Maximizing Your Local Spotify Ad Campaign: Key Metrics for Success

Let’s say you run a local barbershop, and with the holiday season approaching, people are getting ready for events and gatherings. You’ve just launched your first Spotify ad, aiming to reach potential clients while they’re relaxing at home, listening to music or podcasts. But how do you know if your ad is hitting the right audience? Is it driving appointments?

Key Performance Indicators for Spotify Ads

KPIs (Key Performance Indicators) are the numbers that matter most for tracking the success of your ad campaign. They show you if people are haring your ad, clicking on it, and becoming customers. By analyzing them, you can optimize your ads. And these days, you don't even have to do that yourself, AI tools will give you the most important insights. You don't need to be a marketing expert anymore to run successful campaigns. All you need to do is follow the actionable steps provided by AI. However, it’s still important to understand the key metrics so you can make informed decisions.

Reach and Frequency

Reach refers to the number of unique listeners who hear your ad. Many people have goal to just read as money people as possible, but this should not be the goal as a local business. You want to reach the people in your community and make the ad relevant to them - whether that are 100 or 10.000 people.

By using Spotify’s targeting features, you can precisely aim your ad at listeners within your specific location, ensuring that your message only reaches potential local customers. For example, if you own a chiropractor’s office, you can target listeners living within a 10-mile radius of your business, making your ad far more relevant and effective.

How to Improve Reach:

1. Use Geo-Targeting: Narrow your audience by location to focus on customers who can actually visit your business. Ensure your targeting settings are precise, down to the zip code or neighborhood level.

2. Expand Targeting Gradually: If your ad isn’t reaching enough people, consider broadening your radius slightly or adjusting demographic filters, but keep the focus on nearby customers.

Frequency measures how often those unique listeners hear your ad. You want enough frequency for people to remember your business, but not so much that it becomes annoying. AI-driven optimization helps you balance frequency and reach, ensuring that your audience hears your ad enough times to recognize your brand without feeling overwhelmed. By using insights, you can find that sweet spot, making sure your ad stays top of mind without causing fatigue.

Ad Completion Rate

The ad completion rate tells you if people are listening to the whole ad, so it shows their engagement. For non-skippable ads, this number will be close to 100%. But for skippable ads, it is an important metric to understand you compelling your audio is. If a lot of listeners are dropping off early, it means your audio is not engaging enough.

How to make sure your ad completion rate is as high as possible? The steps you should take depend on where most listeners drop off. There are three possibilities:

Listeners drop off at 25%:

• Focus on the opening: The first few seconds are important. If listeners are dropping off early, it means your ad isn’t grabbing their attention. Start with a strong hook—whether it’s a bold statement, intriguing question, or an immediate focus on the listener’s needs. Also, make sure the tone (and music) align with your message and target audience.

Listeners drop off at 50%:

• Improve the midsection: If your listeners are leaving halfway through, it may mean the content loses momentum or becomes less engaging. Consider shortening this section or making it more dynamic by adding a surprising fact, a shift in tone, or a mid-ad incentive (like announcing an offer). Keep the energy consistent to maintain interest.

Listeners drop off at 75%:

• Strengthen the ending: If listeners drop off close to the end, they may not find your call-to-action (CTA) compelling enough. Make sure the CTA is clear, valuable, and delivered with urgency. Offering a special promotion or exclusive deal can encourage listeners to stay tuned until the very last second.

We want to keep improving our ad, getting closer to 100% completion every time we change the message. Make sure you keep track of the different messages you use and the results they get, so you know exactly what to change everytime.

Click-Through Rate (CTR)

CTR simply means how many listeners clicked on the link in your ad after hearing it. A high CTR means your ad is persuasive, and your call-to-action (CTA) is effectively motivating listeners to take the next step.

AI tools automatically analyze your CTR and provide real-time suggestions to improve it. AI can also help test different ad variations, allowing you to see which messages resonate best with your audience, boosting your CTR over time.

A good CTR for Spotify is about 0.06%, ideally we want to be above that. If your CTR is lower than 0.06% than means it is performing underneath the benchmark, so you have to make adjustments to improve that. Likely, you will know you need to improve your CTA in this case. Here are some actionable steps you can take to improve your CTR:

1. Personalize for Micro-Segments: Instead of trying to target everyone, create highly specific versions of your ad for different audience segments. Focus on details that matter to each group, such as tailoring the message for people who’ve previously shown interest in a specific product or service, making the ad feel directly relevant to them.

2. Use Curiosity-Driven CTAs: Move beyond generic CTAs and use ones that make your listeners curious or offer a clear benefit. For example, phrases like “See Your Custom Fit” or “Reveal a Surprise Discount” spark interest and motivate listeners to click to find out more.

3. Incorporate Interactive Elements: Ads that involve the listener can drive higher engagement. Adding elements like polls or quizzes tied to the product or service makes the ad feel more interactive, encouraging listeners to take the next step and click through to participate or get results.

4. Get Hyper-Specific with Your Message: Make your ad as specific as possible. Instead of a broad appeal like “Book Your Haircut,” try “Get a Free Hot Towel Shave This Weekend at [Your Location]” or “Exclusive Offer for First-Time Clients at Our Downtown Location.” A specific offer or detail gives people a tangible reason to click.

5. Leverage Localized FOMO (Fear of Missing Out): Instead of a generic limited-time offer, try something like “Last Chance to Book Your Appointment Before the Holiday Rush in [City Name]” or “Don’t Miss Out on [Neighborhood Event] Specials.”

6. Target Specific Pain Points: Rather than broad benefits, highlight particular pain points and solve them. If you’re targeting busy professionals, an ad like “Save Time with a 30-Minute Express Cut During Your Lunch Break” speaks to their specific needs, making them more likely to click.

Conversion Rate

Last but not least is conversion rate. This is the most important metric, it tells you the amount of people that actually converted. They took the desired action, whether that is booking an appointment, purchasing a product or signing up for a newsletter.

Your conversion rate is an accumulation of the success of the other elements in your campaign, including the effectiveness of your ad copy, the relevance of your offer, the clarity of your call-to-action, and the user experience on your landing page. Each of these components works together to turn interest into action.

On average, Spotify ads have a conversion rate of 0.5%, meaning that five people click the banner for every 1,000 ad impressions. You should improve your conversion rate if it is below 0.5%.

How to Improve Conversion Rate:

1. Optimize Your Landing Page: Ensure your landing page is aligned with your ad’s message, easy to navigate, and has a strong, clear CTA. A well-designed landing page can significantly boost conversions.

2. Refine Your Offer: If conversions are low, reassess the offer you’re presenting. Make sure it’s valuable, relevant, and timed to the needs of your audience.

3. Adjust Your Targeting: Use AI to fine-tune your audience, ensuring your ad is reaching the most relevant listeners who are more likely to convert.

Conclusion

A successful Spotify ad campaign hinges on understanding and optimizing key metrics like reach, frequency, ad completion rates, CTR, and conversion rate. By analyzing these KPIs, you can continuously refine your ad content to ensure it resonates with your audience and drives real results. With AI tools offering actionable insights, running an effective campaign becomes easier, leaving you more time to focus on growing your business.