Did You SPOT this Dominant Stock?

Dec 05, 2021

You can tell a lot about a person based on the music they listen to.

Just like you can tell a lot about a company based on how (and where) it’s growing.

Last week, Spotify’s year-end “Wrapped” campaign shined a spotlight into the hearts of consumers, uncovering our true listening behaviors.

I’m not saying that my top artist list in 2021 included J. Cole, Taylor Swift, and 50 Cent… but I’m not saying it didn’t. (Maybe that’s why my “audio aura” is “hype” with a dash of “hopeless romantic.”)

This campaign may seem silly to some, but for our team at LikeFolio, it is extremely telling.


It’s a nice gut check to understand how engaged Spotify users are.

Check out the YoY change in mention volume surrounding this release.

2021 logged the highest Spotify Wrapped engagement volume we’ve ever recorded.

In fact, mention volume was so high, it sounded the alarm bells for our lead developer… Let’s just say we were processing a LOT of tweets.

This is an extremely high level of engagement among consumers who are voluntarily sharing their experience using Spotify.

And a big sneak peek into what could be a major earnings event for Spotify come January.

Because one key segment driving Spotify growth hinges upon user engagement…

Spotify Advertising is Booming

Last quarter, Spotify shocked the market with a strong report, and shares popped +10% post-release. Revenue increased +27% YoY, active listeners increased +20%, paid subscribers reached 170 million, and ad sales increased +75% YoY.

Did you catch that?

While other platforms grapple with changes in ad targeting capabilities (ahem, thanks, Apple), Spotify significantly leveraged its ad-supported user base.

And one area of advertising is leading the pack, according to LikeFolio data: podcasting.

Consumer mentions of engaging with ads on podcasts are near all-time highs, +29% higher YoY.

But is this engagement impactful? Yes.

According to Statista, 53% of consumers searched online for more info about a product or service they heard about on a podcast.

Do you have any guesses who is winning the largest piece of the podcast-listening pie?

It should be obvious after this build-up…

Not only does Spotify hold the largest market share of podcast mention volume, but this number is also growing… quickly.

Looking ahead, Spotify has goals well beyond podcasts.

For example, a new revenue model for creators will allow artists to operate on Spotify similarly to how creators on Patreon or OnlyFans do: charging consumers directly for exclusive content, early access, and interactive experiences on Spotify’s platform.

The company also has plans to expand its audiobook capabilities, as demonstrated by its recent acquisition of digital audiobooks distributor Findaway.

All of this is to say, if Spotify published its own “Wrapped” highlight campaign, podcasts, creator support, and user engagement would all be present.

We’ve got our eyes on Spotify as a long play, and it still appears to be early in the game.

In fact, I think there’s a real possibility that this stock could be one of Andy or Landon’s “trade of the year” candidates for 2022.

After all, the company doesn’t report earnings until the end of January.

And look at the current mention volume pace (shaded bar on the far right)…

The street may be in for a huge surprise.

Megan Brantley
Head of Research, LikeFolio