Spotify debuts generative AI tools & new ad exchange platform

Spotify has announced a series of updates to its advertising business, including the launch of generative AI-powered tools and a new programmatic advertising exchange, during an event held on Thursday in New York City.

A key highlight was the introduction of the 'Spotify Ad Exchange (SAX),' a programmatic offering that enables advertisers to reach Spotify’s logged-in users via real-time auctions. The company confirmed that SAX will provide full addressability and measurement capabilities across a range of ad formats.

The platform has partnered with major demand-side platforms (DSPs) to support SAX, including Google’s Display & Video 360 and Magnite. Additional integrations with Yahoo DSP, Adform, and others are expected to follow. The Trade Desk is also supported.

Initially, SAX will allow partners to place ads in audio, video, and display formats across Spotify’s music content, with podcast inventory to be added in the future. The service will be available in several key markets, including the United States, Canada, Europe, Australia, New Zealand, India, Singapore, Brazil, and Mexico.

In a separate announcement, Spotify revealed new generative AI features within its Spotify Ads Manager platform. The tools, available in the U.S. and Canada, will enable marketers to create audio ad scripts and voiceovers using AI, at no additional cost.

The updates aim to provide advertisers with enhanced capabilities to connect with Spotify’s broad user base, including over 251 million Gen Z users. Spotify highlighted that Gen Z listeners engage with the platform throughout the day, beyond just moments of direct app interaction.

The new advertising tools and programmatic offerings are part of Spotify’s broader strategy to strengthen its position in the digital advertising space and cater to marketers looking to reach younger, digitally native audiences.

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