Advertising and creative agency WPP has struck a global partnership with music streaming service Spotify. WPP will use its own ‘Data Alliance’ – which increasingly leverages all data from various parts of the WPP empire – and use Spotify’s proprietary data from its 100 million users across 60 markets.
A note to investors from Exane-BNP/Paribas suggests that the WPP is ahead of the game in using data. “WPP has privileged contacts with the classic GAFA [Google, Apple, Facebook and Amazon] but also a host of content and technology partners (ranging from sports rights to TV production to ad tech or data companies). The wealth of talents / capabilities / relationship a group like WPP has can’t be easily replaced, in our view,” says the bank’s note.
“It confirms the idea that there is growing value in the data generated by digital native platforms like FB, GOOG and now Spotify – leaving traditional media at risk of lagging behind: should Media company buy digital assets (data / technology)? Should they merge with distributors/telcos as per AT&T & Time Warner?”
Indeed, the bank asks that if WPP can strike this sort of deal then does Vivendi really need to buy Havas, and bring it under the same roof as Universal Music?
The bank says WPP’s operating companies will be able to receive as a first mover a vast amount of proprietary data from Spotify on its 100 million users in 60 markets: what are users listening to, what does it say in terms of mood, activity and location but also what device they use etc. – with the idea to inject all this unique data into WPP’s ability to target advertising & marketing. Some of this data will be exclusively shared with GroupM via WPP’s Data business (Lightspeed Research) such as Spotify’ internal audience segmentation.
There are other benefits to both parties, but perhaps one key element is that WPP will be Spotify’s ad-agency partner when the music service launches in new markets.