Spotify has unveiled a major update to its advertising business, introducing AI-powered ads and a new programmatic ad-buying system. The announcement was made during an event in New York City on Thursday, where the company shared its latest innovations to improve advertiser reach and engagement.
A new way to buy ads with Spotify Ad Exchange
One of the biggest changes is the Spotify Ad Exchange (SAX) launch, a new programmatic advertising system. This platform allows advertisers to target Spotify’s logged-in users through real-time auctions, making ad placements more efficient and data-driven.
Spotify has partnered with major advertising platforms to power this system, including Google’s Display & Video 360, Magnite, Yahoo DSP, and Adform. The Trade Desk is also among the supported partners. According to Spotify, SAX will offer full addressability, meaning advertisers can better tailor their campaigns to reach specific audiences while benefiting from advanced measurement tools.
At first, SAX advertisers can place ads within Spotify’s audio and video and display music content in different formats. Support for podcasts is expected to be added soon. The new system will be available in several key markets, including the United States, Canada, Europe, Australia, New Zealand, India, Singapore, Brazil, and Mexico.
AI-powered ad creation is now available
In addition to SAX, Spotify integrates artificial intelligence into its advertising tools. This means marketers can now use generative AI to create scripts and voiceovers for their audio ads through Spotify Ads Manager. Currently, this feature is available in the U.S. and Canada.
By using AI, advertisers can streamline the process of creating engaging and high-quality audio ads. Notably, Spotify confirmed that this service will be offered at no extra cost, making it an attractive option for businesses looking to enhance their ad campaigns.
Targeting Gen Z listeners
Spotify’s latest advertising updates are designed to help brands connect with Gen Z, the platform’s key demographic. The company revealed that over 251 million Gen Z users now stream content on Spotify, making them a significant audience for advertisers.
Spotify emphasised that users engage with the platform throughout the day—not just when browsing the app. This means brands have more opportunities to reach listeners even when not looking at their screens.
With these new features, Spotify is positioning itself as a leader in digital advertising, offering advertisers innovative tools to create more engaging and effective campaigns. As AI and programmatic buying continue to shape the future of digital marketing, Spotify is making sure brands can stay ahead of the curve.
