_Spotify Media Budget

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MEDIA BUDGET ADV 350 - Advertising Media Planning and Strategy Sec 004 Phoebe Tran

SPENDING ADVERTISEMENT Page 02

Page 03 AD SPENDING AD SPENDING In 2020, Spotify's advertising was nearly 1.6 billion euros, accounting for roughly 23% of the company's total revenue (Spotify - Financials, n.d.) Spotify's sales and marketing account for roughly 26% of the total operating expenses (Spotify - Financials, n.d.) Spotify invests heavily in digital advertising, including programmatic and social media advertising David Kirkpatrick Contributing Editor. (2016) Spotify launched several high-profile advertising campaigns in 2022, including its "2022 Wrapped" campaign.

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COMPETITORS COMPETITORS Amazon Music Amazon Music is also a big spender, with under $100 million in advertising in digital, print, and national TV. Invest in premium ad units and advertised on over 250 different Media Properties (Amazon Music, n.d.) Apple Music Apple Music was the largest spender on advertising among music streaming services (spent < $100M on ads in the past year, using premium units and > 100 media properties across various formats.) (Apple Music, n.d.) Page 04 AD SPENDING AD SPENDING

$20 MILLIONS 25% September 15% October 20% November BUDGET BUDGET MONTH MONTH MONTH CAMPAIGN CAMPAIGN CAMPAIGN 40% December

OBJECTIVE AND TASK OBJECTIVE AND TASK METHOD METHOD Page 06 Method is useful when the primary goal of the campaign is to achieve specific objectives: increasing brand awareness and audience usage Breaking down the campaign objectives into specific tasks and estimating the cost of each task can create a more accurate and data-driven media budget.

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SALES PROMOTION Running a sales promotion of 6 months free Premium for 4 months can cost about $1 million dollars SOCIAL MEDIA Cost for a hashtag campaign, influencer marketing, content running, social media ads, programmatic buying, etc: $3 million dollars. INTERACTIVE FEATURES Programming new interactive features for the app and maintaining it for 4 months should cost $5 million dollars.

TASKS TASKS Page 08 Cost of video production: $12,500 ((HOW MUCH DOES a 30 SECOND TV COMMERCIAL COST?, n.d.) Cost of Ad Placement: Youtube, Hulu, Netflix, Facebook, Tiktok, National TV, National Radio: $4 million dollars CONTENT VIDEO OOH ADVERTISING (AdQuick, n.d.) Bus Ad: $2 million dollars for 4 months in Billboards Ad: $5 million dollars for 4 months in different big cities throughout the countries

RATES OOH Advertising Influencer Marketing Social Media CPM Facebook: $7.19 CPM Instagram: $7.91 CPM YouTube: $9.68 CPM Twitter: $6.46 CPM Pinterest: $30 per CPM TikTok: $10 Interactive Experiences Cost per Engagement (CPE): $0.10-$0.50 Cost per Engagement (CPE): $2 (Lupis, 2023) Billboard: Cost per Thousand Impressions (CPM): $2-$5 Bus Ads: $3.86 Median CPM Page 09 POSSIBLE RATES POSSIBLE RATES POSSIBLE RATES (Berry, 2023) (AdQuick, n.d.)

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REFERENCES Spotify - Financials. (n.d.). https://investors.spotify.com/financials/default.aspx#quarterly-results David Kirkpatrick Contributing Editor. (2016, February 12). Spotify to invest heavily in programmatic. Marketing Dive. https://www.marketingdive.com/news/spotify-to-invest-heavily-in-programmatic/413791/ Apple Music. (n.d.). Advertising Profile | See Their Ad Spend! | MediaRadar. https://advertisers.mediaradar.com/apple-music advertising- profile#:~:text=They%20spent%20under%20%24100%20million,new%20product%20in%20February%2C%202022. Amazon Music. (n.d.). Advertising Profile | See Their Ad Spend! | MediaRadar. https://advertisers.mediaradar.com/amazon- music-advertising-profile HOW MUCH DOES A 30 SECOND TV COMMERCIAL COST? (n.d.). Creative Humans. https://www.creativehumans.com/blog/how-much-30-second-commercial-cost AdQuick. (n.d.). Billboards: Cost, Rates, and Pricing | AdQuick. https://www.adquick.com/billboard-cost Berry, S. (2023, March 29). How Much Does Social Media Advertising Cost in 2023? WebFX. https://www.webfx.com/social- media/pricing/how-much-does-social-media-advertising-cost/#average-advertising-cpm Lupis, J. (2023, February 17). Influencer Marketing Cost-per-Engagement Benchmarks. Marketing Charts. https://www.marketingcharts.com/cross-media-and-traditional/sponsorships-traditional-and-cross-channel- 228611#:~:text=On%20Instagram%2C%20average%20CPE%20is,for%20Micro%20influencers%2C%20at%20%241.43.

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