Spotify is currently in the process of testing a new service change that would allow its free users to skip all advertisements, having confirmed the move in a statement given to AdAge earlier this week. The experiment is only live in Australia as of right now and it's presently unclear how long may Spotify test it before possibly expanding it to other countries. Spotify partner solutions chief Danielle Lee likened the platform's advertising revamp to its Discover Weekly service designed to deliver a personal listening experience, clarifying that the main idea behind the change is to allow users to only listen to ads that they're actually interested in.
Data about ad skips would also be used to improve Spotify's targeting mechanisms, i.e. better the efficiency of its ads, though it's still unclear whether that information would be available to advertisers seeing how the vast majority of users are likely to skip all ads. The experimental version of the new functionality comes with no limits of any kind, with users being able to skip as many ads as they want, wherever they want, regardless of their audio streaming device of choice. Even if Spotify was able to significantly improve the accuracy of its ad targeting algorithms with the change, the move is still likely to impact its near-term revenue, hence reflecting on its stock which has mostly been rising since its early April debut at $132 and concluded Friday trading at NYSE at over $189.
The development comes shortly after Spotify stopped using audio advertising platform AdsWizz in July, having attributed the move to the fact that the service was bought by one of its largest rivals – Pandora. The latter paid $145 million for AdsWizz in May as part of an effort to diversify its portfolio while still remaining true to its core product ambitions. Spotify itself scored a major deal earlier this week after announcing a comprehensive content partnership with Samsung.