As Spotify closes in on its first-ever profitable year, media buyers say advertisers are changing the way they spend on the platform.
The audio streaming platform posted its third-quarter earnings report at the close of the New York Stock Exchange on Tuesday (Nov. 12), recording $4.2 billion (€3.98 billion) in revenue — putting it well on track to record its first profitable financial year, 16 years after it was founded.
According to media buyers and media data firm Guideline, programmatic spend is also rising on the platform. Lindsey Freed, svp of media investment at Basis Technologies told Digiday that private marketplace and programmatic guaranteed buying were up about 8% year-over-year, while clients had increased their overall Spotify spend by 75%, relative to 2023.
Spotify embraced programmatic media trading back in 2015 with the introduction of a private marketplace offering that year; it’s had a programmatic guaranteed offering since 2021. Last month, Spotify confirmed that it is piloting its own ad exchange or supply-side platform, Spotify Ad Exchange, likely an effort to pad its advertising margins.
Spotify’s ad revenue is still dwarfed by its subscriber income, accounting for 11.8% of the quarter’s total revenue, but advertising revenues are rising. Q3 came in at $500 million (€472 million), a slight increase on Q2’s $483 million (€456 million) and a 6% year-over-year increase on 2023’s third quarter.
The company doesn’t break down its advertising revenue by ad format, and chief financial officer Christian Luiga didn’t indicate what proportion of its ad dollars came in via its programmatic business. But based on data from the industry’s largest media agencies, advertising data firm Guideline estimated that programmatic buys on the platform grew almost 58% year-over-year, compared to just 4% for direct buys.
“Our ad business to date has been heavily reliant on direct sales and top of funnel brand spend,” Luiga told analysts. “We have now diversified aside and changed our platform… 2025 will be a year of testing and trying out this, and we will see the impact going into 2026. It is early days.”
Media buyers also suggest that, despite Spotify’s past reliance on direct, programmatic buys are rising as more advertisers look to dip their toes in podcasts alongside music streaming.
According to Kashif Dalvi, head of strategy at media agency Assembly Europe, programmatic was attractive for marketers relatively new to audio advertising.
“Overall, I think programmatic is a more accessible route for both brands and advertisers. It’s easier to test and measure, ultimately giving brands rationale to invest,” he said in an email, adding that Spotify was set to be “a major part in our media planning conversations in particular for 2025.”
Though buyers said that Spotify represented a minority of media budgets assigned to audio, several said it was a significant one — and as overall audio media investment has risen, so has Spotify’s share. “Audio is increasingly integral to our strategic discussions,” said Dalvi,