Spotify launches ad exchange, partners with The Trade Desk for video

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Spotify pilots new advertising exchange platform focusing on video inventory, partnering with The Trade Desk to expand automated ad offerings.

Spotify launches ad exchange, partners with The Trade Desk for video Spotify Video
By Luís Rijo, on October 27, 2024 2:59 PM

Spotify unveiled its new advertising exchange platform on October 22, 2024, marking a significant shift in how the audio streaming giant manages its advertising infrastructure. The platform, internally known as Spotify Ad Exchange (SAX), will initially focus on video inventory through a partnership with The Trade Desk, according to sources familiar with the development.

According to Axios, Spotify began testing its Supply-Side Platform (SSP) plugin with The Trade Desk last week, initially concentrating on connecting North American advertising clients to Spotify's video advertising inventory. The partnership will later expand to include audio ad inventory, demonstrating a phased implementation approach.

As part of this collaboration, Spotify will join Universal ID 2.0, a cookie-less ad-targeting framework developed by The Trade Desk. This integration addresses growing privacy concerns in digital advertising, providing advertisers with privacy-compliant methods for user targeting.

The digital audio landscape presents a significant opportunity for advertisers. According to Jeff Green, CEO of The Trade Desk, consumers spend approximately three hours with digital audio content daily in the United States, indicating substantial engagement levels with both music and podcast content.

The new exchange can integrate with various demand-side platforms (DSPs), though The Trade Desk serves as the initial DSP partner. The Trade Desk's OpenPath technology will facilitate faster connections between premium publishers and advertisers, with Spotify becoming one of the largest audio publishers to utilize this infrastructure.

Spotify's video strategy has seen recent expansion, with the company extending its music video offerings to nearly 100 markets globally. This expansion significantly increases the platform's video advertising inventory potential. The company previously launched video ads for connected TV apps, with Roku serving as the initial partner.

Spotify's spokesperson confirmed the testing phase with The Trade Desk, emphasizing the importance of the pilot period for gathering insights. The company plans to establish similar partnerships with other ad tech firms in the coming months to further expand its automated advertising capabilities.

Key Facts

  • Launch Date: October 22, 2024
  • Internal Platform Name: Spotify Ad Exchange (SAX)
  • Initial Focus: Video advertising inventory
  • Geographic Focus: North American advertising clients
  • Technology Integration: OpenPath system
  • Privacy Framework: Universal ID 2.0
  • Current Testing Phase: Pilot program with The Trade Desk
  • Content Expansion: Music videos in nearly 100 markets
  • Average User Engagement: 3 hours daily with digital audio (US market)
  • Previous Implementation: Video ads on connected TV apps with Roku
  • Future Plans: Integration with additional ad tech firms
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