Spotify announced major updates to its advertising capabilities at a New York City event on Thursday, introducing AI-generated ads and a new programmatic marketplace aimed at reaching its massive Gen Z audience.
The streaming giant launched the Spotify Ad Exchange (SAX), a programmatic platform enabling advertisers to target Spotify's logged-in users through real-time auctions. The exchange will support audio, video, and display ad formats across music content initially, with podcast advertising coming later.
SAX debuts with partnerships including Google's Display & Video 360 and Magnite, while integrations with Yahoo DSP, Adform, and other platforms are planned. The Trade Desk is also among the supported partners. The exchange will operate across multiple regions including the US, Canada, Europe, Australia, New Zealand, India, Singapore, Brazil, and Mexico.
In a parallel development, Spotify is bringing generative AI capabilities to its Ads Manager platform in the US and Canada. Advertisers can now use AI tools to create ad scripts and voiceovers at no extra cost, streamlining the audio ad creation process.
These advertising innovations target Spotify's growing Gen Z user base, which now exceeds 251 million users. The company emphasized that these young listeners engage with the platform throughout their daily activities, providing advertisers with consistent reach beyond active screen time.
The new offerings aim to modernize Spotify's advertising infrastructure while making it easier for brands to connect with younger audiences at scale through programmatic buying and AI-assisted creative tools.