Spotify had a party-minded event in New York yesterday with music stars Vampire Weekend, Frank Ocean and Janelle Monae sharing the stage. Metallica drummer Lars Ulrich and Napster founder Sean Parker—intellectual property combatants in years past—even hugged it out. And Spotify unveiled a browser app, music discovery features, social additions and other bells and whistles.
Around 350 folks took in the eclectic mix of tunes, conversation and press-junket pageantry, drinking Coca-Colas, Brooklyn Lagers and other beverages. While Brooklyn Lager is not a Spotify advertiser, Coke’s presence as a drinks option certainly pointed to dollar signs. The Atlanta-based beverage giant last month poured some $10 million into the music-streaming platform, marking one of the bigger brand-based investments in a digital startup in recent memory.
Coke’s involvement in Spotify is notable, as the soda marketer has tested the platform's various ad units repeatedly, while also helping to launch the digital firm’s presence in Germany and Australia. Spotify has appeared on 100 million Coke bottles in Australia during the last five months, while receiving a similar on-package treatment recently in Germany.
The music upstart is now in 17 countries and goes head-to-head in the U.S. with the formidable Pandora. For its past, Coke seems to be in a music-based turf war of larger scale, battling rival Pepsi for high school and college-aged consumers. Both brands have sponsored various concert series, with Pepsi spending significant resources in the last three years at South by Southwest.
Joe Belliotti, director of global entertainment at Coke, recently told Adweek his company’s digital music investment is premised on the youth market. But Coke has been associated with music for decades, going back to classic tune-driven initiatives like “I’d Like to Teach the World to Sing.”
“Music has always been a huge part of Coke,” he said. “I think since 2008 or 2009, you've seen us ramp up from the global perspective, and I think Spotify is the next evolution of Coca-Cola music. It's going to be interesting to see how Spotify accelerates our global music strategy, and how the brand can facilitate that conversation where people discover music and share it amongst each other.”
Belliotti hinted at what’s in store for Coke and Spotify in 2013. "You are going to see Coke creating experiences on Spotify, using the technology and music content," he said. "It will involve supporting TV commercials, PR, visuals and shopper programs—a whole integrated campaign coming to life."
Jeff Levick, Sweden-based Spotify’s global ad sales chief, has led the company’s 14-month monetization march in the U.S., striking native-ad-styled deals with not only Coke but also brands like McDonald’s and Procter & Gamble. He said Spotify ads can target based on location, gender, age and preferred music genre.
“I think we do the best when brands develop content that's relevant for the platform,” Levick said. “And also when they tie in the power of combining audio and display together. These units are interesting when they work on their own. But when you connect the two, where you actually have a message in audio that drives a message on display and takes them to a place where they can do something useful, that's where we see incredibly meaningful results.”
Belliotti said he expects the Coke-Spotify relationship to grow globally next year, mainly aiding the music platform’s launch plans in new countries. Think more co-branded packaging, he suggested.
“You are marrying this virtuoso social experience with music and the physical experience of Coke,” Belliotti said. “It's unusually beneficial for Spotify to be able to leverage Coke's brand equities in the markets they expand into, but it is also hugely beneficial for Coke to bring new innovative ways to access music into those markets.”