista. Retrieved September 21, 2015, from http://www.statista.com/statistics/367739/
spotify-global-mau/
Pandora Maintains Strong Audience Lead Over Spotify. (2015, May 14). eMarketer. Retrieved
September 2, 2015 from http://www.emarketer.com/Article/Pandora-Maintains-
Strong-Audience-Lead-Over-Spotify/1012476#sthash.Fuu3qOpT.dpuf
Paul, I. (2015, June 10). Spotify shows off impressive growth ahead of Apple Music launch.
Macworld. Retrieved September 21, 2015, from http://www.macworld.com/article/
2934085/spotify-shows-off-impressive-growth-ahead-of-apple-music-launch.html
Peoples, G. (2015, March 5). New Report Looks at U.S. Streaming, Finds Pandora the Clear
Leader. Billboard. Retrieved October 5, 2015, from http://www.billboard.com/articles/
business/6494341/infinite-dial-us-music-streaming-report
Playing the Social Tune. (2013, November 24). Business Today. Retrieved September 28, 2015,
from http://www.businesstoday.in/magazine/lbs-case-study/london-case-study-how-
spotify-evolved-its-use-of-marketing-tools/story/200269.html
Jamie Huggins IMC 613 — Week 9 42
Shontell, A. (2015, June 6). Spotify Made A Tiny Change to Its Logo — See if You’ve Even
Noticed Yet. Business Insider. Retrieved August 24, 2015, from http://
www.businessinsider.com/spotify-changes-logo-color-to-brighter-shade-of-
green-2015-6#ixzz3jkckkgjE
Snader, N. (2015, May 27). Why Streaming Is the Future of the Music Industry, Not Its End. The
Cheat Sheet. Retrieved September 2, 2015, from http://www.cheatsheet.com/business/
why-streaming-is-the-future-of-the-music-industry-not-its-end.html/?a=viewall
Spotify [Spotify]. (2011, November 30). Spotify’s mission was simple: Give people access to all
the music they want all the time - in a completely legal & accessible way [Tweet].
Retrieved on September 21, 2015, from https://twitter.com/spotify/status/
141929408763142144
SPOTIFY: THE RACE TO EXIST IN THE FUTURE OF MUSIC STREAMING. (2014, November
27). Mecink. Retrieved October 5, 2015, from http://mecink.com/2014/11/27/spotify-the-
race-to-exist-in-the-future-of-music-streaming/
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difference/Pandora_vs_Spotify
Statistics and facts on Pandora Media, Inc. (2015). Statista. Retrieved September 21, 2015,
from http://www.statista.com/topics/1349/pandora/
Stella, R. (2015, May 8). With Grooveshark out of the picture, we pit Spotify against Pandora.
Digital Trends. Retrieved September 2, 2015, from http://www.digitaltrends.com/music/
spotify-vs-pandora/2/#ixzz3kbesomMM 
Terms and Conditions of Use. (2015, September 9). Spotify. Retrieved September 28, 2015,
from https://www.spotify.com/us/legal/end-user-agreement/
Jamie Huggins IMC 613 — Week 9 43
Tischler, L. (2015, March 12). Spotify Unveils A Bold New Brand Identity. Fast Company.
Retrieved September 28, 2015, from http://www.fastcodesign.com/3043547/spotifys-
new-look-signals-its-identity-shift
The Color Green. (2015). Empower Yourself With Color Psychology. Retrieved September 28,
2015, from http://www.empower-yourself-with-color-psychology.com/color-green.html
Wilkes, R. (2015, March 17). How the visual re-invention of Spotify could hold the key to fortune
and fame. We-Heart. Retrieved October 5, 2015, from http://www.we-heart.com/
2015/03/17/spotify-rebrand-collins-new-york/
Willgress, L. (2015, July 3). Music Industry Finally Reaches ‘Tipping Point’ as Massive Music
Growth of Streaming Services Like Spotify Gives Sales Their Biggest Boost in Years.
Daily Mail. Retrieved September 2, 2015, from http://www.dailymail.co.uk/news/
article-3148196/Music-industry-finally-reaches-tipping-point-massive-growth-streaming-
services-like-Spotify-gives-sales-biggest-boost-years.html#ixzz3kbgE5jTO 
Wilson, J. (2015, September 30). Spotify (for PC). PCMag. Retrieved October 5, 2015, from
http://www.pcmag.com/article2/0,2817,2366868,00.asp
Woods, B. (2014, October 24). How 21 big tech companies got their names. The Next Web.
Retrieved September 28, 2015, from http://thenextweb.com/insider/2014/10/24/how-21-
big-tech-comapnies-got-their-names/2/
Young, V. (2015, January 13). The Product Strategy Fueling Spotify's Growth To 60 Million
Users. Creative Interactions. Retrieved October 13, 2015, from http://
www.createinteractions.com/designtech/2015/1/13/spotify-growth-analysis-product-
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Spotify Brand Audit IMC 613

  • 1. Jamie Huggins IMC 613 — Week 9 1 Spotify Brand Audit Jamie Huggins IMC 613 Source: 9to5google.com
  • 2. Jamie Huggins IMC 613 — Week 9 2 Table of Contents Executive Summary………………………………………….………………………..……………………..………………….3 Industry Background……………………………………………………………………..…………………………..…………4 Brand Position…………………….……………..……………………………………………………….………..……5 Points-of-Parity………………………………………………………………………………..………….……………..6 Points-of-Difference………………………………………………………………………..…………….……………..7 Target Audience……………………………………………..….………………………………………….……………8 Allocation of Branding Resources………………………..…………………………………..…………………….…8 Benefits Gained……………………………………………………………..………..………..…………………….…9 Competition……………………………………………………………………..………………….……………………9 Brand Inventory……………………………………………………………….…………………………….……………….….12 Service Offerings………………………………..………………….…………………………………………………12 Brand Elements………………………………………………………..…………………….…………..……………13 Brand Associations…………………………………………………………..………………………………………..14 Company Perceptions………………………………………………………………………..……………………….16 Marketing Support Programs………………………………………………………..……….…..……………….…19 Competitive Environment……………………………………………………………………………………………..20 Brand Hierarchy………………………………………………………………………………..………….…………..22 Brand Exploratory……………………………………………………………………………………….………………..…….24 Service Offerings (Consumer Perspective……………….……………………………….…..…………………….24 Brand Associations (Consumer Perspective)……………………………………………….…..………………….25 Company Perceptions (Consumer Perspective)…………………………………………..………………………27 Marketing Support Programs (Consumer Perspective)……………………………………………..…………….29 Competitive Environment (Consumer Perspective)…………………………………………………..……………30 Target Market…………………………………………………………………………………………………………..31 Perceptual Map……………………………………………………………………………………….………………..32 Classmate Survey……………………………………………………………………………………………………..33 Recommendations……………………………………………………………………………………………………………..36 References……………………………………………………………………………………………………………………….39
  • 3. Jamie Huggins IMC 613 — Week 9 3 Executive Summary This brand audit is a health check for Spotify and seeks to identify and address any problems the brand may be facing with the purpose of improving brand equity and the bottom line. Within this brand audit is an industry background, a complete brand inventory and brand exploratory, and a recommendations section for future improvements to the Spotify brand itself. The brand inventory section provides an assessment of the health of the Spotify brand and its sources of brand equity from the company’s perspective. The brand exploratory recognizes what Spotify consumers perceive about the brand in order to better understand it and address any possible weaknesses it may have. With over 75 million active users in 64 different countries, it seems safe to say that Spotify is certainly doing something right. The brand continuously strives to be innovative and increase its services to better appeal to its target audience. However, because Spotify is a challenger brand in the digital streaming music industry, it will have to make strong efforts to truly connect with its user base and turn “Spotify” into a household name in the United States. The two main issues surrounding Spotify that were discovered in this brand audit include the following: a lack of brand awareness among Spotify’s target market of Millennials and a lack of market share in the digital music streaming industry. Recommendations to maintain growth and success include improving market share by growing both free and premium user bases and improving brand awareness by creating multi-platform advertising campaigns. These challenges and recommendations present an opportunity for Spotify to continue grow as other competitors launch their own services and products. If Spotify can grow its market share and increase its brand awareness among Millennials, it will greatly improve the brand’s chances of remaining one of the top music streaming services and one day, perhaps, being the top music streaming service in the industry.
  • 4. Jamie Huggins IMC 613 — Week 9 4 Industry Background While the music industry had experienced decline in past years, especially in the area of album sales, the industry as a whole is not down.  In actuality, the industry has recently experienced a boost in growth, which has counterbalanced declining album sales. This growth is the result of streaming services, like Spotify. "Streaming is beginning to fill gaps in digital revenue that options like music downloads used to occupy. In 2014, digital downloads from iTunes and other sources fell 8%, and the IFPI believes that the rise of smartphones and a need-it-now attitude among listeners is largely what’s driving the push toward quality streaming services” (Snader, 2015). “The number of stream equivalent albums, on services such as Spotify, has increased year-on-year by almost 80 per cent” (Willgress, 2015).  This data compared 6 months of time between January and June of 2014. While album sales were down almost 4% during this timeframe, total music consumption increased 4% (from 52 million digital listeners to 55 million listeners).  "The most-streamed track of the year to date is Mark Ronson’s Uptown Funk, which has been streamed 45 million times so far” (Willgress, 2015).  Streaming was also boosted by the release of Sam Smith’s new album, “In the Lonely House,” and Ed Sheeran’s album, “X.”  “YouTube figures are not included in the data, but views are up 98.2% at 12.5 billion in comparison with the 6 month equivalent period last year” (Willgress, 2015).   According to Kevin Brown, who is in label relations for Spotify in Europe, “'It should come as no surprise to learn that more people than ever before are enjoying, discovering and sharing music through streaming services. Listening to music on Spotify is simple, easy and free, and Source: dailymail.co.uk
  • 5. Jamie Huggins IMC 613 — Week 9 5 helps music fans to discover a whole new world of music wherever and whenever they want it” (Willgress, 2015).  Subscription streaming services are also on the rise growth-wise.  "Revenues for subscription services increased 39% in 2014 to $1.57 billion, including Spotify’s ad-free premium service for about $10 per month and the new streaming service Tidal (under music mogul Jay-Z’s wing). Today, an estimated 41 million people pay for a streaming service of some kind, up from 28 million people in 2013” (Snader, 2015).  However, it is important to note that a majority of consumers will still seek out the most affordable streaming services possible. For instance, Spotify has 75 million active users, but only 15 million of those pay for its subscription services (Snader, 2015).  Brand Position Launched in 2008, Spotify was created in Sweden, but expanded to the United States later in mid-2011. Since then, Spotify has grown to be one of the most popular music streaming services in the world. “As of June 2015, the music streaming platform had 75 million active users worldwide, up from 50 million in November of the previous year” (Number of Global, 2015). Spotify is particularly popular with Facebook users (used by 39 million active Facebook users) and smartphone users (used by 15% of smartphone users). Source: dailymail.co.uk Source: statista.com
  • 6. Jamie Huggins IMC 613 — Week 9 6 However, even with solid statistics, Spotify still ranks behind the top music streaming competitors. According to the 2015 Infinite Dial report from Edison Research and Triton Digital, Pandora leads the audio streaming space with 34% of users polled stating that they had used Pandora in the last month. Furthermore, Pandora has the highest brand awareness at 75% (Peoples, 2015). iHeartRadio and iTunes radio are other top contenders, with 11% users stating they had used the services in the last month. However, iTunes ranks higher in brand awareness (72%), while iHeartRadio ranks slightly lower in brand awareness (59%). Finally, comes Spotify with 10% of users stating they had used their streaming services in the last month. Additionally, the brand only has a 41% brand awareness ranking. "All streaming services are most popular with the youngest age group: 54% listened to Pandora in the last month, 23% listened to Spotify and 20% listened to iTunes Radio” (Peoples, 2015).   Points-of-Parity (POP) • Music Streaming Services: As previously stated, Pandora is the #1 music streaming service — with 34% of users stating that they used the platform in the last month. Spotify comes in 3rd, with 10% of users stating that they used the platform in the last month (Peoples, 2015).  • Free and Paid Services: Both Spotify and Pandora offer free subscriptions to users (with ads) and paid (ad-free) subscription based services to users.  Pandora’s service is $4.99 per month, while Spotify’s is $9.99 per month.  Source: tritondigital.com
  • 7. Jamie Huggins IMC 613 — Week 9 7 • Apps: Both Pandora and Spotify offer desktop, mobile and web apps to their users.  However, it is important to note that only Pandora One users (Pandora paid members) can access the desktop app.   • Radio: As mentioned previously, Pandora is a radio streaming service.  It is important to add that Spotify also offers radio, but it is traditional style radio and not music recommendation radio like Pandora offers.   • Social Features: Pandora and Spotify both afford their users the ability to connect with friends, share their favorite music, or recommend artists and playlists.  Pandora users have the ability to share stations across Facebook and Twitter, while Spotify users "have the ability to share individual songs, entire playlists, and even specific artists with any of  their friends/followers on Facebook, Twitter, or Tumblr” (Stella, 2015).  Points-of-Difference (POD) • Library Size: While both streaming services have a library of music at their users’ dispense, the size of the library differs greatly.  Pandora has a music library size of about 1,000,000 songs.  Spotify has approximately 30 million (Spotify vs Pandora, 2014).  • Song Choice Freedom: Pandora is a radio streaming service that does not allow users to choose specific songs they want to listen to.  Instead, they create radio stations based on their music preferences.  Spotify listeners, on the other hand, can choose what songs they want to listen to and when they want to play them (Spotify vs Pandora, 2014). • Custom Playlist Creation: Spotify allows its users to create custom playlists that can be shared on the platform and across social media. Other users can even edit these playlists if the creator allows.  Pandora does not allow its users to create custom playlists.  Users are only able to build their own playlists, which are really just radio stations, based on their favorite music (Spotify vs Pandora, 2014). 
  • 8. Jamie Huggins IMC 613 — Week 9 8 • Type of Streaming: As previously stated, Pandora is a radio streaming service.  Users visit the site to create radio stations based on their favorite artists or music genres.  Pandora is more about music discovery.  Spotify focuses more on customizable, streamable music.  It is more about listening to and sharing music that users already know and love. • User Demographics: "Nearly two-thirds of US Spotify users were between the ages of 13 and 29, with 18- to 24-year-olds accounting for the largest share. In comparison, 45% of Pandora listeners were between 13 and 29, and 35- to 44-year-olds accounted for the largest share of users” (Pandora Maintains, 2015).  Target Audience According to ComScore and Spotify representatives, “40% of all Spotify users in the United States are between the ages of 18 and 24. Compared to the general population, Spotify users are 26% more likely to be a student, 20% more likely to be a college student, and 3.75x more likely to be a graduate student” (Biernacki, 2013). The average Spotify user streams music for 107 minutes per day. Allocation of Branding Resources The digital music streaming industry is a growing market with challengers Pandora launching in 2005 and Spotify launching in 2008. The mission of Spotify was simple. The company sought to give people access to all of the music that they wanted in a completely legal and accessible way (Spotify, 2011). Pandora’s mission was also similar; they sought to allow their users to play only music that they loved (Pandora, 2015). Pandora accomplishes their mission through their use of random, radio song discovery, while Spotify allows users to search Source: engadget.com
  • 9. Jamie Huggins IMC 613 — Week 9 9 and listen whatever specific songs and albums that they want. However, Spotify still severely lags behind Pandora in the areas of brand awareness and user listening base. If Spotify hopes to continue to grow and challenge Pandora in coming years, the brand must boost overall awareness among its target audience and respond to their streaming wants and needs in order to stay relevant. Benefits Gained Building brand awareness will allow Spotify to increase its market share and strengthen any confused perceptions users may have about the brand. In turn, this will help grow and strengthen Spotify’s existing user base. Spotify can use non-traditional advertising efforts to help the brand increase listening loyalty and numbers by focusing on Spotify’s value (for both its premium and free services) compared to competitor, Pandora. The expectation is to see Spotify increase its market share to 14% and its overall brand awareness to 60% through these branding and marketing activities. These proposed numbers will put the brand in a much better position to contend with Pandora. Competition Spotify was chosen as the challenger brand because of its immense potential and consecutive growth rate over the past few years. In just 6 years, Spotify has evolved into a global powerhouse “with more than 20 million paying subscribers and 75 million active users. That’s double the number of paying users Spotify had in May 2014 when it hit the 10 million subscriber mark” (Paul, 2015). Additionally, Spotify is working on branching out its services beyond music to include podcast and radio. “The world's largest media organizations have signed on with Spotify Source: macworld.com
  • 10. Jamie Huggins IMC 613 — Week 9 10 to contribute content, including ABC, BBC, NBC, TED, and Comedy Central” (McGarry, 2015). Spotify is working with these partners to develop original content for users to watch and listen to. “Some of the more interesting ventures include Amy Poehler's Smart Girls, which will create a Dance Move of the Day video for the platform, and a show called Turntable, which features musicians and chefs performing and eating together” (McGarry, 2015). Finally, Spotify has shown ingenuity by recently adding a feature just for runners. Songs are matched to the runner’s tempo and pace to create an engaging experience. These innovative efforts, coupled with consistent growth, show that Spotify has the potential to compete with industry leaders, like Pandora. Pandora Pandora is the current digital music streaming industry leader with a 34% market share. Founded in 2005, the company has grown to “more than 200 million registered users in the United States, Australia and New Zealand. This marked a huge increase from 22 million registered users back in 2009. Of those registered users, it was estimated that in 2013, the company’s number of paying subscribers reached 3.3 million, which suggests that the majority of subscribers in 2013 still preferred Pandora’s free streaming service” (Statistics and Facts, 2015). However, it is important to note that Pandora’s leading streaming status has come at a cost. In 2013, the company’s share of content acquisition costs was considerable at 53.8% of their total revenue. “Yet the future holds some potential good news as this share is expected to gradually decrease to 35.3% by 2021 (Statistics and Facts, 2015). Source: statista.com
  • 11. Jamie Huggins IMC 613 — Week 9 11 iHeartRadio iHeartRadio is another top contender in the digital streaming music industry. Launched in 2011, the company has 11% of the market share and over 60 million registered users. “iHeartRadio’s app has been downloaded 500 million times already but without an active user number, it’s difficult to quantify just how it stacks up to the competition. Unlike some of the other players in the space, iHeartRadio doesn’t offer a paid service. Instead, it earns all of its money from ad revenue” (Knight, 2015). Earlier this year, the company claimed that it is the fastest growing digital streaming service, and it is even growing faster than Facebook. However, these claims were not backed with publicly shared statistics. iTunes Radio The third competitor in the digital streaming music industry is iTunes Radio with a 11% market share. Launched in 2013, the service has approximately 40 million users in the United States and Australia (Kahn, 2014). “iTunes Radio was Apple's attempt to keep music lovers inside the Apple ecosystem. If consumers were busy streaming music via sites like Pandora, Apple figured it might as well offer its own streaming service in an attempt to funnel users towards the ever-tantalizing ‘buy’ button” (Heisler, 2014). To date however, only 1-2% of users have been clicking the “buy” button. “Overall music downloads have been declining upwards of 15%, according to several label executives. At the same time, Apple is finding that its influence over labels is slipping as other streaming services gather momentum. One independent label said that iTunes's share of the label's revenue has eroded from more than 70% in 2012 to about 50% today” (Heisler, 2015). At this time, Apple has no plans to turn the service into a subscription-based platform. Source: mashable.com
  • 12. Jamie Huggins IMC 613 — Week 9 12 Spotify Brand Inventory Service Offerings Spotify offers its users both free and premium service packages. The free service allows any user to stream Spotify at no personal cost. The premium service, on the other hand, is $9.99 per month. It includes additional features not offered on the free service like ad free, unlimited skips, the ability to listen offline, the ability to play any track, and high quality audio (Go Premium, 2015). Additionally, Spotify recently announced that it will be adding even more features for Spotify Premium users later this year. “Spotify is expanding well beyond streaming music, adding TV shows and original video content, podcasts and radio shows, new discovery tools, and an electronic jogging buddy to its mobile app” (Moynihan, 2015). These service advancements allow Spotify to grow even closer to its goal of being one-stop entertainment OS for their users’ smartphones, and they are the first step in making music-only or video-only streaming services look limited in comparison. “According to Spotify, the new features will show up in the iOS app first. Spotify did not specify when the new features would be available on Android, but the company did say the video and podcast features are planned for their other app platforms” (Moynihan, 2015). Brand Elements Name Even though Spotify was originally started in Sweden, the name “Spotify” itself is not of Swedish origin. It does not actually mean anything in Swedish (although Google Translate does Source: spotify.com
  • 13. Jamie Huggins IMC 613 — Week 9 13 attribute the word as being Swedish). “Instead, the company’s founders Daniel Ek and Martin Lorentzon were sitting around one day trying to think of a name when one of the suggestions was misheard as ‘Spotify’, which then sort of just stuck. When the duo realized there were no Google results for the word and that the domains were available to register, they snapped them up and the rest is history” (Woods, 2014). Logo Spotify has surprisingly undergone multiple logo changes in the past few years. One of the earliest changes took place in early 2013 when Spotify debuted a redesigned logo with less “bounce” to hopes to reach a wider audience and expand its services. The subscription streaming service's former logo used playful, bubbly font, but the 2013 design seemed to show a company that was taking itself a bit more seriously. The 2013 version was neater, used clean lettering, and included a discrete icon” (Kastrenakes, 2013). Though this logo was less lively than its predecessor, it did not mean that Spotify was settling down. Earlier this year, Spotify redesigned its logo once again. Though this change was only a slight color change, the brand originally received user backlash on its color choice. Spotify responded to users by saying that their old “broccoli-green” logo was in need of an upgrade, so that is why the color was changed.  They stated, “As much as we got used to the old broccoli green, we felt that the dreary brand palette was desperate for an upgrade. It was time to give it a little refresh and make sure it goes well with our vibrant new color palette. The Source: vulture.com Source: theverge.com
  • 14. Jamie Huggins IMC 613 — Week 9 14 new green has a little more pop and just feels right at home in our new color palette, which has has grown to nearly three dozen colors. It not only looks more fresh and modern but also feels feels more easy on the eye, especially when applying it fullscreen” (Shontell, 2015).  URL https://www.spotify.com/ The brand has its original website (link shared above) currently available for 64 different countries ranging from the United States to Uruguay to Chile. Slogan “The Right Music for Every Moment.” Brand Associations Memorability   “A necessary condition for building brand equity is achieving a high level of brand awareness” (Keller, 2013, p.115). Spotify is one of the most popular digital music streaming services in the world. It is available in 64 different countries and has 75 million active users. This makes the brand inherently recognizable and memorable, which aids in overall popularity and future growth. Spotify has successfully positioned itself in the brand marketplace, so that it can be easily recalled by customers. Meaningfulness Spotify is well-known for its use of the color green. From a brand meaning perspective, green is the color of balance, harmony, and growth. “It renews and restores depleted energy. It is the sanctuary away from the stresses of modern living, restoring people back to a sense of well being” (The Color Green, 2015). Spotify states that “Spotify Green” is the brand’s “hero” color. It clearly signifies the presence of Spotify in people’s lives and helps users immediately identify the brand (Brand Identity Guidelines, 2013). Likability
  • 15. Jamie Huggins IMC 613 — Week 9 15 To make sure Spotify’s brand identity delivers the right music for every moment, the brand follows three important principles: easy, personal, and fun. These foundational principles help build a likable and engaging user experience around the brand. Transferability Because Spotify is a global brand, its brand elements must be able to transfer through different cultures. Spotify is quickly becoming a widely recognized brand, and its symbol and logo are easily transferable within its different service categories across geographic regions and cultures. However, Spotify’s slogan, “The Right Music for Every Moment,” is less transferable, due to the brands’ recent announcement for additional services like TV, podcasts, video content, and radio shows. The current slogan severely limits the brand to only music and may cause confusion (if Spotify truly becomes more than music) as it enters into new markets. Adaptability As previously mentioned, Spotify has adapted its logo over the years to aid in consumer usage and popularity. To remain contemporary and relevant to its target market, Spotify has embraced change in different logo forms. Below are some images of the evolution of the Spotify logo as it has changed over time (the 1st logo is the original, the 2nd change took place in 2013, and the 3rd change took place in 2015): Protectability Spotify’s brand is legally protected from any unauthorized use. It’s logo and brand name cannot be used by another company, nor can another company copy Spotify’s brand name or logo. According to Spotify’s website, “all Spotify trademarks, service marks, trade names, logos, Source: scottbriscoe.com Source: newslangmedia.com Source: vulture.com
  • 16. Jamie Huggins IMC 613 — Week 9 16 domain names, and any other features of the Spotify brand (‘Spotify Brand Features’) are the sole property of Spotify or its licensors. The Agreements do not grant users any rights to use any Spotify Brand Features whether for commercial or non-commercial use” (Terms and Conditions of Use, 2015). Company Perceptions Brand Imagery Spotify claims that imagery is one of the brand’s most important assets. Spotify focuses on imagery that is candid and real, macro and micro, has place and personality, and contains the presence of music. • Candid and real: Spotify seeks to capture and promote images that are real and authentic. They love candid shots of real people, interacting with each other and the world (Brand Identity Guidelines, 2013). • Macro and micro: “Everything is relative. The simplest moments can often mean the most” (Brand Identity Guidelines, 2013). This is why Spotify’s imagery style covers a wide spectrum. “From scrambling eggs for breakfast to choosing the next leader of the free world, all moments can be made better with music” (Brand Identity Guidelines, 2013). • Place and Personality: Spotify’s taste in music is as individual and original as the brand itself. Because of this, Spotify’s image style portrays a wide range of people and personalities enjoying music enjoying Source: issuu.com Source: issuu.com Source: issuu.com
  • 17. Jamie Huggins IMC 613 — Week 9 17 music in a variety of recognizable places (Brand Identity Guidelines 2013). • Presence of Music: “The strongest moments for Spotify are those associated with music. That is why it is important for the brand to show how their users are enjoying music — to make a connection” (Brand Identity Guidelines, 2013). Brand Performance Spotify has been extremely happy with the brand’s performance to date. Jonathan Forster, who runs Spotify’s European operations, recently stated that Spotify intends to keep its position as a top music player, and “it is enough to be among the top three” in a larger market. This statement was made on the heels of “a $526 million funding round that values the Swedish company at $8.53 billion and revealed that it now has 75 million active users, of whom 20 million are paying customers – up from 40 million and 10 million just over a year ago” (Davidson, 2015). While the company still lags in market share (10%) behind Pandora (34%), iHeartRadio (11%), and iTunes Radio (11%), Forster still thinks there is plenty of room for the brand to grow. Brand Personality As previously stated, Spotify seeks to portray its brand personality as easy, personal, and fun. • Easy: “Spotify is effortless and intuitive” (Brand Identity Guidelines, 2013). Easy is effortlessly being able to join the brand, talk to the brand, and use the service. • Personal: “Spotify is friendly, informal, and relevant” (Brand Identity Guidelines, 2013). Personal is illustrated through the right music at the right time on users’ terms. • Fun: “Spotify is playful, with a hint of irreverence” (Brand Identity Guidelines, 2013). Fun is illustrated through music itself. Feelings Source: issuu.com
  • 18. Jamie Huggins IMC 613 — Week 9 18 “Brand feelings are customers’ emotional responses and reactions to the brand” (Keller, 2013, p.90). Spotify portrays itself as an easy, personal, and fun brand in order to deeply connect with its target audience worldwide. “The goal of their brand identity is to create a look and personality that signals to the brand’s core audience of Millennials that Spotify is as rich and lively as the music culture it fronted, rather than simply a technology service that served up songs” (Tischler, 2015). Judgements “Brand judgements are customers’ personal opinions about and evaluations of the brand, which consumers form by putting together all different brand performance and imagery associations” (Keller, 2013, p. 89). Spotify distinguishes itself from competitors “by offering unique benefits that other companies don’t offer, such as the ability to access specific artists through a flat subscription fee” (Ganot, 2015). Furthermore, Spotify seeks to differentiate itself by making its brand more than music and offering video, podcast, radio, etc. They believe that an innovative mindset can ultimately affect consumers’ attitudes about their brand. Marketing Support Programs “Spotify’s growth has been a more modest approach relying on word-of-mouth, PR and co-marketing rather than big ad budgets. When the service went live in October 2008, it kept its free service invitation only, something that had been in place whilst it was in the final stages of development prior to public launch. By introducing scarcity, the invitation-only element was a vital part of the platform’s rise. It helped create a viral element to the service, with users each having 5 invites at first to share with their friends. Similarly, the launch of Spotify in the US used private ‘Beta’ invites to create a buzz as Source: news.spotify.com
  • 19. Jamie Huggins IMC 613 — Week 9 19 those with access shared their use of it in social media (and through word-of-mouth)” (Chaffey, 2015). Today, Spotify additionally relies on a mix of social media, co-marketing and partnerships, and campaigns to improve its reach and visibility. “Spotify adopts a traditional approach to managing its own social media feeds” (Playing the Social Tune, 2013). Spotify states that both Facebook and Twitter provide them with platforms to promote their new artists and albums, talk about new Spotify features, and get valuable feedback to improve their services. “In addition, Spotify tries to drive social media users to its premium service by promoting on Facebook and Twitter before releases unique content and competitions that only premium Spotify users can access” (Playing the Social Tune, 2013). Spotify’s Facebook page currently has over 7,800,000 “likes”, and their Twitter profile has over 1.51 million followers. “Spotify's innovations in social media are driven by the belief that music is social” (Playing the Social Tune, 2013). Furthermore, Spotify has used co-marketing and partnerships to increase its reach by embedding different widgets on other websites. “For example Drowned In Sound has a monthly playlist which it embeds within its blog which encourages its readers to engage with Spotify. A music magazine like NME offers apps with a range of playlists which again will generate awareness and engagement. Other partnership services enable Festivals and Charities to engage their audience through Spotify playlists” (Chaffey, 2015). Finally, Spotify has begun to invest in campaigns. In 2013, the brand launched a multi-platform campaign with a 30 second ad-spot during the premiere of NBC’s “The Voice.” Sixty-second versions of the ad also appeared during the “Tonight Show with Jay Leno” and “Late Night With Jimmy Fallon. “In 2014, Spotify launched a 'Music takes You Back' ad. It centered around three videos which Source: sproutsocial.com
  • 20. Jamie Huggins IMC 613 — Week 9 20 showcases three different people’s stories through the medium of Spotify, Facebook, text messages, Skype and Instagram. Its aim was to show how Spotify can bring people together through its integration with social media. Spotify decided not to use TV creating 75 to 90 second videos rather than the typical 30 second TV ad break slots” (Chaffey, 2015). Competitive Environment Spotify has grown to be one of the most popular music streaming services in the world. “As of June 2015, the music streaming platform had 75 million active users worldwide” (Number of Global, 2015). Spotify is particularly popular with Facebook users (used by 39 million active Facebook users) and smartphone users (used by 15% of smartphone users). However, even with solid statistics, Spotify still ranks behind the top music streaming competitors. According to the 2015 Infinite Dial report from Edison Research and Triton Digital, Pandora leads the audio streaming space, followed by iHeartRadio and iTunes Radio. Spotify ranks 3rd, with 10% of users stating they had used their streaming services in the last month. Pandora Pandora is the current digital music streaming industry leader with a 34% market share. Founded in 2005, the company has grown to “more than 200 million registered users in the United States, Australia and New Zealand. This marked a huge increase from 22 million registered users back in 2009. Of those registered users, it was estimated that in 2013, the company’s number of paying subscribers reached 3.3 million, which suggests that the majority of subscribers in 2013 still preferred Pandora’s free streaming service” (Statistics and Facts, 2015). However, it is important to note that Pandora’s leading streaming status has come at a cost. In 2013, the company’s share of content acquisition costs was considerable at 53.8% of Source: tritondigital.com
  • 21. Jamie Huggins IMC 613 — Week 9 21 their total revenue. “Yet the future holds some potential good news as this share is expected to gradually decrease to 35.3% by 2021 (Statistics and Facts, 2015). iHeartRadio iHeartRadio is another top contender in the digital streaming music industry. Launched in 2011, the company has 11% of the market share and over 60 million registered users.“iHeartRadio’s app has been downloaded 500 million times already but without an active user number, it’s difficult to quantify just how it stacks up to the competition. Unlike some of the other players in the space, iHeartRadio doesn’t offer a paid service. Instead, it earns all of its money from ad revenue” (Knight, 2015). Earlier this year, the company claimed that it is the fastest growing digital streaming service, and it is even growing faster than Facebook. iTunes Radio The third competitor in the digital streaming music industry is iTunes Radio with a 11% market share. Launched in 2013, the service has approximately 40 million users in the United States and Australia (Kahn, 2014). “iTunes Radio was Apple's attempt to keep music lovers inside the Apple ecosystem. If consumers were busy streaming music via sites like Pandora, Apple figured it might as well offer its own streaming service in an attempt to funnel users towards the ever-tantalizing ‘buy’ button” (Heisler, 2014). To date however, only 1-2% of users have been clicking the “buy” button. “Overall music downloads have been declining upwards of 15%, according to several label executives” (Heisler, 2015).
  • 22. Jamie Huggins IMC 613 — Week 9 22 Points-of-Parity (POP) and Points-of-Difference (POD) Brand Hierarchy Spotify currently offers one type of service to users, but the brand has three additional service offerings coming soon. Right now, Spotify offers both free and premium music services to its users. Free services are available to anyone, and users can stream music in a shuffle Spotify Pandora iHeartRadio iTunes Radio POP - #1 Music Streaming Service: 35% market share - Free and Paid Services: $9.99/ month - Apps: Desktop, mobile, & web - Radio - Social Features: ability to share songs, entire playlists, & specific artists with friends/ followers on social media - #2 Music Streaming Service: 11% market share - Free and Paid Services: $4.99/ month - Apps: Desktop, mobile, & web - Radio - Social Features: ability to share stations on social media - #2 Music Streaming Service (11% market share) - Free Service (no paid option) - Apps: Desktop, mobile, & web - Radio - Social Features: ability to share songs on social media and view songs that friends have recently listened to or liked - #3 Music Streaming Service (10% market share) - Free and Paid Services: $4.99 per month - Apps: Desktop, mobile, & web - Radio - Social Features: ability to share stations to social media POD - Library Size: 30 million songs - Custom Playlists: allows users to create custom playlists - Song Choice Freedom: Yes - Type of Streaming: customizable, streamable music - Library Size: 1 million songs - Custom Playlists: allows users to create custom radio stations - Song Choice Freedom: No - Type of Streaming: radio/ music discovery - Library Size: 900,000 songs - Custom Playlists: allows users to create custom radio stations - Song Choice Freedom: No - Type of Streaming: radio/ music discovery - Library Size: 27 million songs - Custom Playlists: allows users to customize radio stations - Song Choice Freedom: No - Type of Streaming: radio/ music discovery
  • 23. Jamie Huggins IMC 613 — Week 9 23 play mode. Premium services costs $9.99 per month and include shuffle play, as well as, ad free listening, unlimited skips, the ability to listen offline, the ability to play any track, and high audio quality. Proposed later this year are TV, video, radio, and podcast services. “The world's largest media organizations have signed on with Spotify to contribute content, including ABC, BBC, NBC, TED, and Comedy Central” (McGarry, 2015). Spotify is working with these partners to develop original content for users to watch and listen to. Finally, Spotify has shown ingenuity by recently adding a feature just for runners. Songs are matched to the runner’s tempo and pace to create an engaging experience. 
 Spotify Services Music TV & Video Radio & Podcasts Running Free Premium Coming Soon Coming Soon Coming Soon
  • 24. Jamie Huggins IMC 613 — Week 9 24 Spotify Brand Exploratory Service Offerings (Consumer Perspective) Spotify offers its users both free and premium service packages. The free service allows any user to stream Spotify at no personal cost. The premium service, on the other hand, is $9.99 per month. It includes additional features not offered on the free service like ad free, unlimited skips, the ability to listen offline, the ability to play any track, and high quality audio (Go Premium, 2015). So, what do consumers’ think about these services? Since Spotify is not a product, finding specific user reviews on their services is a bit difficult. However, Spotify does have plenty of reviews on tech-blogs ranging from CNET to TechRadar to PCMag. • TechRadar gives the entire brand 5 out of 5 stars. Specific top highlights of Spotify’s services include: a great new look, awesome music, excellent service features, 320 kpbs streaming, and exclusive content. Their negatives included a clunky web player and a poorly designed search feature (Rivington, 2015). • CNET gives the brand an 8.9 out of 10. Positive aspects about the brand included a fresh, clean design that goes beyond streaming music with videos, podcasts and extra features. Additionally, it has a massive collection of community-driven playlists where users can find great music for any mood, activity or holiday. The free, ad-supported version offers a good introduction to the service with no time limit” (Mitroff, 2012). Some negatives about the brand included difficulty combining personal music files with Spotify’s catalogue, and the fact that without a premium account, users cannot listen offline or pick any song they want to hear. Source: cnet.com
  • 25. Jamie Huggins IMC 613 — Week 9 25 • PCMag gives the Spotify brand 4.5 out of 5 stars. PCMag states that while Spotify’s offers both free and premium services, they believe that premium price tag of $9.99 per month is worth it. They state, “Spotify Premium lets you hear albums before they're released, cache songs for offline playback on your computer, phone, or other devices. It also increases audio quality to 320Kbps. Feature and quality-wise, Premium is worth the extra bucks” (Wilson, 2015). Brand Associations (Consumer Perspective) Memorability Spotify is one of the most popular digital streaming services in the world and has 75 million active users. Even with that strong user base, when compared to Pandora, iHeartRadio, and iTunes Radio, it lacks significantly in brand awareness and brand usage ratings. Pandora has the highest brand awareness level (75%) and monthly usage rate (45%). “iHeartRadio ranks third in brand awareness (59%) and second in usage (17%). iTunes Radio climbed to second in brand awareness (72%) and ranks third in brand usage (16%). Spotify brand awareness ranks behind two laggards (41%) but ranks fourth in brand usage (13%) and has by far the best numbers of an on-demand subscription service” (Peoples, 2015). Meaningfulness While Spotify is well-known for its color green, the color itself has had mixed responses as of late. A few months ago, "Spotify changed the color of its logo to a brighter forest green instead of the lime green that it had before” (Shontell, 2015).  This was done to better attract a younger, millennial audience and give the brand a more modern, fresh look that resonated with Source: businessinsider.com
  • 26. Jamie Huggins IMC 613 — Week 9 26 consumers. However, Spotify did not warn their users of the change, and because of this, many were initially upset over the color shift. Today, it does appear that much of the initial backlash has dissipated, and users have adjusted to the color change. Likability According to tech-blog reviews, which were previously mentioned, Spotify’s overall brand likability score is high. These popular tech-blogs (ranging from CNET to PCMag to TechRadar) have given the brand high ratings across the board, and they praise the brand on its ease of installation and setup, integrated features and support, useable interface, and overall performance. Transferability Spotify is quickly becoming a widely recognized brand, and it is currently available in 64 different countries. Spotify’s symbol and logo are easily transferable within its different service categories across geographic regions and cultures. To date, there have not been any reports of confusion about the brand or its elements internationally. Adaptability Spotify has adapted its logo over the years to aid in consumer usage and popularity. To remain contemporary and relevant to its target market, Spotify has embraced change in different logo forms. As previously mentioned, Spotify’s most recent logo change created a swarm of backlash from consumers, because they did not like the new color of green the brand adopted. However, this seems to have passed, and users are adjusting to the color change. Protectability Source: theverge.com
  • 27. Jamie Huggins IMC 613 — Week 9 27 Spotify’s brand is legally protected from any unauthorized use. According to Spotify’s website, “all Spotify trademarks, service marks, trade names, logos, domain names, and any other features of the Spotify brand (‘Spotify Brand Features’) are the sole property of Spotify or its licensors. The Agreements do not grant users any rights to use any Spotify Brand Features whether for commercial or non-commercial use” (Terms and Conditions of Use, 2015). Upon signing up to use Spotify, all users must agree to these terms and conditions of use. Company Perceptions (Consumer Perspective) Brand Imagery To better reach its core user audience of millennials, Spotify recently sought “to create a look that would signal to the brand’s core audience of millennials that Spotify was as rich and lively as the music culture it fronted, rather than simply a technology service that served up songs” (Tischler, 2015). Spotify’s new look centered around two millennial traits: they are highly visual and they want to be involved in co-creation. Spotify’s design agency, Collins, greatly expanded their previous limited color palette (white, black, and green) to include duotone colors and a series of bursting shapes. “As a millennial himself, Collins co-founder Leland Maschmayer looks at his contemporaries as being defined by their energy and a desire to become ‘co-creators’ – to get involved with the Spotify experience on more than just a User Interface level” (Wilkes, 2015). While it is still too early to see how these changes affect Spotify’s bottom line, it seems safe to say that most users agree that these imagery changes were much needed. Brand Performance Source: fastcodesign.com
  • 28. Jamie Huggins IMC 613 — Week 9 28 As previously stated, Spotify’s brand and overall performance consistently receive high ratings across popular tech-blogs. For example, TechRadar recently stated, “Spotify is still the undisputed king of streaming, and its reign doesn't look like ending soon with these recent updates. The new look and the new features take what was already a brilliant service and add the level of polish and comprehensiveness to make it a five-star product” (Rivington, 2015). CNET similarly stated that “the competition in the on-demand streaming music category is increasingly fierce, as the market transitions from techie early adopters to the broader mass market that is still focused on buying digital singles and albums via iTunes and Amazon. But while the likes of Rdio, Rhapsody and the newly minted Apple Music try to stake their claim, Spotify's superior feature set keeps it ahead of the pack” (Mitroff, 2012). Brand Personality Spotify has repeatedly stated that it wants its users to perceive the brand as easy, personal, and fun (Brand Identity Guidelines, 2013). In a recent survey, MediaZ found that Spotify’s “highest-ranking qualities include creative and fun, which both achieved percentages of 53% in the most recent assessment. This consistency demonstrates Spotify’s clear brand positioning over the past few years with consumers clearly understanding the brand and its proposition” (Spotify: The Race, 2014). Feelings Spotify portrays itself as an easy, personal, and fun brand in order to deeply connect with its target audience of millennials worldwide. “The goal of their brand identity is to create a Source: mecink.com
  • 29. Jamie Huggins IMC 613 — Week 9 29 look and personality that signals to the brand’s core audience of millennials that Spotify is as rich and lively as the music culture it fronted, rather than simply a technology service that served up songs” (Tischler, 2015). As seen from the graph above, Spotify users rank the brand high in the areas of creativity and fun (53%). These positive emotional responses and perceptions from Spotify’s users are integral in the brand’s longterm success. Judgements Spotify seeks to distinguish itself from competitors “by offering unique benefits that other companies don’t offer, such as the ability to access specific artists through a flat subscription fee” (Ganot, 2015). Furthermore, they seek to differentiate itself by making their brand more than music by offering video, podcast, radio, etc. They believe that an innovative mindset can ultimately affect consumers’ attitudes about their brand. While Spotify receives mostly positive reviews and ratings, it is important to note that the brand’s overall usage rates and brand awareness scores are still relatively low compared to Pandora, iHeartRadio, and iTunes Radio. Spotify has recently unveiled multiple changes and expansions to their imagery and services, so time will tell if they will help eventually bridge disconnect issues facing the brand. Marketing Support Programs (Consumer Perspective) Spotify relies on social media campaigns to improve its reach and visibility with its target audience. Spotify states that both Facebook and Twitter provide them with platforms to promote their new artists and albums, talk about new Spotify features, and get valuable feedback to improve their services. Spotify’s Facebook page currently has over 7,800,000 “likes”, their Twitter profile has over 1.51 million followers, and their Instagram account has over 248,000 followers. “Spotify's innovations in social media are driven by the belief that music is social” (Playing the Social Tune, 2013). Additionally, Spotify recently raised its commercial game, and one of its latest advancements rolled out video ads in late 2014. These advancements allowed free Spotify users to watch a video ad in exchange for 30 minutes of ad-
  • 30. Jamie Huggins IMC 613 — Week 9 30 free streaming. These ads were tested in Q4 with brands including McDonald’s, Coca-Cola, Ford and Universal Pictures. “In February 2014, Spotify also entered into a partnership with News UK, through which new annual subscribers to The Times and Sunday Times’ Digital and Ultimate Packs received a year’s free Spotify Premium subscription. Interestingly enough, MediaZ data shows that 28% of respondents didn’t know much about Spotify or have never heard of it – a significant volume of people compared to the average digital property score of 16%, so, despite huge numbers of monthly users, there is still room to increase brand awareness and capitalize on consumers’ love of digital” (Spotify: The Race, 2014). Competitive Environment (Consumer Perspective) Pandora Pandora is the current digital music streaming industry leader with a 34% market share. The company has grown to “more than 200 million registered users in the United States, Australia and New Zealand. Of those registered users, it was estimated that in 2013, the company’s number of paying subscribers reached 3.3 million, which suggests that the majority of subscribers in 2013 still preferred Pandora’s free streaming service” (Statistics and Facts, 2015). Additionally, Pandora has the highest brand awareness (75%) and the highest monthly usage (45%). Pandora’s user base consists mostly of a younger audience (54%) who listened to the service in the past month. Concerning older demographics, 12% of the 55+ age group listened to Pandora in the past month (Peoples, 2015). Finally, Pandora drives consumer loyalty better than any other online music service. “According to a recent study by IFPI, Pandora is the Source: fool.com
  • 31. Jamie Huggins IMC 613 — Week 9 31 number one station in 14 of the top 15 local radio markets in the United States” (Guarente, 2014). iHeartRadio iHeartRadio has 11% of the market share and over 60 million registered users. To date, iHeartRadio’s app has been downloaded at least 500 million times (Knight, 2015). “iHeartRadio ranks third in brand awareness (59%) and second in usage (17%)” (Peoples, 2015). Additionally, their user base mainly consists of 25-34 year olds. According to the above study completed by IFPI, iHeartRadio actually did not place on the top 8 music streaming companies for loyalty among users. iTunes Radio iTunes Radio has a 11% market share, and the service has approximately 40 million users in the United States and Australia (Kahn, 2014). “iTunes Radio climbed to second in brand awareness (72%) in fewer than two years and ranks third in brand usage (16%)” (Peoples, 2015). iTunes Radio user bases consists of a mostly younger audience (20%) who listened to iTunes Radio in the past month. Concerning other demographics, of people aged 25 to 54, 12% listened to iTunes Radio in the past month (Peoples, 2015). Concerning consumer loyalty, 92% of iTunes Radio users listen to Pandora. “The report, from investment bank Canaccord Genuity, indicates that while iTunes Radio compares favorably to Pandora's offering in fit and finish, the service lags behind in overall consumer perception thanks to poorer automated song selection. When asked to quantify the "overall experience" of both services, 66% of respondents call their experience with iTunes Radio ‘positive’ or ‘very positive,’ while Pandora scores 78% on the same metric. Apple wins with tight margins on app usability questions, but loses out to Pandora in perhaps the most important metric, ‘Plays songs I want to hear,’ 63% to 72%” (Cole, 2013). Target Market
  • 32. Jamie Huggins IMC 613 — Week 9 32 Millennials “According to ComScore and Spotify representatives, 40% of all Spotify users in the United States are between the ages of 18 and 24. Compared to the general population, Spotify users are 26% more likely to be a student, 20% more likely to be a college student, and 3.75x more likely to be a graduate student. The average Spotify listening session averages 107 minutes per day” (Biernacki, 2013). Perceptual Map In reviews about Spotify, these were some of the top words and concepts associated with the brand. Spotify seeks to position itself as easy, fun, and personal, and it appears that many of these terms exemplify those sought-after qualities. Source: variety.com FUN GREAT LOOK CREATIVE GREAT SERVICE FEATURES SPOTIFYAWESOME MUSIC EXCLUSIVE CONTENT FAST STREAMING FRIENDLY
  • 33. Jamie Huggins IMC 613 — Week 9 33 Classmate Survey During this session, 5 questions were asked to a total of 10 respondents. 6 of the respondents were female and 4 of the respondents were male. Q1: When streaming digital music, what are the top streaming services you use? Please list in the order from most to least used.  If you do not stream music digitally, share why.  Responses: From these results, it is visibly seen that Pandora is the leader in most popular streaming service — 5 of 10 respondents or 50% chose Pandora as their top streaming service. Spotify tied for second with Sirius XM, with 2 respondents saying that it was their top music 0 1.25 2.5 3.75 5 Pandora Spotify Sirius XM iHeartRadio Amazon Prime iTunes Jango Listed 1st Listed 2nd or later
  • 34. Jamie Huggins IMC 613 — Week 9 34 streaming choice. For overall responses, Pandora was the leader once again — 8 respondents out of 10 listen to Pandora. Spotify placed second with 4 respondents saying they used the service. Q2: What attributes are unique to Spotify that would make you use it over Pandora or iHeartRadio? Responses: From these results, one of Spotify’s main issues can be seen — brand awareness. 36% of respondents were unfamiliar with the brand’s attributes. This is reflective of previous statistics mentioned that other users had a lack of knowledge concerning awareness about the brand in comparison to its competitors. Those that were familiar with Spotify, ranked its top attributes building and sharing playlists, the ability for song choice, and that it offers free services. A small number of respondents favored the program’s layout and user-friendly interface. Q3: List one or two things that might keep you from using Spotify to stream music over its competitors.  Responses: 14% 7% 7% 14% 21% 36% Unfamiliar Playlists Song Choice User Friendly Layout Free
  • 35. Jamie Huggins IMC 613 — Week 9 35 From these results, it is apparent that the main fear associated with Spotify is cost. Respondents claimed that they either feared a cost increase or a mandatory subscription fee being forced upon users. Once again, brand awareness was an issue here — 18% of responders stated that they were unfamiliar with the brand and had a lack of knowledge about the Spotify brand. Other concerns raised were library reduction and Apple integration. Only one user stated that he had no concerns about the brand. Q4: Which of the following age groups do you fall under? (Optional) 9% 18% 9% 9% 55% Cost Library Reduction Prefer Apple Unfamiliar Nothing 11% 22% 67% 25-34 35-45 18-24
  • 36. Jamie Huggins IMC 613 — Week 9 36 From these results, it can be seen that the majority of the respondents (1 elected not to answer this question), were between the ages of 25-34. This falls in line with Spotify’s main target audience of millennial users. 22% of respondents were between the ages of 35-45, and 11% of respondents were between the ages of 18-24. Q5: Do you most often stream music from a desktop/laptop or a smartphone mobile app?  If you do not digitally stream music, write N/A. (Optional) Responses: From these results, it is noted that the majority of respondents (6 in total) stream music from their desktop/laptop computers, which is quite surprising given the popularity of smartphones. Only 3 respondents stated that they stream most often from their smartphones, while 1 respondent stated that he streamed most often from his personal tablet. Recommendations Overall, Spotify’s brand elements are cohesive, consistent, and aesthetically pleasing. However, Spotify’s marketing efforts have fallen short in the areas of brand awareness and overall market share. If Spotify truly seeks to increase its market share to 14% and its overall Tablet Smartphone Desktop/Laptop 0 1.5 3 4.5 6 Region 1
  • 37. Jamie Huggins IMC 613 — Week 9 37 brand awareness to 60%, it will have to consider the following brand recommendations to better appeal to its Millennial audience. Goals To increase Spotify’s market share and brand awareness to improve overall brand equity. Objective Increase Spotify’s market share to 14% in a 12 month period. • Strategy #1: Increase Spotify’s free user base through promoting activities that drive conversions. • Tactics: From the survey results above, the #1 fear of Millennials centered around cost — either that Spotify cost or would require its free users to eventually pay for the service. Therefore, it is recommended that Spotify begin to aggressively promote activities that drive those free conversions. “For example, if Spotify user data suggests that when a Facebook friend sends a non-user a playlist, that non-user is 5x more likely to download Spotify, it needs to begin strategically encouraging that behavior and reducing the friction for that behavior, whether it is through e-mail marketing, new notifications, or better feature design — whichever method depends on what works best based on A/B testing and experimentation” (Young, 2015). • Strategy #2: Lock in more paid consumers through the use of internal analytics. • Tactics: Currently, Spotify has one of the leading free-to-paid user conversion rates of any digital music streaming service in the industry. However, if it seeks to grow and defend its market share, the brand must continue to lock in paid customers quickly. “Spotify needs to conduct a cohort analysis to segment users by behavior and develop ways to incentivize actions that lead to conversions through more personalized e-mail marketing, notifications, or promotional programs. Maybe all it
  • 38. Jamie Huggins IMC 613 — Week 9 38 takes to convert a non-paying Spotify user is adding a feature where Spotify automatically creates playlists for users based on what they listen to, or a notification reminder that gets users to download playlists to their phone for offline listening. Find the ‘A-Ha’ moments - or the behaviors that dramatically increase switching costs for users - and structure the Spotify experience around encouraging those activities” (Young, 2015). Objective Increase overall brand awareness by 60% in a 12 month period. • Strategy: Raise brand awareness among American Millennials by creating more multi- platform advertising campaigns. • Tactics: Like the brand did previously with The Voice, it is recommended that Spotify continue to launch multi-platform advertising campaigns with 30 second TV spots during episodes of popular Millennial television shows. While it is important that Spotify continues to advertise during The Voice, they could easily expand to other talent shows like American Idol. Additionally, since Spotify is seeking to expand its brand to “more than music,” it is recommended that they extend their advertisements beyond music shows as well. Some of the most popular Millennial television shows include: Empire, Scandal, The Big Bang Theory, Family Guy, The Simpsons, and How to Get Away With Murder (Consoli, 2015). Each of these shows averages millions of views per episode in the Millennial demographic, and this viewership could greatly increase brand awareness. The advertisements could also be featured on Spotify’s YouTube channel, website, app, and social media channels for a more integrated feel.
  • 39. Jamie Huggins IMC 613 — Week 9 39 References About Pandora (2015). Pandora. Retrieved September 21, 2015, from https:// www.pandora.com/about Biernacki, S. (2013, October 14). PANDORA AND SPOTIFY: WHAT ADVERTISERS NEED TO KNOW. Educational Marketing Group. Retrieved September 21, 2015, from http:// emgonline.com/blog/2013/10/pandora-and-spotify-what-advertisers-need-to-know/ Brand Identity Guidelines. (2013). ISSUU. Retrieved September 28, 2015, from http://issuu.com/ bondo/docs/spo_brandidentityguidelines_final Chaffey, D. (2015, March 30). Spotify Case Study. Smart Insights. Retrieved September 28, 2015, from http://www.smartinsights.com/digital-marketing-strategy/online-business- revenue-models/spotify-case-study/ Cole, S. (2013, October 28). 92% of iTunes Radio listeners still use Pandora, says new report. Apple Insider. Retrieved October 5, 2015, from http://appleinsider.com/articles/ 13/10/28/92-of-itunes-radio-listeners-still-use-pandora-says-new-report Consoli, J. (2015, April 1). MBPT Spotlight: The 18 Shows You Should be Advertising In To Reach Millennials. Broadcasting & Cable. Retrieved October 13, 2015, from http:// www.broadcastingcable.com/news/upfront-central/mbpt-spotlight-18-shows-you-should- be-advertising-reach-millennials/139335 Davidson, L. (2015, June 28). Apple Music 'validates' our business, says Spotify exec. Telegraph. Retrieved September 28, 2015, from http://www.telegraph.co.uk/finance/ newsbysector/mediatechnologyandtelecoms/11689459/Apple-Music-validates-our- business-says-Spotify-exec.html Ganot, R. (2015, January 18). MUSIC AND MONETIZATION: WHAT MARKETERS CAN LEARN FROM SPOTIFY’S SUCCESS. CodeFuel. Retrieved September 28, 2015, from http://www.codefuel.com/blog/music-monetization-marketers-can-learn-spotifys-success/
  • 40. Jamie Huggins IMC 613 — Week 9 40 Guarente, M. (2014, September 11). Pandora’s Out of the Box, and on Top for Loyal Listening. Loyalty360. Retrieved October 5, 2015, from http://loyalty360.org/resources/article/ pandoras-out-of-the-box-and-on-top-for-loyal-listening#sthash.8e6WeWAK.dpuf Go Premium. (2015). Spotify. Retrieved September 28, 2015, from https://www.spotify.com/us/ purchase/panel/?country=US#__main-extended-creditcard Heisler, Y. (2014, April 14). Billboard claims iTunes Radio isn't the hit Apple was hoping for. enGadget. Retrieved September 21, 2015, from http://www.engadget.com/2014/04/14/ billboard-claims-itunes-radio-isnt-the-hit-apple-was-hoping-for/ Kahn, J. (2014, May 28). Eddy Cue: Apple passed 35 billions songs sold on iTunes last week, 40 million iTunes Radio listeners. 9to5Mac. Retrieved September 21, 2015, from http:// 9to5mac.com/2014/05/28/eddy-cue-apple-passed-35-billions-songs-sold-on-itunes-last- week-40-million-itunes-radio-listeners/ Kastrenakes, J. (2013, March 28). Spotify gets serious with a new, streamlined logo. The Verge. Retrieved September 28, 2015, from http://www.theverge.com/2013/3/28/4157210/ spotify-debuts-new-logo-serious-redesign Keller, K. (2013). Strategic Brand Management: Building, Measuring, and Managing Brand Equity. (4th ed.) (pp.89-90; 115). Upper Saddle River, NJ: Prentice Hall.  Knight, S. (2015, January 23). iHeartRadio growth continues, passes 60 million registered users. TechSpot. Retrieved September 21, 2015, from http:// www.techspot.com/news/59506-iheartradio-growth-continues-passes-60-million- registered-user.html Rivington, J. (2015). Spotify Review. TechRadar. Retrieved October 5, 2015, from http:// www.techradar.com/us/reviews/pc-mac/software/utilities/other-software/spotify-526289/ review
  • 41. Jamie Huggins IMC 613 — Week 9 41 McGarry, C. (2015, May 20). Spotify turns itself into entertainment 1-stop shop with videos and podcasts. Macworld. Retrieved September 21, 2015, from http://www.macworld.com/ article/2924841/spotify-turns-itself-into-entertainment-1-stop-shop-with-videos-and- podcasts.html Mitroff, S. (2012, August 3). Spotify review: The best streaming music experience you can buy. CNET. Retrieved October 5, 2015, from http://www.cnet.com/products/spotify/ Moynihan, T. (2015, May 20). Here Are All the New Features Packed Inside Spotify. Wired. Retrieved September 28, 2015, from http://www.wired.com/2015/05/new-features- packed-inside-spotify/ Number of global monthly active Spotify users from July 2012 to June 2015 (in millions). (2015). Statista. Retrieved September 21, 2015, from http://www.statista.com/statistics/367739/ spotify-global-mau/ Pandora Maintains Strong Audience Lead Over Spotify. (2015, May 14). eMarketer. Retrieved September 2, 2015 from http://www.emarketer.com/Article/Pandora-Maintains- Strong-Audience-Lead-Over-Spotify/1012476#sthash.Fuu3qOpT.dpuf Paul, I. (2015, June 10). Spotify shows off impressive growth ahead of Apple Music launch. Macworld. Retrieved September 21, 2015, from http://www.macworld.com/article/ 2934085/spotify-shows-off-impressive-growth-ahead-of-apple-music-launch.html Peoples, G. (2015, March 5). New Report Looks at U.S. Streaming, Finds Pandora the Clear Leader. Billboard. Retrieved October 5, 2015, from http://www.billboard.com/articles/ business/6494341/infinite-dial-us-music-streaming-report Playing the Social Tune. (2013, November 24). Business Today. Retrieved September 28, 2015, from http://www.businesstoday.in/magazine/lbs-case-study/london-case-study-how- spotify-evolved-its-use-of-marketing-tools/story/200269.html
  • 42. Jamie Huggins IMC 613 — Week 9 42 Shontell, A. (2015, June 6). Spotify Made A Tiny Change to Its Logo — See if You’ve Even Noticed Yet. Business Insider. Retrieved August 24, 2015, from http:// www.businessinsider.com/spotify-changes-logo-color-to-brighter-shade-of- green-2015-6#ixzz3jkckkgjE Snader, N. (2015, May 27). Why Streaming Is the Future of the Music Industry, Not Its End. The Cheat Sheet. Retrieved September 2, 2015, from http://www.cheatsheet.com/business/ why-streaming-is-the-future-of-the-music-industry-not-its-end.html/?a=viewall Spotify [Spotify]. (2011, November 30). Spotify’s mission was simple: Give people access to all the music they want all the time - in a completely legal & accessible way [Tweet]. Retrieved on September 21, 2015, from https://twitter.com/spotify/status/ 141929408763142144 SPOTIFY: THE RACE TO EXIST IN THE FUTURE OF MUSIC STREAMING. (2014, November 27). Mecink. Retrieved October 5, 2015, from http://mecink.com/2014/11/27/spotify-the- race-to-exist-in-the-future-of-music-streaming/ Spotify vs. Pandora (2014). Diffen. Retrieved September 2, 2015, from http://www.diffen.com/ difference/Pandora_vs_Spotify Statistics and facts on Pandora Media, Inc. (2015). Statista. Retrieved September 21, 2015, from http://www.statista.com/topics/1349/pandora/ Stella, R. (2015, May 8). With Grooveshark out of the picture, we pit Spotify against Pandora. Digital Trends. Retrieved September 2, 2015, from http://www.digitaltrends.com/music/ spotify-vs-pandora/2/#ixzz3kbesomMM  Terms and Conditions of Use. (2015, September 9). Spotify. Retrieved September 28, 2015, from https://www.spotify.com/us/legal/end-user-agreement/
  • 43. Jamie Huggins IMC 613 — Week 9 43 Tischler, L. (2015, March 12). Spotify Unveils A Bold New Brand Identity. Fast Company. Retrieved September 28, 2015, from http://www.fastcodesign.com/3043547/spotifys- new-look-signals-its-identity-shift The Color Green. (2015). Empower Yourself With Color Psychology. Retrieved September 28, 2015, from http://www.empower-yourself-with-color-psychology.com/color-green.html Wilkes, R. (2015, March 17). How the visual re-invention of Spotify could hold the key to fortune and fame. We-Heart. Retrieved October 5, 2015, from http://www.we-heart.com/ 2015/03/17/spotify-rebrand-collins-new-york/ Willgress, L. (2015, July 3). Music Industry Finally Reaches ‘Tipping Point’ as Massive Music Growth of Streaming Services Like Spotify Gives Sales Their Biggest Boost in Years. Daily Mail. Retrieved September 2, 2015, from http://www.dailymail.co.uk/news/ article-3148196/Music-industry-finally-reaches-tipping-point-massive-growth-streaming- services-like-Spotify-gives-sales-biggest-boost-years.html#ixzz3kbgE5jTO  Wilson, J. (2015, September 30). Spotify (for PC). PCMag. Retrieved October 5, 2015, from http://www.pcmag.com/article2/0,2817,2366868,00.asp Woods, B. (2014, October 24). How 21 big tech companies got their names. The Next Web. Retrieved September 28, 2015, from http://thenextweb.com/insider/2014/10/24/how-21- big-tech-comapnies-got-their-names/2/ Young, V. (2015, January 13). The Product Strategy Fueling Spotify's Growth To 60 Million Users. Creative Interactions. Retrieved October 13, 2015, from http:// www.createinteractions.com/designtech/2015/1/13/spotify-growth-analysis-product- strategy