Spotify Is Paying Something Like $400,000 per Day to Advertise on YouTube

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Spotify is giving ones of its competitors $400,000 per day to advertise on its homepage. At least that's the going rate for a "homepage takeover" on YouTube—one of the Internet's most popular music destinations which is reportedly working on a streaming music service of its own. Spotify is paying to run a clever Phoenix ad that began this morning and will unfurl in 18 parts throughout the day. The $400,000 estimate comes from a February Digiday survey of what advertisers are paying for various high-profile spots on the web including YouTube's front page.  It's a lot of money for an elaborate viral video campaign and it's right on the front page of YouTube this morning. 

This is just the latest in a series of aggressive ad pushes for Spotify, which ponied up a reported $10 million for television ads last month. While Spotify has grown a ton since coming to the U.S.—it currently has 1 million subscribers here—its user base is paltry compared to the 1 billion users that YouTube has. "Plenty of normals simply haven’t heard about it, period," notes AllThingsD's Peter Kafka. Plus, most of Spotify's growth has come in the form of unpaid subscriptions, as this chart from CNET shows:

While the streaming music space already feels crowded — Spotify is already competing with Rdio and Pandora — the really big players could be entering soon: Google and Apple are also reportedly working on streaming music services. The time for Spoitify to solidify its place is now and what better place to do it than all over its more popular rival. 

This article is from the archive of our partner The Wire.