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What Can Brands Learn About Data-Driven Marketing from Spotify Wrapped?  

In 2015, Spotify began releasing annual data about their listeners, including their most streamed artist and the hours spent using the app. This marketing campaign, known as Spotify Wrapped, was responsible for a 21% surge in app downloads last year and is the result of exceptional data-driven marketing. 

Spotify has access to profile information such as gender and location, due to its login credentials and IP address data. Using this information, in addition to your curated music selection, Spotify can give song recommendations and personalize the selection of advertisements and pop-ups for each listener. 

In addition to Spotify’s data gathering for music and podcast recommendations, the Spotify Wrapped campaign stands out for integrating the brand and community. Via the Premium app version of the service, listeners can find out their top five artists and songs, share within the app, and post to attached social media handles. This allows listeners to engage in personalized content and attracts new listeners to the platform. 

Data-Driven Marketing Creates Personalized Experiences 

While Spotify can use listeners’ data for a curated music selection, retail and consumer product brands can similarly leverage their data for a custom purchasing experience. Food and beverage companies like Starbucks are utilizing artificial intelligence in their mobile ordering platforms. As consumers complete an average of 90 million weekly purchases, Starbucks collects information on their frequent location, most popular orders, and what time of day the beverages are purchased. Leveraging the data acquired from their 17 million app users, Starbucks can bring seasonally appropriate and most popular items to your home page.  

In addition, Starbucks’ email service can reach its rewards members with personalized content. Members will receive emails containing coupons and offer codes for products that they frequently purchase. Transactional data for each rewards member directly impacts the items marketed to that individual.  

Big Data in Marketing to Incentivize Existing Customers 

In 2020, Wrapped increased the Daily Active Users on Spotify from 145.40 million to 146.16 million. The Wrapped campaign gives customers impetus to continue their subscription, and likewise, brands are finding new ways to increase customer loyalty. 

For example, grocery retail brand Kroger uses data collected from self-checkout machines for personalized marketing strategies. Kroger can create a profile for each customer, interpreting their frequent purchases and their household size based on their grocery choices and store location. 

One way Kroger uses this information to benefit their customers is through direct mail coupons. 80% of these coupons are redeemable for items commonly purchased by that customer, while 20% are discovery items. Discovery items are products that are adjacent or similar to the customer’s frequent purchases. The rate of return on Kroger’s coupon program is over 60% higher than the average coupon programs in similar grocery stores. 

Using Data to Attract New Customers 

Not only does Spotify Wrapped increase member engagement, but Spotify app downloads increased during the first week of December by about 100,000 in 2020. Utilizing its own data, Spotify is able to bring more customers to the service.  

Similarly, brands like Cadbury are able to use Facebook profile information to create personal advertisement campaigns to bring in new customers. During this ad run, Facebook users could interact with Cadbury content and the brand would create custom videos including photos and information shared on that individual’s public page. This campaign led to a conversion rate of 33.6%, successfully increasing the number of Cadbury customers. 

The Future of Data-Driven Marketing 

Companies can collect data on consumers’ purchase behaviors, their satisfaction with their purchase, and their engagement with the brand. Leveraging this data into a marketing tool can create brand loyalty with existing consumers and bring new customers. 

In a recent study, 76% of participants would be willing to take a short survey on a website in order to have a more personalized and curated product selection. Moving forward, brands should both utilize the data already collected and collect additional consumer data to provide custom content for new and returning customers. 

Contributions by Hannah Johnson

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Tags: Data Analytics & Insights, Data Strategy, Marketing and Media Services