How do different platforms use personalization in their business strategy?
Spotify (Personalization for maximizing listening time)
Spotify’s signature personalization features not only contribute to its north star metric of time spent listening, but also contributes to high user retention as users are able to easily discover music that fits their taste. Spotify uses a variety of recommendation models (Discovery weekly, Daily Mix) that match the user to songs based on previous listening activity user behavior (ie. time of day) and categorizes them into moods or moments (ie. with catchy titles like “your sad moody rainy day playlist”) that attract users more than just genres – it appeals to why users listen to music in the first place. With more relevant music that matches specific user moments, metrics like listening time and retention are strengthened, with users returning to the app with the expectation that at whatever moment they tune in, they’ll find a song that fits it. As Spotify improves their model with each return, the playlists become more unique and personal, which users risk losing if they churn.
LinkedIn (Personalization to increase session frequency)
LinkedIn’s job recommendations and connection suggestions make it an attractive platform for their user base, not just because they make job searching and networking convenient, but also because its users attribute frequency of engagement to higher levels of success. That’s because users have high trust in the personalization of the content, which provides relevant posts, jobs that match skills, and connection suggestions that indicate likelihood of connection success. Because each recommendation is important and catered to the user, time away from the app can mean opportunities missed that were a perfect match for the user. As users build their profiles and take connection/job suggestions, better matches are recommended, giving users more reasons to return while driving session frequency.
TikTok (Personalization for ad targeting)
TikTok uses personalization in its renowned “For You Page”, which uses rapid feedback loops to continuously refine the content the user sees using engagement events like video watch time, likes, commends, and shares. The ads shown take the same engagement events to cater towards the user. With better targeting and higher engagement on ads, TikTok is able to drive higher advertiser ROI and platform revenue while maintaining a balanced ecosystem where users are matched to even niche content that may fit their tastes. The ROI of personalization investment for TikTok, then, is high since the feed is entirely algorithmic, in which iterations will simultaneously impact both watch time and ad revenue.
