Spotify launches generative artificial intelligence ads and programmatic advertising.
Spotify has launched new advertising tools and features, including 'Gen AI' ads and the ability to purchase programmatic ads through collaborations.
Spotify held a presentation in New York on Thursday, where it announced updates to its advertising business, including the introduction of ads with artificial intelligence (Gen AI). One of the highlights of this change is the launch of the Spotify Ad Exchange (SAX), a new programmatic offering that allows advertisers to reach Spotify's registered users through real-time auctions.
In relation to SAX, the company also announced new partnerships with Google’s demand platform, Display & Video 360, and Magnite, in addition to collaborating with Yahoo DSP, Adform, among others that will join "soon." The platform will be compatible with The Trade Desk and will offer "full targeting capabilities" and measurement options, according to the company. Initially, partners will be able to advertise in audio, video, and display formats within Spotify, with podcast support coming in later stages. SAX will be available in the United States, Canada, Europe, Australia, New Zealand, India, Singapore, Brazil, and Mexico.
Additionally, in another significant announcement, the company revealed that it is integrating artificial intelligence into its advertising offerings, allowing marketers to use Gen AI to create scripts and voiceovers for their audio ads through Spotify Ads Manager in the U.S. and Canada. Spotify assures that using its artificial intelligence tools will not incur additional costs for advertisers.
These changes were presented as a strategy to attract the coveted Generation Z audience, who use the streaming service throughout the day and not just when they interact directly with the app. The company highlighted that it currently has over 251 million Generation Z users on its platform.