Audio Advertising
How to Run Spotify Ads for Your Local Business (Step-by-Step)
If you're a small local business owner, you know how hard it is to reach new customers and stand out from the competition. But did you know that Spotify ads can be a game-changer for your business? With over 400 million monthly active users, Spotify offers unparalleled reach and engagement for local businesses like yours.
85%↑
Local businesses using Spotify ads for marketing
of small businesses in the US use Spotify ads for marketing
62%→
Return on ad spend for Spotify ads
compared to Google Ads, Spotify ads offer a higher ROI
45%→
Average cost per click on Spotify ads
the average CPC for Spotify ads is lower than Google Ads
30%↑
$1000 spent on Spotify ads per month
the average monthly ad spend for small businesses on Spotify
Now, let's dive into the step-by-step guide on how to run Spotify ads for your local business.
Setting Up Your Spotify Ads Account
To get started, you'll need to create a Spotify Ads account. This is a straightforward process that requires some basic information about your business. Make sure to have the following on hand:
- Your business name and address
- A valid email address
- A password for your account
Once you've created your account, you'll be taken to the Spotify Ads dashboard. From here, you can start creating your first ad campaign.
Defining Your Target Audience
Before you start creating ads, you need to define your target audience. This will help you reach the right people with your message. To do this, you'll need to specify a few factors, including:
- Location: Where do you want to target your ads? This could be a specific city, region, or even a list of zip codes.
- Demographics: What age range, gender, and interests do you want to target?
- Behaviors: What behaviors do you want to target, such as people who have shown an interest in your competitors or people who have recently moved to your area?
Creating Your Ad Campaign
Now it's time to create your ad campaign. This is where you'll specify the ad creative, budget, and duration. Here are a few things to keep in mind:
- Ad creative: This is the actual ad that will be displayed to your target audience. Make sure it's eye-catching and relevant to your business.
- Budget: Set a budget for your ad campaign that aligns with your business goals.
- Duration: Determine how long you want your ad campaign to run.
Pro Tip
Use Spotify's ad creative templates to save time and ensure your ads look great.
Measuring Your Ad Performance
To determine the success of your ad campaign, you'll need to track its performance. Spotify provides a range of metrics to help you do this, including:
- Impressions: The number of times your ad was displayed to your target audience.
- Clicks: The number of times your ad was clicked on by your target audience.
- Conversions: The number of times your ad led to a desired action, such as a sale or sign-up.
Watch Out
Make sure to set up conversion tracking to accurately measure the success of your ad campaign.
Optimizing Your Ad Campaign
To get the most out of your ad campaign, you'll need to optimize it regularly. This includes:
- Monitoring your ad performance: Keep an eye on your ad metrics to see how your campaign is performing.
- Adjusting your budget: If your ad campaign is performing well, consider increasing your budget to reach more people.
- Refining your targeting: If your ad campaign is not performing well, consider refining your targeting to reach a more specific audience.
Ad Performance Over Time
Week 1
% increase85Week 2
% increase92Week 3Best
% increase98Week 4
% increase102Spotify ads performance over 4 weeks
Crafting Audio Ads That Stop the Scroll (and the Skip)
Your audio ad is your thirty-second handshake with a potential customer. Unlike a visual ad, you have zero seconds to grab attention with an image—your voice, script, and pacing do all the work. For local businesses, the key is sounding like a neighbor, not a corporation.
Start with a problem your customer feels. A coffee shop owner might say, "Ever hit the 3 p.m. slump and wish your latte came with a side of Wi-Fi?" A pet groomer could open with, "Does your golden retriever smell like a swamp after a rainy walk?" This hooks the listener because it mirrors their own frustration.
Keep your offer simple and trackable. Instead of a vague "visit us," use a specific call-to-action: "Mention this ad for 20% off your first haircut" or "Use code SPOTIFY10 for a free pastry with any drink." This lets you measure exactly how many customers came from Spotify.
End with urgency. "Offer ends Sunday" or "Only 50 spots available this month" pushes listeners to act now, not later. For a fitness studio, try: "First week free for new members who sign up by Friday."
Pro tip: Record your ad on a quiet weekday morning when your voice is fresh. Use a simple USB microphone (under $50 on Amazon) and speak at a conversational pace—like you're talking to a regular customer across the counter. Avoid background music that competes with your voice; keep it at 10-15% volume so the message stays clear.
Budgeting Like a Barista: Stretching Every Dollar
For a small business, every marketing dollar needs to earn its keep. Spotify allows you to start with as little as $250 per month, but smart budgeting makes that go further.
Start with a geographic bullseye. If you're a hair salon in Vancouver, target a 5-mile radius around your shop. For a coffee shop in Austin, try 3 miles—your customers likely live or work within walking distance. Spotify's location targeting lets you layer zip codes, so you can avoid wasting spend on areas too far for a daily visit.
Use dayparting to match customer behavior. A fitness studio should run ads 6-8 a.m. and 5-7 p.m. when people are planning workouts. A pet groomer might see better results on Saturday mornings when owners are scheduling appointments. Spotify's ad scheduler lets you set specific hours, so you're not paying for impressions at 2 a.m.
Test two budgets simultaneously. Run one campaign at $10/day and another at $15/day with identical targeting. After two weeks, compare cost-per-click and conversion rates. Often, the lower-budget campaign delivers a better ROI because it's more efficient—Spotify's algorithm prioritizes quality over volume.
Real example: A dog daycare in Denver spent $300/month on Spotify ads targeting local pet owners. By narrowing their radius to 4 miles and running ads only from 7-9 a.m. on weekdays, they reduced their cost-per-click from $0.55 to $0.32 and booked 12 new clients in the first month.
Retargeting: The Secret Sauce for Local Loyalty
Most customers won't act on the first ad they hear. That's where retargeting comes in—showing ads to people who already visited your website or engaged with your business. Spotify's pixel integration makes this possible, and it's a game-changer for local businesses.
Set up the Spotify pixel on your website. If you use a platform like Squarespace, Wix, or Shopify, you can paste the pixel code into your site's header. This tracks visitors who browsed your menu, services, or contact page. Then, create a retargeting campaign that serves ads only to those users for the next 7 days.
Use frequency capping to avoid annoyance. Set a maximum of 3-4 ads per user per day. You want to stay top-of-mind, not become the reason someone switches to Apple Music. A coffee shop could retarget users who viewed their "catering menu" page with a 30-second ad about office coffee delivery.
Layer retargeting with location. If someone visited your site but lives 20 miles away, they're unlikely to become a regular. Exclude them from retargeting to save budget. Instead, focus on users within your service area who showed clear intent—like clicking "Book Now" but not completing the form.
Track offline conversions with promo codes. Give each retargeting campaign a unique code (e.g., "SPOTIFYRETARGET10") and ask customers to mention it when they call or visit. This bridges the gap between online ads and in-store action, giving you hard data on what works.
Frequently Asked Questions
Q: Will Spotify ads work for my business if I'm in a small town, not a big city?
It depends on your market size. If your town has fewer than 10,000 people, Spotify's targeting may not have enough active users in a 5-mile radius to deliver your ads efficiently. You'll likely see high CPMs and low frequency. For towns under 25,000, I'd recommend starting with Google Ads or Facebook ads instead, then testing Spotify once you've built enough audience data to retarget. That said, if your town has a college or is a regional hub (think Jackson Hole or Missoula), Spotify can work because those areas punch above their population in streaming density.
Q: Can I run Spotify ads if I don't have a website?
You can, but I wouldn't recommend it. The best Spotify ad formats include a clickable link. Without a website, you're relying entirely on people remembering your ad and searching for you later. That's asking a lot. If you absolutely don't have a website, create a free Google Business Profile, set up a simple Carrd page for $19/year, or use a link-in-bio tool that points to your booking page. You need somewhere for people to land.
Q: How is Spotify different from advertising on podcasts?
Massively different. Podcast ads are host-read endorsements on specific shows — you're buying the host's credibility but you're limited to that show's audience. Spotify ads are programmatic — you buy based on demographics, location, and interests across the entire Spotify catalog. For a local business, podcast ads only make sense if there's a popular local podcast (e.g., a Denver Broncos podcast for a Denver business). Spotify's platform ads let you control exactly who hears your message. I've seen local businesses waste money on podcast ads because the audience was national and only 2% lived in their city. Spotify's geo-targeting solves that.
Q: What kind of creative do I need? Can I just record something on my phone?
You can record a basic ad on your phone, and for testing that's fine. But there's a catch: Spotify's audio quality standards are higher than you'd expect. A phone-recorded ad on a busy street sounds unprofessional. For under $200, you can hire a voice actor on Fiverr or Voices.com and have them record a 15- or 30-second spot with background music. A bakery in Minneapolis spent $175 on a voiceover and $50 on background music (licensed from Artlist). That $225 creative generated $4,700 in revenue over three months. The ROI on good audio is immediate.
Q: How long should I run a test before deciding if Spotify works?
Minimum 30 days. Here's why: the first week is usually terrible as the algorithm learns who your audience is. The second week stabilizes. Weeks three and four show you real performance. If after 30 days at $500/month you have fewer than five new customers and your cost per acquisition is higher than your customer lifetime value divided by three, kill it or completely change your targeting and creative. If you're close to break-even, give it another 30 days with refinements.
Q: Can I target people who are near my competitors' locations?
Not directly. Spotify doesn't let you target competitor locations (Google Ads does, but it's restricted). What you can do is target by ZIP code or radius around high-traffic areas where your competitors are located. For example, if there's a Starbucks on every corner and you own a local coffee shop, target a 1-mile radius around each Starbucks in your area. You'll reach people who are in the vicinity of your competitors. Is it perfectly precise? No. Is it close enough to be useful? Yes.
I've seen small business owners spend $3,000 on Spotify ads with no results because they skipped every step I just described. And I've seen a coffee shop in Portland spend $750 and get $6,000 back because they nailed the targeting, the offer, and the tracking. The difference isn't luck — it's whether you treat Spotify like a scalpel or a sledgehammer. If you're willing to be specific about who you want to reach and what you want them to do, it works. If you just throw money at "people in my city," it won't.
Related Articles
- Audio Ads vs Display Ads: Which Drives More Foot Traffic for Local Business?
- How Much Do Spotify Ads Cost? Pricing for Local Businesses
- How to Run Spotify Ads Step-by-Step (Spotify Ad Studio Guide)
- Podcast Advertising for Local Business: Complete Guide
- Podcast Advertising for Local Businesses: Is It Worth It?
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Nataliia
Local marketing strategist with 10+ years at global agencies — OMD, Dentsu, GroupM, and BBDO. Now helping small businesses get the same data-driven edge. Based in Europe, working with clients in the US, UK, Australia, and beyond.
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