"If you're not paying for the product, you are the product."
This is the common adage thrown around today to describe the free services we have built our online identities around. Facebook, Twitter, Google, all of these services have a massive wealth of user data that can be analyzed, dissected and presented to advertisers. It is no secret; targeted advertising keeps the lights on for a majority of the companies we know and love.
Now, add another one to this list.
The world's most popular music streaming service, Spotify, announced that they are now selling demographic and playlist data to third-party buyers for the purpose of targeted advertising. They are calling it "programmatic buying" but it is just their fancy term for offering age, gender, geography and music preferences and habit data to advertisers for more efficient ad reach.
This means the 70 million Spotify users in 59 markets who use the app for free will start hearing and seeing ads based on what "behavioral segment" they belong to. Combined with other third-party data that's available for advertisers, such as interests and shopping behaviors, Spotify touts that based on these segments, ads will be more timely and relevant to the user.
Currently, they are bidding out :15- and :30-second audio spots for their mobile platform in real time. These spots will then grant access to the first-party user data they have collected so ad buyers will be able to choose what behavioral segment best suits their product.