No one wants to pay more money, even for things they love.
So what’s a brand to do if they’re looking to increase prices without risking a backlash? Perhaps take a cue from Spotify, who loosely timed a recent rate increase with a massive ad campaign that underscored the service’s personalization capabilities.
“My Spotify” debuted in June in the United States, United Kingdom, Canada, Ireland, Australia, and New Zealand. It included ads across various platforms, including social spots that featured sports stars and other celebs.
For context, Spotify’s subscription rates climbed in May (for UK users) and in June (for US users).
We turned to Harris QuestBrand, a real-time brand tracking platform that’s part of the Stagwell Marketing Cloud, to see how consumer sentiment was affected over this time period, both in the UK and the US.
In early June, US Spotify consumers were informed that subscription rates were rising (they were told they’d have a one-month grace period before seeing the increase). Premium Individual plans increased from $10.99 to $11.99, while Premium Family plan rates rose from $16.99 to $19.99.
While that’s not a huge leap, price increases can leave consumers a little sour. Indeed, Spotify’s FAQ page includes the question “My plan’s price increased already recently, why are you increasing it again?” (Spotify’s rates had previously gone up in July 2023).
Interestingly, the company’s answer to this FAQ stressed “a highly personalized experience and powerful discovery tools.” These value props underpin the “My Spotify” ad campaign that coincided with the subscription rate increases.
So, did existing Spotify customers revolt en masse, enraged by the need to pay a few more dollars for streaming access to the music they love?
Nope. In fact, they either didn’t care much about the extra cost—or the personalization values stressed by the “My Spotify” ad campaign managed to soften the blow of the rate hike, leading to positive trends for the brand overall.
Consider how US consumers tracked by QuestBrand viewed Spotify’s “momentum” over this time period.
Within QuestBrand, momentum is a component of brand equity, and it reflects a brand’s perceived market position and ability to beat out competitors. (The other factors that feed into brand equity are familiarity, quality, and consideration.)
While the momentum-based sentiments of the overall US population remained fairly steady, the “My Spotify” campaign appears to have strongly resonated with a Gen Z audience.
Likewise, US Gen Z consumer sentiment tracked by QuestBrand prior to the “My Spotify” campaign (Jan 1, 2024 through June 9, 2024) and following the campaign launch (June 9 through September 30) saw an increase in attributes like “fun,” “hip,” “premium,” “bold,” and “sophisticated” being associated with Spotify.
Turning to the UK Gen Z audience, feelings regarding Spotify’s brand momentum jumped significantly pre- and post-launch of the “My Spotify” campaign.
And UK Gen Z sentiment also bumped up around attributes like “premium,” “smart,” and “classy.”
In both the US and the UK, a Spotify ad campaign touting the personalization features of the app appeared to have offset any negative feelings around a price hike that went into effect around the same time.
While it’s possible that consumers didn’t care about paying a few more bucks a month for Spotify, we’d posit that this multi-channel ad campaign served to remind consumers why they think Spotify is worth it in the first place—namely, a highly personalized, algorithmic, bespoke experience that lets them discover new music with ease.
Brands faced with the need to increase subscription rates could take a page from this playbook and consider timing price changes to an advertising campaign that underscores the brand’s value props in a direct and specific way.
