Spotify Launches In-House Ad Exchange Platform, Starting With Video Ads
Spotify is developing its own automated ad exchange platform, initially focusing on video advertising before expanding to audio content. According to Axios reports, this development aligns with Spotify's recent strategic moves toward video content expansion and operational efficiency.
The platform, dubbed "Spotify Ad Exchange," will integrate directly with demand-side platforms, starting with The Trade Desk (NASDAQ: TTD). A pilot program launched last week, targeting North American advertisers for video advertising opportunities on the platform.
As it pursues continued video expansions, Spotify is reportedly building its own ad exchange. Photo Credit: Thibault Penin
Key developments include:
- Initial focus on video advertising with plans to expand to music, podcasts, and audiobooks
- Recent expansion of music videos beta to 85 additional countries
- Multiple advertising-related job postings since October, including positions for legal counsel, senior management, and engineering
This initiative comes as Spotify faces:
- Slowing subscription growth in established markets
- Pressure to monetize ad-supported listening
- Need for new revenue streams in emerging markets
The market has responded positively to these developments, with Spotify (NYSE: SPOT) shares reaching a new 52-week high of $389.48. The company currently serves over 626 million monthly users, including 246 million paid subscribers.
The platform plans future integrations with additional ad-tech operations, though specific details remain undisclosed. This move represents a significant step in Spotify's evolution from a pure music streaming service to a comprehensive media platform.
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