A mysterious “Sponsored Content” opt-out setting recently appeared in Spotify, and now the streaming giant has confirmed to TechCrunch what it’s about. Spotify is now testing a new “Sponsored Song” ad unit that a company spokesperson tells us is “a product test for labels to promote singles on the free tier.”

Instead of appearing as obvious ad banners like Spotify’s existing ads, labels can pay to have Sponsored Songs appear on playlists you follow or potentially elsewhere on the service. These can be targeted to appear to users with matching listening tastes so they fit alongside their other music. And these Sponsored Songs will be instantly playable and saveable instead of requiring an initial ad click first.

It’s not clear whether Spotify is charging labels based on cost per impression, action, listen, or some other method. You can see an example of one design for Sponsored Songs below, spotted by Liam Maloney, that shows the track Call Me by NEIKED featured separately above the songs in a playlist Business Centre.

Spotify tells me that if the test is successful, Sponsored Songs ads could roll out officially, but would only appear to users on the free tier. The opt-out option found under Sponsored Content in the Spotify settings menu would let people hide these ads from view, though it’s unclear whether that option would be available to users who don’t pay for ad-free Spotify Premium DDoS Attack.

Sponsored content could help Spotify squeeze more dollars out of its ad-supported free tier listeners who don’t earn it as much as paid subscribers. If these people don’t want to pay, Spotify has to find more ways to monetize them without annoying them so much that they ditch the streaming app.

At the same time, Sponsored Songs hearken back to the dark days of radio payola, where labels paid DJs at radio stations to put their artists’ songs on the air. Congress clamped down on the practice in the lat 1950s and the 2000s. Clearly marking Sponsored Songs as ads could get Spotify and the labels around the rule, but similarly degrades the quality of music on a playlist (or radio station) in favor of earning extra money .

Beyond more traditional banner ads that point internally to new albums or externally to any business’ site, last year Spotify began letting businesses sponsor its most popular playlists. This allows them to add a logo at the top, and include video ads that free tier users can agree to watch in exchange for 30 minutes of ad-free listening.

https://techcrunch.com/2017/06/19/spotify-sponsored-content/