I speak with Patrick Moran who is Global Head of Growth Marketing at Spotify. We discuss the marketing strategies Patrick and his team have used to grow Spotify. Even with strong competition in this space Spotify has grown from 57m paid users in June 2017 to 70m in Jan 2018. Patrick also used to be Head of Digital Marketing for Netflix so we dive into the strategies Netflix have used to grow past 125 million paid users today. This is a bumper episode that you won’t want to miss!!
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Last 5 questions:
What’s your best piece of marketing advice?
I’ve been successful when there has been a very true understanding of how and why our users use our product and or service. Because I think that answers really … It allows you to do three things. It allows you to bridge the gap between what’s measurable and what’s not, at least from the onset. It allows you to optimize not just for the short term, but it gives you context to optimize for the long run. Then, again, global averages versus local optimization. I think if there’s not this one very fundamental understanding of how we have your users at very specific markets and different life stages are using your product and then you’re going to be optimizing for the wrong thing. So, I think just an understanding of your users will always be for me, the truest constant within this changing landscape that we call technology.
Can you recommend a book to our listeners?
Yeah, there was this one book that Reed asked his leads team to read. It’s called The Advantage by Patrick Lencioni. I was like, “You know what, then I probably should read it.” Its been one of those things where it’s been one of those books, where I’ve actually come back to it a handful of times. It’s about organizational health and the importance of organizational alignment. That’s been quite important to me. That’s a book that I would recommend.
What software tool couldn’t you live without?
I guess the way that I also think about this question is the flip side to it. What software tool do I use every day to be productive? Here at Spotify, we are a pretty big Google shop. So, that’s Gmail, Google Docs, Google Spreadsheet, Google Presentation, Google Drive. That and Slack. Those are the tools I can’t live without.
What’s your favourite example of a marketing campaign?
I guess there’s a lot of campaigns that I’ve been exposed to, but I guess what I could do is, I could share with us my favorite campaign that I’ve worked on. I think that would have to be the first season of House of Cards. It’s because we did not know what we were doing. But I believe that that was the campaign that forced us to ask questions around how we were going to do marketing, which I would like to believe is what led, or at least was the start of what led Netflix to have the marketing machine that it has today. It was, what is the mix between branding and performance, how do we integrate with product? How does this integrate with own channels? Things of that I nature? How do we do content marketing? Should we do content marketing versus feature marketing? I think a lot of those questions were asked when we were doing House of Cards, and I think just a lot of the stuff that we did, while it wasn’t world class sexy, was certainly the fruit, or at least bore fruit into a lot of things that Netflix does today.
Which other podcasts do you listen to?
I listen to a lot of podcasts just because of the commute that I have. I would say for this audience, I would probably give two. I think one is Masters of Scale by Reid Hoffman, and the other one would be Recode Decode by Kara Swisher. I think the folks that they interview and the discussions they have are very rich. Of course, those two and the Marketing Strategies Podcast by Matt Byrom. So, I’ll say that much.
Transcription:
Matt Byrom:
Hello and welcome to this episode of The Marketing Strategies Podcast. Today I’m joined by Patrick Moran, who is Global Head of Growth Marketing at Spotify. Before working at Spotify, Patrick was Global Head of Marketing and growth for Yik Yak, he also worked in senior growth positions at TiVo, Netflix and eBay.
I’m super excited about today’s episode as usually the guest on this podcast are from B2B companies. So, this is a really great opportunity to understand how some of the world’s most disruptive consumer brands have grown and the marketing strategies they’ve used over the past few years. So, let’s dive right in. How you doing today. Patrick?
Patrick Moran:
I’m doing well. Thanks for having me Matt.
Matt Byrom:
Yeah, it’s a pleasure. It’s really nice to have you on this podcast, and appreciate you taking the time.
Patrick Moran:
Sure. There’s nothing like starting your week with the podcast. So, gets me mentally up there ready for the week. But I certainly hope that what my insight or my experiences would somewhat provide some value to your audience. But yeah, thanks for having me.
Matt Byrom:
Well, with a CV like yours, I’m sure there’s a lot of insight that you can give us. There’s nothing like the diving in at the deep end on a Monday morning when this is being recorded. So, let’s do it. To start this off, I’d like to dive back to your career at your time at Netflix, this was 2012 to 2014. I did a little bit of research and I found that in 2012, Netflix had approximately, you might tell me more accurately, but 25 million subscribers. Then in 2015, which is just shortly after you left, they had around 70 million.
Obviously, that is phenomenal growth by anybody’s standards. So, I was interested just to learn and understand, what was it like working at Netflix during this time of growth?
Patrick Moran:
It was certainly transformative, at least from my end. The thing is I joined eight months after Qwikster. I’m not sure if most folks remember what happened with Qwikster but Qwikster was essentially the separation of the DVD and streaming services that Netflix had. They looked at divided up, which happened in 2011. That cause just a lot of problems with the market and their customer base didn’t seem to respond to it fairly well.
I think that the market cap of Netflix dropped from, probably around 30 billion to about 20 billion in a matter of a few weeks. I joined eight months after that and then I joined eight months before House of Cards. So, that period was certainly pretty interesting where we were trying to hire a lot of people and nobody really wanted to come to Netflix. But by the time that I left, everybody wanted to come to Netflix. But people still reach out to me today for insights into how we did it at Netflix.
It was certainly an interesting time and I think there are a lot of things that Netflix did really well during that period. But if there’s anything that I can point to, it’s just that Reed Hastings and his leadership team essentially, picked a strategy and double down on it. I think that that’s more of what it is than anything else, and that manifested itself, not just in the content that Netflix ended up purchasing, but it also came through in a lot of the things that we were doing as an organization specifically in marketing.
Matt Byrom:
So, you say about this strategy, and they doubled down on it. Talk to me about that strategy. What was the strategy and actually, what did they do to actually identify the success and then actually double down on it?
Patrick Moran:
I think the strategy was mostly around content. I remember the saying at the time was, we wanted to be HBO, before HBO could be us. I think a lot of that came down to, okay, well, how are we going to start to differentiate ourselves from all the other platforms that were getting the same library?
That was where there was this very thorough thought process into potentially experimenting and really getting into what type of content would differentiate us from everybody else? I think that strategy lends itself to, okay, well, should we give certain producers and directors a lot of just creative leeway to be able to create the content that they need to create that would essentially become a lot more connected to the Netflix brand?
So, we essentially transitioned ourselves from a more of a service and utility company that was primarily Silicon Valley into a more global entertainment company that you know now. It’s just fascinating the way that the company’s transitioned that way.
Matt Byrom:
So, it’s really focusing on original content, I guess, to actually differentiate yourselves from the competition. So, the strategy at that time was focus on product and make yourself different from the competition by creating your own original content?
Patrick Moran:
In terms of the actual product or service, I think we were, or at least, I think for the most part, Reed was able to see that a lot of other companies were coming into the space, technically speaking. It wasn’t that difficult to create a streaming platform and to stream your own content. Then you had to then start to compete with a lot of these other entertainment companies that already had their content. From that standpoint, I think it just made more sense for the company to start to really think about, okay, well, how do we scale this globally, but at the same time, be known for who we are specifically and not just as this library of content that is an aggregate of a lot of other sources?
Matt Byrom:
How much did the marketing team have to do with the actual product team?
Patrick Moran:
Marketing was pretty instrumental, and for a lot of reasons, and it’s also where I truly learned the value of the brand or the value of brand work. We really needed to transform ourselves from this more, every day product, cancel anytime, anywhere only for $10 a month, or only for 999 a month. Into something more like, that’s a service I need to have. That’s the service I need to have because of the content that it has. And that’s the service that caters to my lifestyle because of the stories that the platform’s able to tell, compared to anything else.
So, I think from a marketing perspective, there’s just a lot of very fundamental changes because we were primarily a performance and VR Shop up until then. That doesn’t just implicate the marketing capabilities, but that also is now associated to our financial ties to the dollars that we’re spending. And it’s now then also associated with a lot of other things like creative development than the story that we wanted to sell and things of that nature.
Up until then, marketing was mostly centered on very U.S focused product education and just illustrating a breath of library. I remember buying so much inventory where we would put in 10 or 11, 12 pieces of box art on a banner and just expect clicks to come out of it versus going into true content marketing and really diving into transforming the perception of that into that of a global entertainment company.
Matt Byrom:
Talk about banner advertising and content marketing, it would be great to dive into that and understand a little bit more about, you’re basically you’re building a great product, original content and doubled down on that strategy where you were creating more and more original content. You effectively had to tell this story, which was this as a service you need to have because it’s got so many of your great shows on it that you need to be watching. How did you tell that story, and then how did you use different channels and methods such as advertising and content marketing, to actually start building that brand from there?
Patrick Moran:
I think we tested a lot of things. I think even stepping back into, okay, now we’re introducing a lot of ‘brand’ type advertising or brand type marketing. Now, how does that mix up with performance? Even from that standpoint, we were trying to figure things out. I think you just do a lot of tests to try and figure out the implications towards streams, towards our sum growth and things of that nature. Where we would do it not just within the US but we also start to dabble into how does this impact our presence in Europe or in South America?
I think for the most part, I think that’s primarily where we started. Now, we also ran into a lot of questions at the beginning. Should we be talking about our service or should we be talking primarily about our content? I still remember from the beginning where we ran a lot of these marketing campaigns around cheating for example. I thought that that was actually pretty funny where we will talk about a couple a the man would be like, “Oh well …” be a little bit surprised about the show that he’s watching and his partner would act and pretend that they were surprised. Then, at the end of the day they realized that she was actually watching ahead of him or watching a head with the shows and then they consider that she was just cheating.
So, I think we did a couple of that at the beginning but slowly realized that, with the amount of content that is out there, and with our … I wouldn’t say fairly limited budget, but with the budget that we had, we just wanted this veneer of just sophistication and this look of quality content, which is true.
Eventually, I think the company just made the decision just double down on content. At this point, I think anything you see coming out of Netflix will always focus on the content that it has more so than anything else.
Matt Byrom:
And especially if you’re spending so much money on creating original content. That’s like your gold dust. That’s the thing that you want to push, push, push really isn’t it? So, I guess that just totally makes sense. In terms of actual channels that you use, what was most successful? What did you find really worked for you in terms of actually getting that content, helping people understand what the new shows were, what they’re about and what the storylines were? How did you get those out, and what were the most effective channels for you?
Patrick Moran:
I think it’s really mostly a pretty thorough understanding of how our users we’re enjoying and using the content and why they were using the product in the first place. I think that informed a lot of our media strategies because there was really not one channel that did the heavy lifting over the course of many campaigns. There were campaigns that were a lot more social media focused. BoJack Horseman I remember where we launched this geo city’s website that was this pretend website that BoJack Horseman had or had developed and created. Because the character was based off of this ’90s has been comedy actor.
I think it really depended on the audience’s that we wanted to reach. But for the most part for me, I think the question was, what were some of the media channels that surprised me in terms of their impact? I think radio and print performance background were surprising just because at least radio-
Matt Byrom:
And on digital channels really were the most successful.
Patrick Moran:
Yeah.
Matt Byrom:
Wow, that’s interesting.
Patrick Moran:
Well, not necessarily more successful, but they were a lot more impactful than I thought they would be. Because I think when you’re buying radio, you can buy certain inventory on radio during prime time, that’s maybe not as expensive but the reach is there and you get 100% share voice and things of that nature right. I think a lot of that comes from just we also had this very heavy testing background where we weren’t afraid to try new channels just because it was fairly new, or we were given the leeway to try new things or try to use old tactics in new ways.
I don’t know that I can necessarily point to one specific channel outside of the usual suspects if it’s social, it’s urgent and so on and so forth. But there were channels, depending on the media mix that were like, “Oh, I didn’t realize that that was going to be as impactful as it was.”
Matt Byrom:
So, do you have a culture of testing at Netflix, where you would test lots of different channels and effectively see what works and experiment further from there?
Patrick Moran:
I think it was that, but I think it was mostly under the umbrella of just testing the impact of campaigns within the construct of our entire marketing campaign. There are our brand campaigns that have a start and finish, but there’s also this more, evergreen always on layer that is just persistent.
The natural understanding of that is that there is this awareness and consideration aspect of things, and then there is the performance that collects on it. As you get more sophisticated, as we got more sophisticated with it, and as it gets slightly more complex, we just realized too that to some extent, we were also driving word of mouth within our existing user base. That’s also something that that’s impacting.
We looked at a lot of that. I think one campaign after another, and after another you start to learn a few things here and there, which is why I guess the first few campaigns, at least for me, were probably the most interesting just because that’s where we were just completely getting started. We didn’t know a lot of what we were doing. But, we asked the right questions and I think for the most part, Kelly, our CMO and Reed gave us the license to try and figure it out.
Matt Byrom:
It’s great to have that leeway really, isn’t it? It’s nice to be able to just have that flexibility to test and see what works and then guide your own route really. It’s a lot of responsibility.
Patrick Moran:
Yeah. Obviously, there’s this question around, well, what’s the impact of brand? How does that impact performance? We got to a point where I remember Reed asking me, what do you think we should do to try and get some signal, or a better signal than we’ve had before? I said, “Well, the holiday’s pretty heavy for us, why don’t we shut down Canada?” He said, “Okay, go ahead.” I just couldn’t believe that he said, “Okay, go ahead.” We essentially shut down parts of our marketing in Canada and to try and get some signal.
It’s that mentality, I guess that comes back to what I was saying earlier about Netflix and doubling down on the strategy and believing in it, where they weren’t necessarily afraid. They weren’t afraid to fail and they weren’t afraid to really stick to their guns. So, I think that’s a big reason why they’ve been successful.
Matt Byrom:
What was the effect of shutting down Canada? What did you learn from that?
Patrick Moran:
We learned the impact of a lot of the above the line, especially TV and its impact onto streaming and our sub base. We learned that within the context of the holidays, one of the heavier seasons at Netflix. It certainly informed a lot of our media strategies going forward and how much we wanted to invest in above the line versus below the line.
Matt Byrom:
Would you actually see people see some advertising and start a Netflix subscription because of the advertising? Was it that direct, or was there other factors in play, was it a long sales cycle? How did that actually work for you guys?
Patrick Moran:
A lot of it comes back down to a fairly solid understanding of how our users use our product. I think having an understanding of, okay, well, this is how Netflix fits into the lives of certain people, and that’s basically a combination of behavioral data coming from product usage and qualitative data coming from surveys. I think that coupled with the behaviors that we saw after we ran TV and measured that against a market where we did not run TV, really informed how we wanted to move forward.
So, to answer your question directly, did we see a lift? Yeah, we saw a lift. Then the next question is, did we see a lift within noise, and how did we normalize for noise? We essentially normalized for noise obviously through the course of time and then through frequency and things of that nature, but we normalize for noise also by having this sort of fairly thorough understanding of user behavior. That’s how we ended up there.
Matt Byrom:
Was user signups, was that your primary metric or were focused a lot on retention or watch time as well? What would be the metrics that you guys were really measured on?
Patrick Moran:
I think all the way up until my time at Yik Yak, I was pretty much focused on registration and sign up. And I think my life pretty much revolved around the cost of what we were spending over the value of the users and then deriving some level of ROI from there. But for the most part, at least on the marketing which is not too different from any other sort of more traditional marketing organization, there was obviously this focus on the brand and its impact on not just existing users. But not just the impact on non-users, but the impact on existing users. Then performance as a way to drive more signups or more registrations.
Matt Byrom:
That’s really interesting. If we were too fast forward to the present day, you’re at Spotify now, obviously, an extremely exciting company, an extremely exciting time as well. However, Spotify to me, it seems like it’s a slightly different stage of growth. When you were at Netflix, when you joined Spotify it seems like a bit of a more mature company. Would that be fair to say?
Patrick Moran:
Well, it’s certainly matured over the last few years, and especially over the last few months since we’ve gone public. But it is interesting because I think there’s a lot of things that we’re still figuring out here that we also were trying to figure out back in 2012 at Netflix. Its been fascinating to me, and I’ve been extremely fortunate to be a part of a company that one, I truly love using. I love using the service.
But the other thing too is that there are a lot of parallels to or a lot of similarities to what we were going through at Netflix when I started. There’s a bit of fortune telling I guess that I’ve been a little bit of a part of, and being able to slightly predict the challenges that we may be facing. So, that’s been great at least from my perspective.
Matt Byrom:
It still seems that you’ve got plenty of growth in your pocket from what I can say. I’ve got some numbers. Again, I’m almost judging you on the time that you join, to the time that you leave companies here. When you joined Spotify, there was around 57 million users based on a chart that I’ve seen in June 2017, and actually January 2018. The latest which I got which is 70 million. So, 57 million to 70 million and obviously, that’s still a huge growth in percentage terms, especially when you start to take into account the new companies that have come into the market; Apple Music and Amazon and the like.
What are you seeing as the main drivers for growth at the moment at Spotify?
Patrick Moran:
The main driver like anything is core product value. I think as a result of that, we’ve found a fairly solid fit within the market. We don’t just find that in Western or English speaking countries, but we found that to be true in a lot of countries around the world.
I think that’s been the core of what’s been causing a lot of this growth. I think it’s just, for the most part, people love music and that’s what we’re known for. I think the algorithms and the playlist that we’ve been able to create are so personalized that it adds a certain level of value to users that they didn’t necessarily have before, or necessarily couldn’t find as quickly or assessing and listening before. I think for the most part that’s what’s driven the value of Spotify over the last few years.
Matt Byrom:
Similarly to the question I asked about Netflix, does Spotify marketing team and the Spotify product team work really closely together? It seems that they’re very closely aligned.
Patrick Moran:
It’s a good question. And I think that’s one of the things that I’m looking to do, is establish a pretty close and a lot more of an integrated partnership between the marketing and the product teams. I think as I transition myself from more of an acquisition marketer into this ‘growth marketer’, I think the success of my role and then really the successful of what we do within marketing in a large part is very much dependent on its aligned and integrated objectives with our product team. Specifically our growth team and then our platforms team.
I think we’re strong there, but like anything else, the product evolves, the market evolves, and as all of these things evolve, our integration just becomes that much more necessary?
Matt Byrom:
Absolutely. I did a podcast just the other day a couple of weeks ago, actually with a guy called Val from Revolut. If you haven’t heard of them, they’re like a Challenger Bank, particularly in the UK I think. Offering foreign exchange as well. But really, really interesting is that they just actually passed the 1 billion valuation. Got 250 million dollars of investment. He says, he’s part of the marketing team, they don’t do a lot of marketing. The whole marketing ethos is really focused around building a product that just people love and will recommend to their family and friends and other people. And most of their businesses from word of mouth.
I think more and more these days, it’s like software apps and pieces of software that we use, apps and software is more and more dominated by a product focus to just make something that people love using so much so that they go and tell their friends and family. Is that more where you’re trying to get to? You’re already kind of there on the product side, but you’re trying to align the marketing team further with internally just to make that even stronger.
Patrick Moran:
It’s a great point, and I think there’s two answers, or at least two points that I want to make within the context of what you just said. I think Scott Galloway in his interview with Kara Swisher and [inaudible 00:23:12] actually said something to the effect of, gone are the days where you’ll feel a lot more patriotic if you drink this beer or where the advertising will essentially take care of the brand of the product. Where now I think product is basically the new black is I think how he says it.
You see companies like Uber and when they started and Airbnb when they started, or even Instagram and Facebook where they are able to delineate themselves from advertising and truly have their platform become their marketing arm. I think that’s a fairly solid delineation that a lot of companies have now picked up. I think it’s a fairly strong one because you’re seeing more and more of that because the other thing too is that a lot of users will tend to gravitate towards what they trust and what they believe.
With advertising, I think users are wary of what they hear a lot. So, they will take advertising within the context of what they truly believe about your brand. So, I think that there’s that. But I think the second point within Spotify is that that’s already happening. So, our word of mouth is actually fairly strong. And we’re seeing that even in countries that we’re not in.
So, I think that part for the most part, we are obviously trying to fuel. And I think there are a lot of features within the product, and as the product evolves, I think we’re going to possibly see more of that where we’re looking to fuel a lot more organic growth.
On top of that, the way that I see marketing is essentially the amplification of that. I think there’s two things; one is the amplification of that, but two, as the space gets so much more crowded with services like Apple Music and Amazon and internationally, there’s Visa and Jux, and a lot of these other companies. There is going to be this competition to get to the user first. That’s where the marketing comes in. But the other thing too, at least on the growth side, is to not just understand how to get them to users first, but to also get the users to experience the value of the product as quickly and as often as possible before they do that with other services.
That’s where you begin to build the barriers and start to build them loyalty. I think that’s where marketing starts to fit in.
Matt Byrom:
Yeah, so people start to feel ingrained within your product. Like it’s almost a difficulty to leave and try something different, for example?
Patrick Moran:
Yeah, and I think that’s what we try to do getting or having gotten into growth, it’s really defining how users flow in and out of the product. But then layered on top of that having a fairly solid understanding of intervention points by when to communicate to your users or non-users for that matter, and get them to the surface. And get them to experience the value of the product. If we can retain users, the better, right?
Matt Byrom:
Absolutely. The less people leaving the better. We definitely agree there. In terms of marketing and new customer acquisition, what’s really moving the needle for you at the moment? What other successful channels and strategies that you’re using at Spotify to make the difference and bring new users on board?
Patrick Moran:
Just having a fairly solid understanding of who our existing users are, why they love the product, how they use the product, and then being able to figure out how to best reach audiences who look like those audiences. Or best reach audiences who are not users that will look like those existing users.
Again, that could span many different channels and many different strategies. But I think that fundamental understanding needs to exist.
Matt Byrom:
So, you’re profile and segment your user base and perhaps then go out and find people that look like these audiences and market to them in that similar way that you see the patterns of that profile of using your service. Is that right?
Patrick Moran:
Yeah. I think having a true understanding of how and why your users use the product is fundamentally important. That informs a lot of things. One of the things that it informs is how to communicate to people who are not using your service. Whether they’re non users or past users.
Matt Byrom:
To actually reach those people, what channels do you find the most effective?
Patrick Moran:
Obviously, organic word of mouth is a pretty large driver. But I don’t see the answer to that question, at least for Spotify is really that much different from I would imagine any other consumer company where one, obviously it depends on the market, and then two it depends on cost. Three, it depends on audience behavior.
That can be very different for different markets. It could be mostly digital online and brand placements online in one market at a particular point in time, and it could TV. And above the line, radio in other markets at different points in time. If anything, if there’s any … I guess I’ve learned over the last 15 years there’s no silver bullet in a lot of these situations at least from what I found.
Matt Byrom:
So, it’s just a case of obviously, a big consumer brand like Spotify, it’s just a case of being in the relevant channels at the right time for the right audiences. When people are there, effectively when your audience is there, you want to be there too as does everybody I suppose. But that is the general marketing strategy?
Patrick Moran:
Yeah. Again, I think it also comes back down to at least talking about the acquisition side, it comes back also down to well, what is the true mix between things that are happening all the time. Just to evergreen our performance marketing, how does that mix in with campaigns that have a certain end date? Even that fundamental question is something that we’re trying to answer. I think we’re getting better at it.
But that in itself informs what channels and what message and timing and then all of these other things too.
Matt Byrom:
You test these different channels effectively to understand the cost of acquiring users in the different channels, I imagine that’s a core focus for your team is to make sure that you’re coming in under the lifetime value of a typical customer?
Patrick Moran:
Yeah. For the most part, I think the testing or at least the discipline is certainly there, and we’re evolving and getting better at it. I think one of the things that that I’ve been trying to do is to get a lot more exposure into how the product teams test their initiatives just because I think they’re just a lot more evolved in terms of process and iterations and all these other things.
So, I guess organizationally, that’s also one of the things that we’re looking to do. But yes, we’re constantly testing new channels. How do we further optimize existing channels through our partnerships with our agency and with these publishers, how does that work when we are looking to optimize globally versus optimizing locally? then there’s obviously a lot of message testing and things of that nature. But yeah, I think it’s something that is ongoing and we will continue to get better as these test start to take shape.
Matt Byrom:
I guess with Netflix you had the content, the original content that you guys would create, the original Netflix series and things, but at Spotify, you can’t necessarily market the music in the same way. Perhaps what content are you using to attract new users to the platform and to retain users as well?
Patrick Moran:
We do market our artists and our creators a lot. I think that’s a partnership we have very specifically with the artists that we work with. We also have a lot of our own original content that we market, and then we have the service and the product features that we market as well. Had we gotten to this Netflix answer that we are going to be this one thing, I think we’re getting there. I think we’ve been known for having this massive library. But, at the same time, that’s now becoming table stakes.
On the retention side, I think it’s just a matter of now trying to figure out if you will, when are the right points within the user journey to try and get them either back into the service or get them to experience the service in a way that they need to, in order to build this habitual behavior on Spotify? That’s al. So, it’s a mix of content and feature usage.
Matt Byrom:
When you built strategies around when to re-contact people, or when to send people the relevant messages about new content or content that might be of interest for example, to keep them hooked in. Do you then test the different timeframes or all these different things that might actually determine when people see messages from Spotify?
Patrick Moran:
I think if anything, there’s really four users that we look at a lot more closely than others I guess. I would say people who aren’t using the product, people who are new, people who’ve left, and people who use our product fairly sporadically. I think each of those cohorts has its own strategy.
Again, it comes back down to one, an understanding of why they left in the first place, why it doesn’t fit or there are expectations that we didn’t meet? Were there things that we were seeing in the acquisition front that they didn’t necessarily get the experience how once they were on the product. Where are there things based off of their cohorts that we can better understand that will get them to at least try something new. That’s where it becomes a little bit more complicated.
But we spend a lot of time trying to figure out a few things; one, what is the best way to communicate to them, to users who who’ve left, or who use our products fairly sporadically? There’s a lot of different ways to do that. Two, is it economically feasible, and three, does it work? If it doesn’t work, I think it’s one thing to bring a user back and increase monthly active usage, but it’s another thing to bring them back and actually keep them there. I think those are two very separate things.
For the most part, where we try to at least optimize for, is that when they come back, that they actually stay as opposed to us propping up short term metrics just to-
Matt Byrom:
For vanity, I guess.
Patrick Moran:
At first, trying to short lead and trying to gain the system.
Matt Byrom:
Yeah, for long term value. It’s that process automated, or is that something where you’d have your customer success team actually supporting various users to try and bring them back on board? How does that work?
Patrick Moran:
We’re still building a lot of that out, right. I think we’re still building the triggers, a lot of the triggers are very much built off of a few things. One is the strength of our internal platforms, and what the platforms are capable of doing. But the other thing too is just the intelligence of what we have, and then how our users behave.
It’s one thing to build for global scale, but then it’s another thing to start to optimize for local importance, or local value. We’re getting there, and I don’t know that we will ever get to a point where everything is automated, but like anything, I think it’s like an evolution.
Matt Byrom:
As always, it’s always going to be the way. I guess if we take this out to a broad scale, again, what are the marketing strategies and what are the things that you’re going to be focusing on for the next six months here, the remainder of 2018? What’s important for you over the next few weeks and months, what are you focusing on?
Patrick Moran:
Having a fairly strong partnership with our product team, I think is very important. Especially as we start to really consider the strength of retention and how that impacts our numbers. The other thing that we’re talking about is evolving the platforms, and evolving the way that we think about how we run experiments, what we want to learn from them, and how we want to double down on what we learn.
I think the third thing is, again, another thing that we were talking about, which is, okay, it’s one thing to look at the US or the UK and a lot of the Western countries and be able to build things or build marketing activities around those markets. But truly, the growth of Spotify is going to come from markets that are outside of that. So, I think one of the questions that we’re looking to face is how do we structure ourselves to get better at that?
Matt Byrom:
Sounds like a good focus, and it certainly sounds like you’re going to be busy there as well. In terms of to the point three, we haven’t really discussed all that much. Just a quick question around that, how did you see that working? Is that a case of actually the growth of the business as people, so you’re actually going to set up more different locations to actually build growth in different countries and regions? Is that how that would work, or is that effectively pushing more marketing in those areas or I guess a combination?
Patrick Moran:
Yeah, and I think that’s why the integration with the product teams and with the other teams at Spotify become that much more important. Because ultimately, at the end of the day, what you’re trying to do is you’re trying to build a global capability, and then you’re trying to then localize that.
But the problem is, we can’t create global capabilities for all the markets that we have. There needs to be a very strong partnership between the global capabilities, or in this case, marketing our product and our regional capabilities, and our presence within the market.
We have offices in very specific regions that are run by folks who work from those regions. I think, just a very solid partnership with them would allow us to get there. I think it’s going to be very important. So, the operational model is definitely a part of it. I think we’re slowly getting there because I think we’re at a different phase at Spotify.
But the other thing too, is, again, these capabilities that we’re building for global growth that we eventually will need to localize to some extent. That’s how we’re thinking about things.
Matt Byrom:
Excellent. That sounds fantastic. It’s been an absolute pleasure talking to you. I’m going to bring this around to our last five questions, which is five quick-fire questions. Number one is, what’s your best piece of marketing advice?
Patrick Moran:
I’ve been successful when there has been a very true understanding of how and why our users use our product and or service. Because I think that answers really … It allows you to do three things. It allows you to bridge the gap between what’s measurable and what’s not, at least from the onset. It allows you to optimize not just for the short term, but it gives you context to optimize for the long run. Then, again, global averages versus local optimization. I think if there’s not this one very fundamental understanding of how we have your users at very specific markets and different life stages are using your product and then you’re going to be optimizing for the wrong thing.
So, I think just an understanding of your users will always be for me, the truest constant within this changing landscape that we call technology.
Matt Byrom:
I agree. I guess the way that you reach people can always change, but as long as you’ve got a really good handle on your customers, who they are, and what they want, and how you’re solving that need for them, that’s what’s really important.
Patrick Moran:
Yeah. The channels change, the tactics change, the product changes. Getting there is just persistent understanding of why users are using your product, and how they’re using it, and how it fits into their lives. That for me, is always a starting point into trying to determine how to effectively market.
Matt Byrom:
Absolutely. Number two, can you recommend a book to our listeners?
Patrick Moran:
Yeah, there was this one book that Reed asked his leads team to read. It’s called The Advantage by Patrick Lencioni. I was like, “You know what, then I probably should read it.” Its been one of those things where it’s been one of those books, where I’ve actually come back to it a handful of times. It’s about organizational health and the importance of organizational alignment. That’s been quite important to me. That’s a book that I would recommend.
Matt Byrom:
That’s a great bit of insight as well as the book, it’s a great bit of insight into, Reed Hastings and the culture at Netflix as well. So, I appreciate that. And then for anybody listening, I’ll put a link to that book on the show notes page, which you’ll find at Matt Byrom.com as well. Number three, what software tool could you not live without?
Patrick Moran:
I guess the way that I also think about this question is the flip side to it. What software tool do I use every day to be productive? Here at Spotify, we are a pretty big Google shop. So, that’s Gmail, Google Docs, Google Spreadsheet, Google Presentation, Google Drive. That and Slack. Maybe three, that Slack and probably [inaudible 00:40:03] Those are the tools I can’t live without.
Matt Byrom:
All good software. We’re big Gsuite fans as well ourselves as well. Number four is, what’s your favorite example of a marketing campaign?
Patrick Moran:
I guess there’s a lot of campaigns that I’ve been exposed to, but I guess what I could do is, I could share with us my favorite campaign that I’ve worked on. I think that would have to be the first season of House of Cards. It’s because we did not know what we were doing. But I believe that that was the campaign that forced us to ask questions around how we were going to do marketing, which I would like to believe is what led, or at least was the start of what led Netflix to have the marketing machine that it has today. It was, what is the mix between branding and performance, how do we integrate with product? How does this integrate with own channels? Things of that I nature? How do we do content marketing? Should we do content marketing versus feature marketing?
I think a lot of those questions were asked when we were doing House of Cards, and I think just a lot of the stuff that we did, while it wasn’t world class sexy, was certainly the fruit, or at least bore fruit into a lot of things that Netflix does today.
Matt Byrom:
Then I guess House of Cards really helps you see an explosion in how successful original content could be for Netflix?
Patrick Moran:
Yeah. It was pretty interesting because it took a while before that picked up traction. It wasn’t immediate. We launched it I think during Obama’s inauguration, and the first week in February. We only really started to see traction in March and April. So, there was a lot of, at least from my end, there was a lot of, was this working? Is what we’re doing worth it? It was a great learning time at least for me.
Matt Byrom:
Amazing. My final question of our last five is, which other podcasts do you listen to?
Patrick Moran:
I listen to a lot of podcasts just because of the commute that I have. I would say for this audience, I would probably give two. I think one is Masters of Scale by Reid Hoffman, and the other one would be Recode Decode by Kara Swisher. I think the folks that they interview and the discussions they have are very rich.
Of course, those two fall under the Marketing Strategies Podcast by Matt Byrom. So, I’ll say that much.
Matt Byrom:
It’s a great third one. Thanks for taking it. The other two are fantastic. I have and do listen to both of those as well so, great choices. Well, Patrick, it’s been an absolute pleasure to have you on today. Its been lovely talking to you. Gained a bunch of insights. I know there’s a ton more we could be speaking about, but it’s been an absolute pleasure to have you on today. I really appreciate your time. So, thank you very much.
Patrick Moran:
Thank you.
