Spotify debuts Gen AI ads, programmatic ad buying

Spotify announced Gen AI ads, among other changes to its advertising business, at an event in New York City on Thursday. Notably, the company introduced a new programmatic offering, the Spotify Ad Exchange (SAX), which allows advertisers to reach Spotify’s logged-in users via real-time auctions.

On the latter, Spotify announced new partnerships with Google’s demand-side platform, Dispay & Video, Magnite, with Yahoo DSP, Adform, and others “soon” to come. The Trade Desk is also supported. SAX will offer full addressability and measurement capabilities, the company notes.

The partners will initially be able to advertise within Spotify’s audio, video, and display formats across music, with podcast support on the way.
SAX will be available in the U.S., Canada, Europe, Australia, New Zealand, India, Singapore, Brazil, and Mexico.

In another major announcement, the company said it’s integrating AI into its advertising offerings by allowing marketers to use Gen AI to create scripts and voiceovers for their audio ads using Spotify Ads Manager in the U.S. and Canada.

Spotify says the use of its AI tools will come at no additional cost to advertisers.

The changes were pitched to marketers as a way to reach the coveted Gen Z demographic, who access the streaming service throughout the day, not just when they’re engaged directly with the app and looking at the screen. The company touted that it now has over 251 million Gen Z users on its service.