Spotify
Personalization is a core tenant of Spotify’s product offering. Inherently, the music we listen to and the artist we follow are deeply personal to us. As a music streaming platform, Spotify only provides value if it is able to provide music that its users enjoy listening to – thus boosting listening time, conversions to Premium, and overall LTV. Spotify invests heavily in its recommendation algorithms, for instance by generating new playlists, surfacing potential new artists, or synthesizing a fun annual “Spotify Wrapped.”
ROI includes all user conversions to Spotify Premium as well as payment from artists to stream their music on Spotify’s platform.
Users mainly visit LinkedIn for the job search or to expand their network. LinkedIn uses personalization to create a feed with posts that are engaging and relevant to a user’s career. Additionally, recommendations for profiles and other users to view/follow/interact with is integral to LinkedIn’s core value proposal of building a career network. Bigger network means more opportunities means jobs!
ROI includes revenue from LinkedIn’s job application platform and LinkedIn Premium subscriptions.
TikTok
TikTok’s algorithm is what set it apart from other forms of media at the time of its rapid success in the last decade. A more personalized algorithm and more interesting content is what makes TikTok more addictive for users, which translates to increased watch time. User data is also collected and used to feed ads successfully to its target audience. TikTok makes money on a (Cost Per Click) or CPI (Cost Per Impression) through ads – therefore, the more ads are personalized, the more users interact with ads, the more TikTok makes! Choosing the correct ads to surface to the correct audiences also decreases churn and makes ads more seamless in the viewing experience.
