Spotify is piloting an ad exchange, known as the Spotify Ad Exchange (SAX), to enhance its automated ad offerings, initially focusing on video. This move aims to capture more ad revenue from small- and medium-sized businesses and improve spending efficiency for existing clients. The initiative will help Spotify compete against larger platforms like Meta and Google.
Key Details
- Partnership with The Trade Desk: Spotify's first DSP partner is The Trade Desk, a major ad tech company. The partnership currently focuses on connecting The Trade Desk's North American clients to Spotify's video ad inventory, with audio ad inventory to follow soon.
- Technology and Integration: The Trade Desk uses OpenPath technology to connect premium publishers' inventory to advertisers quickly. Spotify will be one of the largest audio publishers using OpenPath.
- Universal ID 2.0: As part of the partnership, Spotify will join Universal ID 2.0, a cookie-less ad-targeting framework, providing privacy-safe ways to target users online.
Statements
- A Spotify spokesperson confirmed the testing of the new SSP with The Trade Desk, emphasizing the importance of learning from the initial period.
- A spokesperson for The Trade Desk expressed excitement about extending the partnership to provide advertisers with direct access to high-quality inventory.
Broader Context
- Automated Ad Business: The Spotify Ad Exchange marks Spotify's significant step into scaling its automated ad business. Previously, Spotify's programmatic ad solutions were accessible only via programmatic direct through its sales team.
- Video Ad Push: Spotify is also ramping up its video ad offerings, expanding music video availability to nearly 100 markets globally, which will increase its video ad inventory. Last year, Spotify launched video ads for its connected TV apps, starting with Roku.
Spotify has collaborated with various DSPs to make its ad inventory more accessible, but The Trade Desk is the first to access its new ad exchange. This partnership and the new ad exchange are expected to significantly enhance Spotify's automated ad capabilities and competitive positioning in the digital advertising market.
