While Spotify won’t report its full Q3 earnings until November 12, the streamer will likely be boasting an 11% year-over-year growth in audio advertising revenue in the US for 2024. The news comes as the Swedish company strengthens its programmatic ad strategy.
Data from advertising analysis firm Guideline indicates that programmatic buys on Spotify have grown by nearly 58% year-over-year, compared to a 4% growth for direct buys, highlighting the shift toward automated ad buying.
In addition to audio, Spotify’s ad revenue from video rose 12%, while digital display ad spending increased by 3%. Currently, video ads make up 20% of Spotify’s digital ad placements. Consumer goods, technology, and retail remain the top sectors investing in Spotify, with wellness, pharmaceuticals, and apparel leading in growth.
Automotive ad spending saw a notable decrease.
Spotify is testing a new ad exchange, SAX, to expand its automated ad services, focusing particularly on video. This move positions Spotify to better compete with giants like Meta and Google for ad revenue. Previously, Spotify’s programmatic ads were mostly direct buys through its sales team, but SAX aims to broaden options by enabling partnerships with DSPs, starting with The Trade Desk.
Guideline Head of Product Strategy Alberto Leyes commented, “Spotify’s SAX exemplifies how publishers are stepping up to provide advertisers with enhanced transparency across multiple types of placements in the programmatic landscape, while reducing costs and elevating control as they cut players from the supply chain.”
