Spotify Introduces AI-Enhanced Advertising Tools to Transform Audio Marketing
Spotify has launched a collection of artificial intelligence tools to change how businesses develop and run audio advertisements on the platform. On April 3, 2025, at an event in New York City, the streaming behemoth unveiled Gen AI Ads and a new programmatic advertising exchange, marking a transformative moment in digital audio marketing.
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Creating Audio Ads Without Restrictions, Democratized with AI
Spotify’s Gen AI Ads allow advertisers of all sizes to create high-quality audio ads without needing specialised knowledge or costly production resources to deploy. This new tool — built directly into Spotify’s Ads Manager — lets advertisers create free first-party scripts and voice-overs via artificial intelligence.
This is an essential step towards overcoming a long-standing barrier to entry for audio advertisers: production complexity. In the past, producing effective audio ads involved specialised skills, voice talent, and recording facilities—luxury resources for many small businesses. Gen AI Ads aims to create an equitable environment for small businesses.
“What we’re doing is making it simple for advertisers to create audio scripts and voiceovers in a way that previously could have taken days,” said Emma Vaughn, head of content and advertising business development at Spotify. The feature is available now for advertisers in the United States and Canada.
Proliferation of Programmatic Solutions
In addition to Gen AI Ads, Spotify also announced the official launch of SAX (Spotify Ad Exchange), their advertising exchange platform. This new offering allows for real-time programmatic bidding on Spotify’s inventory—something that has never before been possible for the company, which previously required advertisers to buy ads directly through sales teams or via its self-serve platform.
SAX is a tactical extension of Spotify’s advertising business model, with integrated partnerships including Google’s Display & Video 360, Magnite, The Trade Desk, and upcoming integrations with Yahoo DSP and Adform. The exchange will support audio and video and display ad formats across Spotify’s music content, with podcast inventory in the works.
The programmatic service. According to the announcement, the service will be programmatic across many top markets, including the U.S., Canada, Europe, Australia, New Zealand, India, Singapore, Brazil, and Mexico.
Industry Dynamics and Organizational Landscape
These innovations are being released as Spotify’s advertising business gains considerable momentum. The company announced this quarter, in February 2025, that it was its first-ever profitable year and that ad revenue grew 7% year-over-year while monetised monthly active users — i.e., ad-supported — grew 12% year-over-year during Q4 2024. There are currently 675 million Spotify users on ad-supported plans.
Launching these tools represents a shift in strategy for Spotify — moving away from a partnership-focused premium audio platform and toward a full-scale media platform, vying for a larger share of advertisers’ budgets. Brian Berner, global head of advertising sales at Spotify, pointed this direction: “The common thread here is making it easier for clients to buy, create, and measure on Spotify.”
Targeting the Next Generation
Aiming to reach Gen Z consumers, now over 251 million of its users, Spotify’s advertising innovations focus specifically on this youthful group. Gen Z, in particular, is contributing: According to the company, video consumption in this demographic’s platform is up more than 50% year over year.
“More than 75% of Gen Z have said that they feel mentally happy when using Spotify, and they use it as an escape from doomscrolling,” Vaughn said. This positive correlation builds what Spotify calls “an impactful and safe environment for advertisers”.
Measurement and Performance
In addition to creation tools, Spotify has expanded its measurement capabilities to show ad effectiveness. According to the platform’s data, combining audio with video ads yields a 27% lift in purchase intent and drives incremental sales 66% more effectively than audio-only campaigns.
Objective-based buying to drive specific outcomes such as app installs and website visits has also been rolled out, and partnerships with DoubleVerify and IAS help allay brand safety fears.
Industry Implications
These changes are part of a foundry industry trend toward automation, artificial intelligence, and programmatic advertising. Spotify’s AI tools are likely breaking down real barriers to entry for small and medium businesses that haven’t had the means to engage with audio advertising.
That would point toward the fact that there will be a noticeable change in the audio advertising landscape, and advertisers and listeners alike will be impacted as these technologies become more readily embraced. Whether its new AI-generated content will be more interesting than typical ads is yet to be determined. Still, Spotify’s advances open up audio advertising for a broader range of companies.
These new tools mark yet another step in Spotify’s evolution from a music streaming service to an all-out advertising platform, putting it at the convergence of audio content, advertising technology, and artificial intelligence.