Following the release of our quarterly earnings report, we’ve recapped the standout moments of Q3’23 with advertisers in mind.
This week, Spotify released its third quarter 2023 earnings report, delivering another strong performance with all KPIs exceeding guidance, including revenue growth.
Our total number of monthly active users (MAU) increased to 574M globally (up 26% YoY)—representing our second largest Q3 net addition performance in our history. Of these MAUs, 361M are ad-supported (up 32% YoY)—continuing the trend of rapid user growth—with ad-supported revenue growing 16% YoY. This continued business momentum was driven by growing demand for our music ad formats, as well as podcast ads across Spotify Podcasts & Spotify Exclusives, and the Spotify Audience Network.
Like last quarter, gains made across both the Premium and Free tiers of the business have been fueled by Spotify’s commitment to delivering unparalleled value to our user base, through an ever-improving consumer and creator experience. And, as noted by Spotify CEO Daniel Ek, this momentum is especially significant considering the Premium tier price increases that went into effect in Q3.
For advertisers, these upward trends indicate greater opportunities to reach and meaningfully engage with their audience across one of the world’s top digital streaming networks. And we’re on a mission to make those interactions more impactful than ever as we continue to develop ad products for businesses of all sizes.
Here are our top highlights from Q3 2023:
1. Self-serve advertisers can now optimize campaigns for video ad views when the Spotify app is in-focus.
At Spotify, we aim to support all brands and businesses of any size with measurable, multi-format advertising solutions. To that end, in September we launched the Video Views objective in Ad Studio, our self-serve ads manager, unlocking the ability for advertisers in the U.S., Canada and the UK to optimize their campaigns for views of video ads, served in the Now Playing View (NPV) when users are actively using the Spotify app.
Like the Clicks objective—which launched in March this year—the Video Views objective is designed to drive mid-funnel outcomes for self-serve advertisers, increasing consideration for their product, service, or brand. These are in addition to our Reach and Impressions objectives, enabling self-serve advertisers to drive real impact at both ends of the marketing funnel.
We’re continuously working to improve Ad Studio with new tools and capabilities to unlock even more benefits for self-serve advertisers, and help them achieve their advertising goals. Watch this space!
2. Video ads will soon run in Spotify’s app on Roku, the #1 Connected TV service in North America.
In September, we announced the introduction of video ads to Spotify’s app on Roku—enabling advertisers to reach their audience with video ads as they stream Spotify content on North America’s most popular connected TV (CTV) service.1
The expansion of this partnership is the first step towards the launch of the Spotify CTV Partner Network. It also reflects an unwavering trend in the entertainment space: that consumers are increasingly turning to digital streaming services to watch—or listen to—the content they love, in place of linear channels like radio and traditional TV.
“It’s long been our goal to make Spotify available to anyone on any device and this partnership with Roku answers the call from advertisers who want even more ways to reach our users,” said Lee Brown, Global Head of Advertising Business & Platform at Spotify. “Both our brands have been at the forefront of the streaming revolution and together we’re continuing to invest in more opportunities for advertisers to connect with our immersed users.”
3. Spotify continues to innovate its podcast offering with video and AI solutions that unlock new audiences for advertisers.
Spotify is now the most-used audio podcast platform in many key markets around the world, and the number one podcast publisher in the U.S.2 We count over 100 million regular podcast listeners and over half a billion people who have listened to at least one podcast on Spotify since 2019.3 Globally, there are now over 5 million shows, with podcasts available in more than 170 markets.
And with tremendous growth in the podcast space, comes tremendous innovation. In September, we piloted Voice Translations for podcasts, a groundbreaking feature powered by AI that allows listeners to enjoy podcasts in other languages, in the podcaster’s voice—and we surpassed 100,000 video podcasts at the top of the quarter.
Podcasts have become the go-to format for engaging with content more deeply, and podcast advertising on Spotify gives marketers the chance to reach both Ad-supported and Premium Spotify listeners with voice talent-read or host-read ads, when they’re highly immersed.
4. Spotify becomes the first audio platform to be integrated directly into WPP’s products and solutions
In August, we unveiled a new, first-of-its-kind partnership with WPP—the world’s largest marketing and communications company4—to provide its clients with early access to Spotify’s ad products and first-party intelligence, and creative ways to reach engaged audiences at scale.
To mark the occasion, we recreated our Sonic Science report to explore how the audio ads of WPP clients trigger engagement, emotional intensity, memory, and more. Armed with such insights, WPP clients will be able to create more effective advertising strategies. Further, the agreement also offers WPP employees and clients training focused on digital audio creativity and Spotify's innovative ad products.
This partnership signals Spotify's continued efforts to provide more advertisers with access to first-party intelligence and creative opportunities to help them engage their audiences at scale.
Ready to connect with Spotify listeners?
Sources: 1. “Pixalate Releases February 2023 CTV Device Global Market Share Report,” Pixelate, April 2023. 2. “The Top U.S. Podcast Networks Based on Reach, Q2 2023,” edison, August 2023. 3. “An Update on Changes to Spotify’s Podcast Business, June 2023” For The Record 4. “Leading advertising agency groups worldwide in 2022, by revenue,” Statista, September 2023