CULTURAL REBIRTH: Themselves and the Rapidly Changing World There Are Commonalities Between Millennials MILLENNIALS and GEN Zs DRIVE a MORE INCLUSIVE Around Them

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00 ADS.SPOTIFY.COM CULTURE NEXT 2021 VOLUME 3 CULTURAL REBIRTH: themselves and the rapidly changing world There are commonalities between millennials MILLENNIALS AND GEN Zs DRIVE A MORE INCLUSIVE around them. Without school and and Zs that came to light in our research too. Both generations are pushing for a more AND CONNECTED CULTURAL LANDSCAPE face-to-face time with friends, they’ve reported more feelings of loneliness over inclusive, multi-faceted culture. Millennials and Gen Zs agreed that as a culture, we’re By: Dawn Ostroff the course of the pandemic. The good news? Music and podcasts have helped: more open to hearing from diverse voices Chief Content & Advertising Business Officer, Spotify 66% of Gen Zs said audio helped them feel than ever before: 53% said they’ve sought less alone over the last year.3 more content from more diverse creators 5 If 2020 was a “cultural wake-up call,” as landscape. This year’s report includes a and podcasts in the past year. our Culture Next research found last year,1 range of voices from around the world, with Millennials, meanwhile, faced a different 2021 is shaping up to be a cultural rebirth. the addition of a few new markets across set of challenges. As this generation This year’s Culture Next examines two Southeast Asia, the United Arab Emirates, advances in their careers and starts different generations navigating a common The COVID-19 pandemic has upended and Japan. And while we found similarities families of their own, the pandemic has challenge: rebuilding culture from the our idea of “normalcy.” An ongoing in how both generations are shaping shaken up their expectations of work-life ground up. And on Spotify, they’re not just global movement for racial justice culture, we’ve also zeroed in on some balance. Audio has emerged as the go-to listening — they’re creating, discovering continues to challenge the status quo distinct differences. source for millennials to connect with (and revisiting), building communities, and and fuel social change. With this as the family, stay informed, and indulge in “me passing the mic to voices that have been backdrop, we spoke with Gen Zs (ages It’s been quite a year for Gen Z, a time.” Smart speakers, for example, have traditionally overlooked. Read on for a look 15-25) and millennials (ages 26-40) to generation now on the edge of newfound emerged as a household must-have for into their changing habits and tastes, and understand the biggest shifts in how independence. With traditional markers of millennial parents to entertain their kids even more ways advertisers can engage both generations are creating, curating, adulthood (like hanging out with friends — and give them a break from screens. with them, learn from them, and create in and experiencing culture. unsupervised, attending college in person, On a personal level, millennials have collaboration with them. or starting their first post-grad jobs) on reported strong emotional connections One thing is certain: Audio is playing pause, Zs are eager to leave virtual events with their favourite podcast hosts. In fact, a major part in this cultural rebirth. behind and resume IRL experiences. For they’re more likely than Gen Zs to say That’s why this latest edition of Culture example, we found that millennials are that podcast hosts sometimes feel like Next includes three new chapters: more likely than Zs to say they’ll continue a friend.4 And with more years behind Listeners, Creators, and Advertisers. In attending virtual concerts after the them, millennials are more likely to favour Scan by going to Search on Spotify this report, we explore how millennials’ pandemic is over.2 Our global research also nostalgic content (think playlists devoted and clicking on the to the sounds of decades past, country and Gen Zs’ distinct perspectives (and revealed that Gen Zs are still searching Button inevitable overlaps) are shaping the audio for connection and meaning — about music, and more).

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CHAPTER 03: ADVERTISERS TABLE OF The most important cultural shifts for marketers to understand. 21 AFFINITY-HOODS: CONTENTS Similarities among young consumers lie in shared cultural passions, not demographic targeting. CHAPTER 01: LISTENERS 24 Audio is playing a major role in young people’s lives REMOTE CONNECTIONS: Brands are adapting to reach a new consumer whose lifestyle has 03 SOUND ESCAPE: radically shifted. Millennials and Gen Zs explore all the ways digital audio 27 offers comfort and connection. WORKING WITH SPOTIFY ADVERTISING: Reach your audience through digital audio campaigns that are 06 BLURRED LIVES: contextual, immersive, relevant, and original. Sound is blurring the lines between tangible and virtual, fact and fiction, and more.

09 SYMBIOTIC CREATION: Collaborations are changing the sound of culture. METHODOLOGY CHAPTER 02: CREATORS Creators are shaping culture through music and podcasts For this issue of Culture Next, Spotify conducted a combination of qualitative, quantitative, and first-party data analysis, looking at Gen Zs (15-25) and 12 THE “IT” SOURCE: millennials (26-40). We partnered with youth culture agency Archrival to conduct four Zoom focus groups, 40 in-depth interviews, and a dozen ethnographies, Audio has become the “it” source of information and ultimately speaking with more than four dozen respondents around the globe, entertainment for a new generation. in the United States, Canada, Mexico, Brazil, Spain, Italy, France, Germany, the United Kingdom, India, Indonesia, Singapore, the Philippines, Japan, Australia, 15 NEW VOICES: and the United Arab Emirates. We conducted additional in-depth interviews with Millennial and Gen Z creators are amplifying advertising and audio industry thought leaders. underrepresented viewpoints and vibes. We also fielded a global quantitative survey via Lucid among 9,000 respondents 18 GENERATION CURATION: in April 2021 (500 respondents per market — in all the previously mentioned Curation is a critical part of how culture is being markets, as well as Thailand and Malaysia). Findings were additionally grounded shaped today. in Spotify’s unique Streaming Intelligence and first-party data.

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LISTENERS: Trend No. 1

Sound Escape As the impact of digital content on our well-being becomes increasingly clear, millennials and Zs are journeying toward a more fulfilling and balanced media diet. For millennials, that means seeking comfort in nostalgic sounds. For Zs, it’s all about offsetting their digitally saturated lives. Whether it’s diving into a true crime podcast, getting hyped with a pop playlist, or soothing themselves with ambient sound (or even — gasp — silence), both generations are exploring all the ways audio can enrich their lives.

Nestor, 31, Atlanta

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Sound Escape MILLENNIALS — WITH MORE YEARS BEHIND THEM — HAVE FINDING BALANCE ESPECIALLY LEANED ON NOSTALGIC PLAYLISTS From doomscrolling to bingeing, unhealthy tech habits FOR RELIEF DURING are the norm for both millennials and Gen Zs — especially THE PANDEMIC: during a pandemic. With so much bad news and so few ways to escape, zoning out can feel like the only recourse. Respondents from both generations told us they feel that IN INDIA, THEY audio of all forms encourages them to tune in to themselves, STREAMED ‘80S HITS to each other, and to the outside world. 195% MORE, AND ‘70S LOVE SONGS 44% MORE WATCH BETWEEN MARCH 2021 Click or scan 8 AND THE YEAR PRIOR. to check out 87% OF Nestor’s video MILLENNIALS AND 78% OF GEN ZS IN INDIA AGREE THAT HOLISTIC MIX THEY USE AUDIO Millennial and Gen Z listeners are focused on finding the TO REDUCE THEIR right mix of content to match or make their mood — and are 6 STRESS LEVELS. moving seamlessly between all formats. Podcasts punctuate music playlists, binaural beats back up morning meditations, and throwback playlists offer a dose of comforting nostalgia. —Karamvir, 18, New Delhi

“BEFORE COVID WE WERE ALL SO OCCUPIED WITH ALL THE THINGS GOING ON IN OUR DAILY LIVES, AND WE NEVER REALLY GOT TO DISCOVER THINGS ABOUT OURSELVES. I NEVER THOUGHT I COULD LIKE SOMEONE LIKE LEWIS CAPALDI OR SAM SMITH, BUT THAT'S THE ONLY THING THAT'S ON MY 84% OF INDIAN MILLENNIALS SEE AUDIO PLAYLIST RIGHT NOW. IT JUST TOOK A LITTLE BIT OF DOWNTIME FOR ME 7 TO FIGURE IT OUT.” AS A MENTAL HEALTH RESOURCE.

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THE FOLLOWING PODCAST CATEGORIES Sound Escape What It Means SAW IMPRESSIVE INCREASES AMONG INDIA’S MILLENNIAL AND GEN Z UNIQUE For Brands 9 USERS IN Q1 2021 COMPARED TO Q1 2020.* DIY *AVERAGE PODCAST LISTENERSHIP IN INDIA INCREASED 271% AMONG MILLENNIALS AND 312% AMONG ZS

As millennials and Zs are incorporating WELLNESS audio into their self-care routines, brands have an opportunity to become MENU a part of their daily practices through Spotify Advertising.

Among Gen Zs, audio isn’t GO WITH THE FLOW considered just entertainment Listeners are more receptive when — it’s an integral part of their messaging matches their mood. DIY wellness menu. Zs the Consider millennials’ nostalgic listening Gen Z experience and lean into contextual world over are tuning into targeting to match their vibe. specific auditory experiences to self-regulate, manifest, and ALIGN WITH COMFORTING CONTENT heal, whether through positive- Musical repetition creates positive thinking podcasts, ambient Millennial 909% 612% 415% 359% associations as the more we hear something, the more we like it. Sponsor sound, or even silence. On Repeat, a personalised playlist filled MENTAL ALTERNATIVE with the songs you can’t get enough of HEALTH HEALTH right now to increase positive sentiment for your brand. 80% ESCAPE THROUGH EDUCATION OF INDIAN GEN ZS Podcasts are a portal to a cool, new kind of school. Create custom podcast FEEL “MORE midrolls that deliver short knowledge CENTERED AND drops to listeners to increase their GENERALLY HAPPIER” curiosity and nourish their brain. Align 327% 254% 306% 270% with self-help podcast shows such as WHEN LISTENING The Ranveer Show, a Spotify Exclusive, TO THEIR FAVORITE SPIRITUALITY SELF-HELP to tap into listeners who are in a learning MUSIC ON A DAILY state of mind. BASIS.10

SOURCE: Spotify First Party Data, 0005 ADS.SPOTIFY.COM Q1 2021 vs. Q1 2020 CULTURE NEXT 2021 Global Trends Report VOLUME 3

Kat, 26, Toronto

LISTENERS: Trend No. 2

Blurred Lives Millennials and Gen Zs are increasingly immersed in a mixed reality that blurs the lines between tangible and virtual, straddles fact and fiction, and brings audiences “together” at a distance. And while Gen Zs are eager to resume IRL experiences, millennials are OK with continuing to attend virtual events. These new modes of navigating real and virtual worlds — and everything in between — are being driven by the most immersive of our senses: sound.

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“BECAUSE OF SOCIAL MEDIA AND ALL THE DISTRACTIONS WE HAVE VISUALLY, WE ARE REALLY DESENSITISED. BUT DEMOCRATISED AUDIO IS ONE PERSISTING THING. AUDIO HAS THAT UNIQUE ABILITY TO LIVE EXPERIENCES LITERALLY GET INSIDE YOU.” For musicians and music fans, immersive virtual worlds became a critical

—Kat, 26, Toronto tether as live shows paused: 68% of millennials and Gen Zs globally “attended” a virtual experience in the last year.11 Looking forward, millennials in India were much more likely than Zs to say they plan to continue attending virtual concerts after the pandemic is over (77% vs. 51%), since they’re cheaper and more convenient than real-life experiences.12

AMONG MILLENNIALS IN INDIA:13

WOULD RATHER CONNECT 25% WOULD RATHER CONNECT WITH LOCAL MUSIC FANS WITH OTHER MUSIC FANS OF OF AN ARTIST YOU LIKE VIA AN ARTIST YOU LIKE FROM AN IRL CONCERT AROUND THE WORLD VIA A LIVESTREAMED CONCERT Blurred Lives 75% REALITY SHIFTING

While audio soundtracks have long figuratively transported listeners to new places, audio-first immersions became more literal as millennials and Gen Zs sought to escape the same OF INDIAN MILLENNIALS FEEL four walls, city blocks, and social pods they’ve been stuck with for over a year. THAT AUDIO IS THE MOST 83% IMMERSIVE FORM OF MEDIA.14

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Blurred Lives “LISTENING TO [K-POP What It Means SINGER] LUNA WHILE For Brands AUDIO IMMERSIONS I PLAY GIVES ME AN ACTUAL PHYSICAL For both millennial and Z gamers, immersion into alternate REACTION. SHE OPENS Audio allows brands to be a part of both realities is somewhat routine. However, their appetite physical and virtual realities. for hybrid real-virtual experiences is driving new content UP THE FLOODGATES TO preferences. Gamers are increasingly experimenting with BE WHATEVER I FEEL LIKE TAKE THEM TO ANOTHER DIMENSION swapping in different soundtracks as a way to refresh their BEING AND MAKES MARIO Leverage 3D audio to immerse listeners in an experiences. In fact, among avid gamers globally, 65% of authentic virtual listening environment, creating a dynamic and sensory experience. Achieve millennials and 56% of Gen Zs agree that curating their music KART FEEL SUPER SPARKLY.” undivided attention for your brand through choices while gaming is important.15 —Kat, 26, Toronto soundscapes that take Zs on a journey from near and far to left and right. For instance, Volkswagen used 3D audio to mimic the brand’s UP lane assist safety feature that alerts drivers when they veer left or right of centre.

TIME SPENT THINK ABOUT INTERESTS, STREAMING SPOTIFY NOT DEMOGRAPHICS For a long time, “gamers” was shorthand for VIA GAMING young and male. But as of 2019, 44% of total CONSOLES INCREASED global Spotify Free gamers are female.17 Get in with gamers through the content they crave by 54% IN INDIA BETWEEN sponsoring their top playlists such as Top Gaming 16 Tracks, or by crafting customised experiences Q1 2021 AND Q1 2020. such as what Intel did in India. We created a digital experience with Marvel characters to showcase the power that Intel processors enable for gamers.

REACH A NEW LEVEL Gamers are focused on scoring when they’re deep in play mode, but they also use time spent gaming to learn and discover new WATCH things, from podcasts to playlists. Take your Click or scan targeting to the next level by reaching gamers to check out of both generations in real time while they’re Kat’s video soundtracking their gaming with Spotify.

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LISTENERS: Trend No. 3

Symbiotic Creation

With the influence of social media (especially for Zs), collaborations between musicians, podcasters, audiences, and brands are changing the sound of culture from the inside out. Fan communities have been especially beneficial for Gen Zs through the pandemic, helping them form bonds over shared passions.

–Sophia, 17, Whittier, CA

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—Sophia, 17, Whittier, CA “SOCIAL MEDIA HAS CREATED A COMMUNITY FOR MUSIC LOVERS OF EVERY GENRE YOU CAN IMAGINE. FAN COMMUNITIES PEOPLE GIVE RECOMMENDATIONS OR Psychologists say being a part of a fan community is good for mental and ASK FOR RECOMMENDATIONS, AND emotional health, especially among teens, as it creates a sense of belonging WE ALL GROW OUR MUSIC TASTES.” and identity.18 Beyond sharing music, young people in India banded together during the COVID-19 crisis by sharing information about where to access vaccines through the Telegram app.19

WHERE INDIAN GEN ZS ARE MOST LIKELY TO HAVE DISCOVERED A NEW MUSIC ARTIST:21 WATCH Click or scan to check out 9 10 Sophia’s video 8 7

Symbiotic Creation 6 1

THE NEW 42% 5 OF GEN Z HITMAKERS SPOTIFY USERS IN INDIA SAID 4 Gen Zs — who grew up on the internet — came THEY’VE HEARD 2 of age reposting, remixing, and reproducing A SONG ON 3 culture. To them, everything is ripe for some SOCIAL MEDIA inspired rearranging, including audio. Armed with 1) 39% SOCIAL MEDIA 6) 7% FROM AN ARTIST I ALREADY KNOW / LISTEN TO social media, young listeners now play an active AND THEN 2) 11% FROM A FRIEND 7) 5% ON A CURATED PLAYLIST role in amplifying new artists, co-creating songs, SEARCHED FOR 3) 11% RECOMMENDED THROUGH and forming powerful global communities that IT ON SPOTIFY.20 A STREAMING APP OR SERVICE 8) 5% NONE OF THESE make tomorrow’s hits. 4) 9% A MOVIE OR TV SHOW 9) 3% FROM A FAMILY MEMBER 5) 9% AN AUDIO AD ON A STREAMING PLATFORM / SERVICE 10) 2% ON THE RADIO

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What It Means Symbiotic Creation For Brands REMAKING THE Gen Zs and millennials are not just consumers, they’re creators. Pull back the curtain and SOUND OF CULTURE give your audience a backstage pass to your brand’s creative process — and the With creators more accessible than ever, both opportunity to be part of it. millennial and Gen Z listeners now respond to KEEP UP WITH CULTURE IN REAL TIME musicians’ work-in-progress drafts, choose their Audio offers a unique opportunity to deeply favourite hooks, write lyrics, retitle songs, and even engage listeners using minimal production play a role in deciding which tracks get made. ​This resources. Whether you’re a Fortune 500 company or a startup, Spotify Advertising is changing how creators create. Instead of working solutions offers audio ad production, in private until they emerge with their completed including custom voiceover, allowing product, musicians and podcasters are now creative teams to produce new messages welcoming fans (and brands) into their easily and get them live quickly. creative process. BUILD CAMPAIGNS FOR COLLABORATION Foster connection with Gen Zs by including them in the creative process. For instance, Calvin Klein drove Zs to a digital experience to ask, “What do you hope for?” Once they answered with their specific dream for the AMONG AUDIO CREATORS “MUSIC IS MORE THAN JUST WORDS AND MELODIES future, they could then add one song to a collaborative playlist for that specific hope. AROUND THE GLOBE, — IT IS A LANGUAGE THAT SURPASSES BOUNDARIES AND LIMITS, UNITING PEOPLE IN A MANNER THAT'S MILLENNIALS WERE MORE BRING MILLENNIALS BACK TO UNBREAKABLY UNIQUE. FOR ME IT'S THIS LANGUAGE THE BEGINNING LIKELY THAN GEN ZS TO SAY THAT BUILDS A BOND WITH MY FANS, WHO ARE Before it reaches the masses, every hit song THAT RECEIVING FEEDBACK MORE LIKE MY FAMILY, HELPING ME SAIL THROUGH begins as a simple idea — and great products HIGHS AND LOWS — WITH THEIR SUPPORT, LOVE AND are built in a similar fashion. Create custom FROM FANS OR FOLLOWERS podcast midrolls that start with a fact about MOTIVATION. I CHERISH THESE RELATIONSHIPS BUILT your brand (the original name, a description IS PART OF THEIR CREATIVE OVER MILES, AND I SHALL CONTINUE TO PUT MY BEST of the garage/basement where a prototype 22 FOOT FORWARD, TO ENSURE THEY HOLD THEIR HEAD was made, etc.) and discuss how the spark of PROCESS (76% VS. 65%). UP HIGH WITH PRIDE, AS ARMAANIANS.” an idea led to the finished product.

—Music artist Alexander 23 1100 ADS.SPOTIFY.COM CULTURE NEXT 2021 Global Trends Report VOLUME 3

Wil, host of SUPERHUMAN

CREATORS: Trend No. 1

The “It” Source Podcast creators are fast becoming the front page, the 6 o’clock news, the silver screen, and the classroom for a new generation of “cord nevers” — Gen Zs who already turn to their phones as their primary news source. As for millennials, they’re still tuning into their favourite shows (and hosts) for credible information about the world around them.

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The “It” Source “LOVE AAJ KAL IS AUTHENTIC. IT’S AUDIO JUST FIRESIDE CHATS, UNHINGED, UNEDITED, AUTHORITY NON-PR VETTED. THOSE KINDS OF Millennials’ and Gen Zs’ trust in traditional societal institutions, from politics to religion to media, is lower than ever.23 At the THINGS FLY BECAUSE same time, many young people are placing more trust in a EVERYTHING ELSE IN medium they feel brings them closer to the “capital T truth”: THE CONTENT SPHERE WATCH audio. Podcasters have emerged as a refreshing class of creators IS SO CURATED, VETTED, that feel authentic, accessible, and — above all — trustworthy, Click or scan even in the midst of widespread skepticism. AND SANITISED.” to check out Wil’s video

—Ankit Vengurlekar, co-host of the podcast Love Aaj Kal with Aastha & Ankit

OF INDIAN ZS IDENTIFY AS “CORD NEVERS,” WHO HAVE NEVER USED 24 RAW, REAL, RELATABLE 8% TRADITIONAL CABLE TV. Unlike traditional broadcasters, who rarely go off-script, audio creators often reveal their vulnerable and raw “real” selves — which listeners are more likely to feel intimately connected with. The intimate connection forged between audio creators and OF MILLENNIALS BELIEVE THE listeners is a gold mine for brands. Podcasts have proven to be a ACTUAL VOICES OF PODCAST HOSTS uniquely effective ads environment: 41% of all global listeners say 78% they trust ads more if they hear them during a podcast and 81% 25 CAN MAKE OR BREAK A PODCAST. report that they’ve taken an action after hearing a podcast ad.26

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The “It” Source What It Means INTIMATE PROXIMITY For Brands

Once viewed as niche, podcasting is now so mainstream The intimate nature of podcasts makes them that leaders in nearly every cultural arena — from gaming an ideal medium for advertisers to reach engaged listeners. Both Host-Read and Voice and humour, to politics, sports, youth culture, and beyond Talent ads help advertisers connect with — are using the medium to forge deeper connections. podcast listeners, drive significant mid-funnel And well-known Gen Z creators are also now attracting lift, and win over new audiences. younger listeners to the audio medium. ENGAGE EMOTIONALLY WITH MILLENNIALS THROUGH PODCAST HOSTS Host-Read ads show a significant increase in emotional connection compared to Voice Talent ads, because they lean on the trust a listener has to that host. That emotional trust makes Host-Read ads ideal for introducing a new brand or product for the first time.

DRIVE AWARENESS AND SCALE WITH VOICE TALENT ADS We found that Voice Talent ads under 30 “READING A NEWSPAPER seconds produce significant lifts across metrics. To scale your podcast buy, run Voice ARTICLE OR A TV Talent ads across Spotify Audience Network PROGRAMME, YOU DON’T to reach engaged listeners both on and off KNOW WHICH WRITER HAS Spotify in a highly targeted way. WRITTEN WHAT, AND IT’S ALL KEEP IT CONVERSATIONAL Whether you’re running scripted Host-Read Gen Z social media influencers GONE THROUGH AN EDITOR. ads or Voice Talent ads, podcast ads should are increasingly creating their own WITH AN AUDIO CREATOR, reflect how people talk in real life. Focus on podcasts: Indian influencer and digital YOU KNOW WHERE THE what sounds natural to the listener in order to content creator Ranveer Allahbadia achieve the authenticity and relatability that runs the very successful podcast The OPINION IS COMING FROM, your audience expects. Ranveer Show, exclusive to Spotify. —Max, 15, Petersfield, U.K.

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Nina, 37, Compton, LA

CREATORS: Trend No. 2

New Voices Millennials and Gen Zs crave representation. That’s why creators from both generations are now bypassing traditional gatekeepers of culture to uplift voices and viewpoints that have been historically underrepresented by mainstream media. ​

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New Voices AMONG INDIAN MILLENNIALS / GEN ZS:27 AMPLIFYING Millennials Gen Z UNDERHEARD 65% OF INDIAN GEN PERSPECTIVES ZS BELIEVE THEY 82% 63% 85% 66% HAVE MORE A wave of new audio creators has been swept to the FREEDOM TO BE forefront of culture by the convergence of affordable AGREE THAT AS A CULTURE BELIEVE THEY’RE digital tools and platforms, and the conviction that their THEIR AUTHENTIC WE'RE MORE OPEN TO BUILDING A MORE songs and stories have been left out of culture for far HEARING DIVERSE VOICES EQUITABLE SOCIETY SELVES THAN THAN EVER BEFORE too long. Through audio, millennial and Gen Z creators PREVIOUS are finding a medium ready to embrace projects that 29 represent and empower them and their communities. GENERATIONS. 78% 63%

Spotify’s podcast recording and distribution software Anchor helped creators launch more than BELIEVE THEY’RE BUILDING A “BETTER NORMAL” OUT 1 million new podcasts in 2020, OF THE PANDEMIC and the number of Anchor-licensed shows grew by 210% between March 2020 and March 2021.28 DEMOCRATISED CREATION

—Nina, 37, Compton, CA Unlike some visual media, which require expensive equipment, formal education, or large crews, audio creators face a lower barrier to entry and thus less intrinsic bias. This access and ease is “WITH AUDIO, THERE’S JUST SO MUCH MORE especially essential for Gen Zs, who are most likely to be producing and promoting themselves. FREEDOM. I GOT A PHONE, I GOT A MIC, WE Zs even conceived bedroom pop, a music genre known for its indie creative process. GOT A CAMERA — LET’S GO.”

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New Voices “THIS PAST YEAR, What It Means SPECIFICALLY, I’VE FELT For Brands REPRESENTATION, MORE REPRESENTATION IN AUDIO THAN IN ANY FINALLY! OTHER INDUSTRY. I’VE Zs are the most racially and culturally diverse HEARD MORE NARRATIVES generation yet, and they expect brands to For both younger millennials and Gen Zs especially, the rise of THAT I CAN RELATE TO reflect, represent, and empower them through new voices in the audio space has meant seeing — or hearing their campaigns, talent partnerships, and participation in social justice movements. — themselves represented (finally!). As voices behind the mic AND HEARD FROM MORE become increasingly diverse, the audio medium is resonating BIPOC ARTISTS.” SHAKE IT UP WITH NEW SOUNDS with a wider audience — the fruits of which are already starting Zs love discovering new voices, music, and brands. Reach Zs who are already in the to change the industry. In fact, in the U.S. market, podcast —Andrés, 24, Mexico City discovery mindset by sponsoring playlists listeners who are Black, Latinx, Asian, or who self-identify as such as New Music Friday or Discover some “Other” race all surpassed growth among white listeners, Weekly, which celebrate finding fresh music according to Nielsen.30 that you haven’t heard before.

AMPLIFY THE CONVERSATION Align your brand with podcast shows that promote representation in audio. Spotify 76% OF partnered with Higher Ground, a production company formed by the Obamas, to produce MILLENNIALS powerful stories that entertain, inform, and AND 58% OF inspire, and to lift up new, diverse voices in the entertainment industry. Salesforce, and Procter GEN ZS IN INDIA & Gamble brands Dawn and Tide, served as SAID THEY’VE the first season’s presenting sponsors forThe SOUGHT MORE Michelle Obama Podcast, a Spotify Original.

CONTENT FROM PASS THE MIC MORE DIVERSE Give underrepresented artists the stage CREATORS AND to share your brand message in their own way. For instance, Cinnamon Toast Crunch PODCASTS IN partnered with Cuco, an emerging Latinx THE LAST YEAR.31 artist, to create custom audio and video spots that share the inspiring ways he continued to grow his music career and live life to the fullest despite challenging times in 2020.

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Music artist glaive, 16

CREATORS: Trend No. 3 Generation Curation For millennial and Gen Z creators, cultural curation has emerged as an essential pillar of artistic expression. Where cultural curation helps Zs carve out their artistic identity, millennial creators curate to keep their audiences interested. With the power to forge connections, set emotional tones, and even launch careers, curation is a critical part of how culture is being shaped today.

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Generation Curation “THE INTERNET AND POP CULTURE The hyperpop music genre pulls HAVE PLAYED A VERY IMPORTANT in sounds from every corner of ROLE IN SHAPING MY WORLDVIEW culture. Among Gen Z listeners in CURATION IS AS AN ARTIST. THERE WAS, AND India, Spotify’s hyperpop playlist grew by an impressive 175% THERE ALWAYS IS, A LOT OF among Gen Z listeners between CREATION INSPIRATION TO GARNER, DIGEST Q1 of 2020 and 2021.33 Digitally-native Zs especially are thoroughly accustomed AND USE. THAT'S THE THING WITH Gen Z-focused playlist Lorem to curating their lives and identities. Among Gen Z audio OUR NEW AGE WORLD TODAY — AT is so eclectic its name is a Latin creators today, curation has become much more than just TIMES IT'S A GIFT THAT SILENTLY OR word used as a placeholder. aggregation; it’s become creation, pure and simple — and LOUDLY KEEPS ON GIVING, AND FOR Total global followers of Spotify’s young creators are tapping its generative power as a form Lorem playlist increased 43% THIS, I'LL BE FOREVER GRATEFUL.” 34 of artistic expression. between Q1 2020 and Q1 2021.

—Music artist Zaeden CURATED INPUT, FRESH OUTPUT

Curation is now directly affecting the creative output of millennial and Z audio creators. Whereas a decade ago artists may have stayed in their lanes and continued to make music according to what they’re already known for or good at, young artists today craft new sounds by regularly pulling from different genres, sounds, cultures, and more.

WATCH OF GLOBAL GEN Z CREATORS FEEL THAT DIGITAL Click or scan TECHNOLOGY MAKES IT EASIER THAN EVER to check out TO BE A CULTURAL CURATOR.32 Edouard’s video 64%

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Generation Curation What It Means CURATING “FOR ME, For Brands

CONNECTION CURATION IS Brands can join in on cultural curation through Spotify’s playlist ecosystem: While playlists have been around for well over a decade, it’s only branded playlists, editorial playlists, and been in recent years that audio creators have fully embraced ABSOLUTELY user-generated playlists. them as a platform for showcasing their own curatorial chops. PAIR YOUR PRODUCT WITH A PLAYLIST Playlist curation has been especially embraced by millennial Branded playlists provide an opportunity to creators as a way to ensure their place in cultural conversations CREATION.” engage and entertain your audience through the by highlighting favourite tracks, citing influences, and more. music they love. The best branded playlists are supported with a robust marketing strategy. For —Edouard, 33, Paris instance, M&M’s brought back their limited-time Messages packaging, which featured Spotify Codes to match their messages to branded playlists. Scanning a M&M’s pack that says “Slay Girl” opened an M&M’s playlist of songs by powerful female artists.

TARGET MOMENTS CURATED BY ZS No matter what’s happening beyond our headphones, playlists reflect it. Leverage user- generated playlist targeting to reach Zs when they’re listening to playlists they’ve curated for specific contexts, moods, or activities, and match your creative messaging to the moment.

EXTEND EXISTING TALENT PARTNERSHIPS Treat your talent like the tastemakers they are. 67% For instance, to promote the filmOnce Upon OF GLOBAL MILLENNIAL A Time… In Hollywood, Columbia Pictures teamed up with Spotify to take over the TV & CREATORS SAID THEY Movies hub. Director Quentin Tarantino guest- FEEL MORE PRESSURE curated the Spotify editorial playlist Film & THAN EVER TO BE A TV Favourites and voiced audio annotations 35 to give fans exclusive content throughout the CULTURAL CURATOR. playlist.

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ADVERTISERS: Trend No. 1

Affinity-hoods Gen Zs have undone the neat demographic segmentation of marketing past. No longer defined by age, race, gender, or geography, the similarities among young consumers lie in shared cultural tendencies and passions.

–Karamvir, 18, New Delhi

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AUDIO IS A RICH SPACE FOR REACHING AUDIENCES THROUGH THE CULTURE THEY LOVE: 83% OF MILLENNIALS AND 70% OF GEN ZS IN INDIA BELIEVE THAT STREAMING PLATFORMS AT- AFFINITY MOVEMENTS LARGE, INCLUDING AUDIO, HAVE SIGNIFICANTLY SHAPED HOW THEY DISCOVER AND CONNECT WITH BROADER CULTURE.36 —AND MOMENTS

Global affinity communities are actually easier for brands to connect with than the monolithic demographic segments that informed marketers in decades past. After all, cultural affinities are transparent — both for millennials, who have driven the mass adoption of social media, and Gen Zs, who were born into a world shaped by the internet. We often see a spike in community-focused streaming pop up around key moments in culture, from Diwali to Pride to International Women’s Day. AMONG INDIAN MILLENNIALS AND GEN ZS:37

75% Gen Z HAVE USED MUSIC AS A WAY TO LEARN ABOUT CULTURES AND EXPERIENCES THAT 67% DIFFER FROM THEIR OWN

Affinity-hoods Millennial COMMON CHORDS 78% HAVE BECOME A PART OF A GLOBAL COMMUNITY BECAUSE OF EITHER MUSIC Young consumers can’t be boxed in — to genre, geography, 55% OR PODCASTS language, or any other passive identifier. Their communities are formed around what really matters: cultural affinities, e.g. shared cultural passions or interests, no matter how niche. For marketers, this has sparked new, innovative 74% HAVE MADE A FRIEND WHO LIVES IN approaches for reaching increasingly fragmented consumer ANOTHER COUNTRY BECAUSE OF EITHER groups of Gen Zs and millennials. 51% MUSIC OR PODCASTS

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What It Means Affinity-hoods For Brands CULTURAL To authentically align with millennials and Zs, brands should focus on surrounding GENTRIFICATION the music and podcasts that represent their passions. Millennials and Zs aren’t just trying to be cultural voyeurs — they’re looking to participate in the cultural zeitgeist on a deep, authentic TAP INTO GENRES IN A NEW WAY level. With this in mind, brands should consider how to not only Whether they’re streaming Ann Arbor connect listeners to like-minded communities, but also help them indie or Polish trap, Zs consider far-flung microgenres as close to home. dive deep into the cultural contexts simmering beneath the surface. Sponsor one of our genreless playlists, such as POLLEN or Oyster, or leverage microgenre targeting by creating audio —Karamvir, 18, New Delhi spots in the same musical style of their favourite microgenres. “I ALWAYS TRY TO UNDERSTAND THE CONTEXT BEHIND MUSIC, SAY GOODBYE TO GENDER NORMS THE STORY BEHIND MUSIC.” Millennials and Zs dispel the misconceptions about what a woman is supposed to behave like, specialise in, or even what they’re supposed to listen to (hint: it’s way more than just lifestyle content!). Through custom podcast midrolls, show how your brand 74% OF MILLENNIALS is breaking barriers for women by AND 50% OF GEN ZS IN debunking myths that have been making the rounds in your brand’s industry. INDIA BELIEVE LISTENING BE PART OF CULTURE ON SPOTIFY TO MUSIC WITHOUT Cultural Affinity Targeting is a way to THE BACKGROUND target users based on their intentional KNOWLEDGE OF THE interactions with content around various WATCH cultural moments — primarily tied to the hubs we have in-platform. Reach listeners CULTURE IT CAME FROM Click or scan during moments and themes throughout 38 to check out IS PROBLEMATIC. the year that drive cultural conversations. Karamvir’s video

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ADVERTISERS: Trend No. 2

Remote Connections

With millennials’ work lives, parenting strategies, habits, and behaviours scrambled by the pandemic, brands are having to adapt to reach a new consumer whose lifestyle has radically shifted.

Travis, 33, Dubai

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Remote Connections “ THE CAR, THE HOME. THESE THE ABNORMAL NOW ARE THE KILLER PLATFORMS FOR After more than a year of lockdowns, life for many is still centred LISTENING… THE around one single location: home. As a result, we’ve seen an increase INFRASTRUCTURE in listening to audio through connected home-based devices in India, HAS BEEN BUILT including gaming consoles (+54%), desktop computers (+153%), smart speakers (+361%), and TVs (+178%).39 In India, we’ve even seen OUT TO ENABLE a 2,115% increase in in-car listening on Spotify over the last year, as THE NEXT drivers take their social pods on the road.40 GENERATION OF WATCH 2,115% DIGITAL AUDIO Click or scan TO FLOURISH.” to check out Travis’ video MILLENNIALS AND GEN ZS IN INDIA STREAMED AUDIO 42 ON SPOTIFY THROUGH —Jay Richman, Spotify’s Head of Global Ads Business and Platform, on theWharton Tech Toks podcast CONNECTED DEVICES MORE OFTEN IN Q1 2021 THAN IN Q1 2020:43

361% CONNECTED 178% 153% 135% 54% COMMUNITY

IN-CAR SMART DESKTOP WEARABLE GAMING At a time when 75% of Indian millennials say their community or SPEAKERS TVS COMPUTERS DEVICES CONSOLES social outlet has grown smaller due to the pandemic (compared with 52% of Indian Gen Zs),44 connected devices are helping people 43% OF INDIAN MILLENNIALS SAID THEY’VE feel more, well, connected. That’s true of their brand connections SEEN FEWER ADS THAN THEY WOULD IN A too. Audio ads, which reach listeners wherever they are, have TYPICAL YEAR, WHILE 47% SAID THEY’VE HAD become an innovative way to reach homebound consumers. FEWER BRAND INTERACTIONS.41

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Remote Connections What It Means “WE’VE FOUND For Brands “HEY SPOTIFY!” THAT AUDIO As millennials look inward, making their homes their safe Here at Spotify, we’re invested in pushing PLATFORMS ARE havens, Spotify continues to be a primary platform for innovation at the forefront of interaction EVOLVING, AND connecting with friends, family, podcast hosts, and brands. and connectivity. Our new voice-controlled MATCH THE CALL TO ACTION TO HOW YOUR AUDIENCE experience, “Hey Spotify,” allows listeners to LISTENS spark up, navigate, and search for music and IT GIVES THE When your audience is listening through connected devices podcasts — without ever using their hands. The such as speakers, game consoles, or even in-car, they’re ADVERTISER A most likely pairing their streaming with another activity. result is a custom interactive experience, fit for If they can’t reach their mobile device while cooking for a the new realities of juggling work, life, family, LOT OF SPACE TO crowd, consider another way to encourage a response. For personal goals, and more, all in a given moment. instance, Oasis, a Coca-Cola brand in the U.K., ran audio spots whose CTA simply asked listeners to buy more of their GROW AS WELL.” soft drinks — so the brand could advertise less.

BRING LISTENERS TOGETHER THROUGH YOUR BRAND —Aviv Bar Oz, Offline Media Manager at Monday.com Position your brand as the center of connection for listeners, whether you’re the technology they use for online study groups or virtual hang-outs, or if you’re the product that’s a must-have for IRL interactions. For instance, using the power of Spotify API, Spotify built a custom site 69% for Mondelez to promote Cadbury Silk, their premium chocolate bar, where users could choose a message to OF INDIAN send to their loved one. Based on users’ inputs, they would MILLENNIALS SAID get a playlist — but it was no ordinary playlist. The initials of the songs in each playlist made up the chosen message, THEY LIKE AUDIO which made the message sweet (yet secret) and lent ADVERTISING BECAUSE uniqueness to the execution. THEY CAN USE THEIR ALIGN YOUR BRAND WITH AUTHENTIC IMAGINATION TO PODCAST PERSONALITIES PICTURE EVERYTHING As millennials’ social bubbles grew smaller in the IN THEIR HEAD.45 pandemic, listeners’ connection with their favourite podcasts grew stronger. Leverage that trust and connection that listeners have with podcast hosts through unscripted endorsement reads.

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Working With Spotify Advertising

At a time when the digital marketing landscape is more saturated than ever, how do advertisers harness these trends to reach their target audiences?

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Working With Spotify Advertising

At Spotify, we believe that digital audio offers brands something unique: intimate connection with listeners as they stream what they love, on a platform that elevates the world’s most beloved creators alongside emerging up-and-comers. We’re constantly working on new ways to deepen that connection, with tools to create digital audio campaigns that are contextual, deep, relevant, and original. In fact, our advertising vision here at Spotify is to connect millions of advertisers with billions of listeners. Here’s how you can work with us to reach your audience.

VISIT Click or scan to learn more at ads.spotify.com

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Working With Spotify Advertising BE HEARD IN THE MOMENT

Our ad formats are made to engage. That way, listeners get a great experience and advertisers get better results. Spotify’s Streaming Intelligence enables advertisers to understand listeners’ moods, mindsets, habits, and tastes — all in the moment. Brands can offer motivating messages to listeners while they work out, be an entertaining companion while they cook dinner, and match the vibe at party time. Interest targeting allows brands to reach relevant audiences based on topics they’re passionate about, whether it be history, gaming, or literature. And genre targeting helps brands introduce themselves to new listeners by connecting with them through beloved categories from New Age to EDM to Folk. With Spotify, ads connect when, how, and where it makes sense for audiences — resulting in optimal impact for advertisers. Learn even more on ads.spotify.com.

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1 Spotify Culture Next survey, Global, among 5,500 respondents, January 2020; 2-6, 8-13, 16, 18, 21, 22, 24, 26, 27, 30, 31, 32, 35, 36, 38, 39 Spotify Culture Next survey, Global, among 9,000 respondents 15-40, April 2021; 7, 14, 23, 28, 29, 33, 34 Spotify Culture Next survey - 2021;7, 14, 23, 28, 29, 33, 34 Spotify First Party Data, Q1 2021 vs. Q1 2020; 15 GlobalWebIndex 2019, Spotify Free Users, Global;19 2021 Edelman Trust Barometer Survey, December 2020; 17 “Psychologists Say That Belonging To A Fandom Is Amazing For Your Mental Health,” Teen Vogue, July 2017; 20 Spotify & Crowd DNA, “We’re All Ears,” US, 2018; 25 Nielsen Ad Format Study, December 2020; 37 “Ep.8 — The Future of Audio: Spotify Supercharging Creator Tools and Ad Tech,” Wharton Tech Talks, April 2021

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