Susan “Spark” Park has an incredibly diverse career background. She’s worked in the navy, in sales, and in product. She then decided to conquer product marketing. She did that by rising through some incredible companies, starting at Google and eventually going to Spotify, which is the case study she's going to be presenting today.
Now she's the Head of Gaming Ads, Product Marketing at Facebook in London, and is managing an international team focusing on that space:
“ I'm really honored that you’re here to learn about how we at Spotify took video ads to market. Honestly, the story of this is core product marketing work. I didn’t do a lot of the work, but I helped tee up the work that can be done. At the end of the day, I think product marketing is really all about that.
For every company I've been at, being the glue across this is the most important versus just the high quality. And I hope you'll see that throughout this Go-to-Market process, and how we had to move things around.
At the end of the day, the network is so important. With every launch that I've ever worked on, I've needed my peer set both internally and externally to make it successful. And I want to show you how all of this can come together pretty well and how we thought about it throughout the whole process.
The reason why I chose the Spotify video ads launch is because this was one of the few products throughout my four years at Spotify that we helped with from inception all the way to iteration.
I was there on the product team when we came up with the idea, moved into technical launch planning, and then into Go-to-Market iterative strategy. So this is a really holistic end-to-end.
I'm not going to bore you with a Go-to-Market alpha-beta framework. Instead, I'm going to go through the tough questions that we had to answer at certain parts of the process and what that keyed in.
We're going to talk about:
- The context of what we're dealing with from a company dynamic approach.
- How we went after this market and how we wanted to think about taking this product to market.
- The results and what we wanted to drive.
The vision for Spotify ads
Today, Spotify is a beautiful, mobile-first product. But how many of you remember the old Spotify? When I joined the company in 2011/2012, Spotify was a desktop download. We only had audio ad formats, and we still have these formats today.
How it works on free is that you listen to two to three minutes, and then you get audio ad breaks. And we only had display products.
We were making about 9 million a year in revenue when I joined, which isn’t bad when you’re using your song delivery system as your ad server and Salesforce as your order management system.
They literally had three engineers, and they wanted to go big on ads and big on free. So they hired a bunch of talent from Google to come in and start thinking about how we could take this on and become a huge freemium ad platform.
We had many reasons why we wanted to have free in every market, but we knew in order to do that you had to have an ads business to sustain it.
So I came in during that massive period of change, and we had to deal with not only a huge change within our ad product, but we had to deal with a lot of consumer changes as well. We launched to mobile, and I’m going to talk about what we chose to build and why we chose to build it.
In 2012/2013, we actually got together and thought about what the vision was that we wanted this ad platform to be. We had such great executive talent like Jeff Levick and Erin Clift, who were thinking about the vision statement of what they wanted this ad platform to be. And they created such a strong B2B brand.
We wanted to be a top global ads platform driving strong revenue growth for Spotify. We also wanted to drive a consumer-first experience that would create incremental revenue for Spotify. A churned user out of Spotify means it's a user that we can't convert to premium, so we had to make sure it was something that we'd want to keep people around for.
We obviously wanted to exponentially grow revenue. And what we were seeing in 2011, 2012, and 2013 was explosive growth in mobile. All of these really fast-moving tech companies were capitalizing it, and we wanted to get into that game. But that's really hard to do.
We also wanted to future-proof our sales team to make sure that they could pivot into this new future of mobile. And we basically wanted to 10x our revenue goal. As I said, when we came in we were making 10 million a year which is pretty good, but if you're growing to be a global ads platform, you’ve got to hit more triple digits.
The subscription business is highly profitable. We were also almost like a pre-IPO revenue diversification bet, so we really wanted to get to 100 million at some point over the next three or four years.
We had a very strong vision of what we wanted to do, and we were hiring the talent to try and get us there. But what should we build? You have audio ads and display ads, but where was the market going in terms of how you could build up premium and a lot of bang for your buck? That was in video.
We were also pulling a lot of reports in terms of where the ad market was going. Everybody was going to mobile video. Everyone was trying to think about how they should enter the space and how they should push it because that’s where the money is.
The TV ad market was changing. It was fragmenting, and we had to think about how to introduce video because that’s the premium format that would drive the most CPMs or the highest money that you could get for an impression.
We knew we wanted to do mobile, and we knew we wanted to do video. But how do you put video on a listening platform?
How much time are you spending looking at Spotify versus YouTube? It's not an inherent video platform, so how do you build a video product on a platform that you actually tend to listen to, in a consumer-first-driven way?
So we did a tonne of user research, and our first hire was actually a user research company, plus our UX designers who just mocked up a bunch of demos of what a video ad experience could look like.
We got so much user research to the point where we had neutral to positive responses for ad format on Spotify, where someone would actually sit and watch it. And the only way we could do that in an innovative way was this format, which is basically a rewarded video experience.
So how this format works is that you enter into Spotify and pick a playlist that’s actually initiated when you hit shuffle play, which is a viewable moment. So it's a user-generated video ad impression. And your incentive is that if you watch the video all the way through, you get 30 minutes without ad breaks.
So if you're in the gym and you want to run for 30 minutes, or you want to bang out some work and not have some commercials interrupting you, you could get this ad format and get something back.
So we were thinking that this format, plus our non-user-generated content format, plus the user-generated action, could be our solution to driving a kickass video product that could make us a lot of money. This is all the user research, and again, we were trying to go ahead of the market.
Rewarded video on gaming was around at this point, but it wasn’t nearly as ubiquitous as it is today. So this was pretty new for it. And actually, Pandora hadn't even done anything like that yet. Pandora is a very large streaming service in the US and is predominately ad-free. Pandora was doing video but in different ways than we were.
Overcoming Go-to-Market launch challenges
So the approach when we came up with this format was, how do we want to introduce this?
Have you done or heard of the exercise from Amazon of writing your own press release? It's actually a fantastic exercise. Once you figure out what the product is and what customer group you want to go after, you write a press release of what you want the press and people to say about your product.
What does that look like? What kind of ad effectiveness do you want in there? What kind of results do you want your beta to say? What types of customers do you want to be quoted in your article? This will help you design your beta and your proposition very early, and keep your vision on the Go-to-Market to drive that forward.
It's an excellent tip we learned from Amazon. I think we did it at Google, and this is one of the first things we did at Spotify.
Regardless of that exercise and vision, once you get into the Go-to-Market pace of trying to launch a product, you get caught up very quickly in challenges.
So we're basically trying to bring a user-initiated ad format toward a reserve media platform. And it was very hard for us to figure out how much inventory we were going to have. How do we price this? What does this look like?
We were actually getting a lot of questions like this from our Head of Sales. In fact, he once referred to a format that I spent six months of my life researching and taking to clients as ‘cute.’ He said, “ I want to make sure we're not too cute with this.”
When you start hearing questions like, “How do we do this?” “How do we actually sell this?”, what you're actually seeing is waning stakeholder alignment as well as investment in the product.
So when he was asking these questions, what he was saying was, “I have doubts that my sales team could sell this format out because it might be too different.” So you should recognize that as soon as possible and change that. Our Head of Product was smart enough to notice that, and that this product was making our sales teams very nervous.
So we had to formulate a different approach to video and create something even bulkier to make sure we’d have a safer video launch.
We limited the launch to very high inventory markets. We had about five, like the US, the UK, and other places where we've been very live for a while and had a lot of inventory that we could burn through and create ad breaks and user opportunities fairly early that could help us forecast into other markets.
We packaged the inventory together and limited how much we sold. We actually sold five packages of about 10 grand each at launch for each market so that we could control supply and demand. Plus, it created this mentality of ‘these could sell out, don't you want to be in the first 10?’ This is also like an anon auction platform, so it rolls very differently as you tend to do things.
The biggest step that we took is our Head of Product actually built a complementary video product for desktop at the same time to make sure that we’d have a cross-platform experience, which is also what a lot of our advertisers had been asking for.
The other biggest takeaway from this is to listen to your sales team. If your sales team is having issues or your senior stakeholders have questions, listen to them and try to make changes to your product to make sure you align there. Because if you don't align that stakeholder support, you’ll lose funding. It's incredibly important.
So make sure you think about that and think, can we do this? Can we build complementary products to make this even stronger? And we did. We launched an additional desktop and tablet experience that isn't a rewards-based video, but just a general video product to go on these placements.
There were other very large Go-to-Market challenges. The first one was, how do we get the ad industry to treat us like a destination for video ads as a music platform? These would be the first videos that ever showed up on Spotify. We weren't treated as a video platform, so we’d have to redefine how we were showing up in the market. This wasn’t a job for us.
Then also, how do we do sales enablement with one product marketing person, my boss, and 100 salespeople across multiple offices? How do we get this done? And how do we actually get this going?
Finding success with network effects
Network effects were key here. Like I said, product marketing isn’t doing all the work, it’s lining up all the resources to get it done. And I wish I was this smart back then to know that I don't have to do all the work, but I have to be the person to make sure the work gets done in certain ways.
Internal resources
I still think Spotify has one of the best B2B branding, as well as being one of the best consumer branding businesses out there. We really leverage the brand that they’ve built over time as a strong business brand. If you guys have an asset like that, utilize it. They developed a really strong media plan for us to drive awareness across these video products with our key constituents.
Our learning and development team helped connect us to an agency that would actually help us build learning modules over a four to six-month period so that our sales teams could learn about the video ad space.
We interviewed buyers from agencies and taught them about programmatic and a lot of other things. We couldn't fly to each office to do this, but we could hire contractors to build some kickass content that people could read or watch in bite-sized times to get a better feel for what they’d be selling and how they could talk like a video seller.
Contracted resources
We contracted out to resources. We basically had a sales collateral narrative built by an expert and B2B keynotes, and we actually brought in a Go-to-Market contractor who used to work at YouTube to come in and help us in this Go-to-Market process.
You don't have to do this alone, and that's why your sales stakeholders and your business stakeholders are so important. If they believe in you and they believe in the product and where you're going, they will help you get the resources and contracting to get it done and get it done well.
External resources
I used my external resources as much as possible. We had a client advisory board, so we took the stuff to a select few of our clients, including a VP at Universal Pictures who was one of our highest advocates.
Then we used our PM and PMMs network. One of our PMs had actually worked at Hulu before, so we brought in one of his product marketing experts at Hulu to come and consult with us. She actually helped us name the products, tighten up our positioning statements, and drive legitimacy to how we talked about our product in the market.
The results of the launch
My boss put together a sizzle reel for what these products looked like and what we launched in 2014. I thought all the positioning statements were things that we had extracted from our customers over this much research, creating the pillars for our premium video product that we could hopefully get a lot of money from.
And guess what? First of all, we got the press release we were looking for. We launched around Adweek. And like I said, we had an amazing B2B and press team that really got us coverage everywhere.
Because of our strong relationships within this marketplace, we got Target, Ford, and Universal Pictures to talk about our products. It was really wonderful, and we really leveraged the core assets we had of being a well-known platform to make sure that we could make a huge blast from a marketing and media perspective.
After a couple of years, we made a lot of money. Within the first year, our diversification of revenue turned in 25%. 70-75% of what we sold was audio ads, and 25% became video. That number raised even higher the year after.
So at the point where I left, we had a lot of video and we were selling out this format as well as our video format in certain markets.
We had really strong products for the premium and niche platform that we were. We were maximizing at the time as much as we could with these viewable moments that we could take advantage of from a video perspective. “
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