Buy, create, and measure: What the evolution of Spotify’s ads business means for advertisers

Eighteen years ago, we revolutionized the music industry. Since then, our announcements have been market-shifting and headline-making. Take our latest Loud & Clear report for example: our $10 billion payout last year is the largest in the history of the music industry. Or our recent foray into audiobooks that’s already fueling further growth, discovery, and innovation across the digital publishing landscape.

But it has always been our groundbreaking work behind the scenes that delivers those market-shifting innovations. While not always headline-worthy, these investments in tools and technical processes are critical to our business and yield a deep understanding of our audience’s needs, enabling us to build and grow a sustainable platform.

Since its inception, Spotify has shaped industries and opened doors. Now, we’re doing the same for our advertising business.

Earlier this month at our Spotify Advance event in New York, we announced new automation solutions like the Spotify Ad Exchange, as well as enhancements to Spotify Ads Manager. This gives advertisers the best of both worlds all under one roof: the power of Spotify's unique insights combined with the ease and efficiency of new ways to buy, create, and measure ads.

At first glance, you might be wondering, why now?

“Because we wanted to serve the ad industry’s growing needs and build new pathways to help drive your business forward,” Chloe Wix, Global Head of Product and Commercial Growth at Spotify, says. “Agencies and brands want more omnichannel buying flexibility, and we’re aiming to deliver that in a technologically seamless and highly effective experience. While we’ve built a strong reputation for helping brands accomplish their upper-funnel and brand-building objectives, our partners have pushed us to support their goals across the entire funnel.”

That’s why we’ve been laser-focused on building an advertising platform that works for everyone—from holding companies, global enterprise clients and DTC darlings, to industry-leading DSPs and growing mid-market businesses.

Advertisers now have access to Spotify’s dynamic solutions at their fingertips: automated paths and partners to buy and optimize media, auction-based environments for competitive pricing, and addressability to find their audience and track results.

And these solutions have never been more important, especially now given the current economic climate and the tariff situation affecting many industries globally. Combining reserved and biddable buying on Spotify provides the flexibility and efficiency brands may need during these uncertain times.

We’re opening doors and shaping markets for advertisers across all our channels—and this is just the beginning.

Listen up!

Audio is having a moment—and we’re not just saying that because it’s Spotify’s super power. We’re saying it because the average adult in the US spends more than 2.5 hours each day streaming audio, yet advertisers spend only 4.5% of their ad budgets on this format¹—and that’s in the world’s largest ad market. Audio is a hugely underutilized channel that can—and should—be a strategic piece of any omnichannel campaign.

“The discrepancy between time spent by consumers and advertising investment has never been greater. That's a tremendous opportunity,” Will Doherty, SVP of Inventory Development at the Trade Desk, said at Advance. “There is no other channel poised for growth like audio is today. It is the single biggest and most important channel for our marketers to invest in so that they can right size their omnichannel approach.”

It’s all in the mix

Spotify is home to some of the most influential creators who drive every corner of culture, which is one of the reasons we’re the #1 app people say they can’t live without.² Turns out, people don't need a detox from music and podcasts. They come to Spotify with intentionality: to learn something new, to listen to their favourite artist, to share playlists with friends—not to doom-scroll or out of boredom. Spotify users want to be in our app, because we’re nutritional and positive.

There is value in being able to buy high-quality inventory on this engaging, culturally-relevant platform. There’s no better place to take advantage of the positive impact audio can have on your media mix than Spotify.

And how people use Spotify is changing: in-focus is up 37% globally³, and that presents huge opportunities across audio and video. Spotify Ad Exchange provides advertisers with increased access to Spotify inventory across all our core formats: audio, video, and display (with podcast coming soon). And with Spotify Ads Manager, you can create an ad within minutes and have it live within 48 hours.

Plus, we’re seeing a huge uptick in video engagement on Spotify:

A healthy omnichannel mix includes display, too. We recently rolled out new display ads that are served only when the app is in-focus and optimized to reach users who are likely to view your ad and engage with your brand message. And we know that campaigns that run audio and video formats together on Spotify perform better than audio alone.

We’re shaping the market

If you think of the marketplace as a bonfire, we’re both the firewood and the lighter fluid—we’re bringing more supply to advertisers and, thanks to our partners, also accelerating marketplace growth.

Programmatic digital audio ad spending is expected to exceed $2 billion this year alone.⁶ And now that spending is set to accelerate following the launch of our Spotify Ad Exchange earlier this month—fueling the burgeoning automated digital audio ad market, simply by turning on the programmatic hose at Spotify. Spotify Ad Exchange provides advertisers with direct access to biddable Spotify inventory across all core formats, including audio, video, and display. We’ve partnered with The Trade Desk (TTD), DV360, Magnite, Yahoo!, LiveRamp, and Adform to improve addressability and make it easier for advertisers to find their audiences on Spotify with solutions that they’re familiar with and trust—and we have more partners coming soon.

Look no further than a travel client of ours who had wanted to buy biddable Spotify ads but couldn’t with our previous offerings. “When we launched Spotify Ad Exchange with UID integrated with TTD, our audio and video inventory became available in the biddable space meaning this client could start running their acquisition activation on Spotify—and we came out as the strongest performer on conversion,” Anne Bouttier, Spotify’s Global Head of Automation Sales, says. “That shows some of the capabilities we’ve unlocked for our clients, and that we’re bringing results with it.”

Buy, create, measure, optimize, repeat

We built a more automated advertising platform to serve the diverse needs of advertisers. With both Spotify Ads Manager and Spotify Ad Exchange, we’re making it easier and more efficient for advertisers and agencies to buy, create, and measure ads.

For advertisers who want more hands-on-keyboard control of their campaigns, we’re continuing to supercharge Spotify Ads Manager. That means Generative AI capabilities for script and voice-over creation, and mixing background music for audio ads—which cuts down production time from days to minutes. Further, the new Spotify Ads Manager tools provide first- and third-party solutions to help measure campaign performance. We’ve completely reimagined Spotify Brand Lift, so advertisers can understand how their Spotify campaigns impact their brand metrics. In addition, Spotify Pixel gives advertisers improved data resolution so they can better understand what actions people take after seeing or hearing an ad.

To fuel both of these automated buying paths, we’ve partnered with industry leaders to plug directly into Spotify and improve both ad targeting and measurement—with many more partnerships on the horizon.

Make no mistake: This is a milestone moment for Spotify—and just the start of an exciting new chapter in our evolution as an advertising platform.