Spotify Utilizes Programmatic Advertising For 25% Of Its Revenue

Ad Industry News
Last updated: August 7, 2020 | by Kean Graham
Spotify Utilizes Programmatic Advertising For 25% Of Its Revenue

This post was most recently updated on August 7th, 2020

Business for Spotify is booming! The audio giant recently announced that programmatic advertising (find out more about it here) is currently generating 20-25% of its ad revenue. It’s also seen tremendous growth in ad revenues, up by 30% from their Q3 report. Find out more about Spotify’s programmatic ad strategy and where they plan to expand their business next in this week’s ad ops video below!

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Video transcription

Buyers love programmatic audio. Spotify’s earnings show just that.

Currently, 20-25% of Spotify’s revenue comes from its self-serve programmatic ad platform and other automated buying features.

Previously their percentage of programmatic revenue was around 18% in February.

In Europe and the UK, the market is moving towards programmatic more each day.

Spotify launched its programmatic self-serve platform back in September 2017.

They believe that they’ll see benefits from this move for many years to come.

Ad-supported revenue has grown 30% in Q3 to $163 million.

Ad-supported monthly users increased by 20% to 109 million.

Spotify also saw a YOY revenue increase of 31% to $1.54 billion.

However, the average revenue per user declined by 6% in Q3 to $5.39.

Spotify estimates that the average revenue per user will start to normalize as they expand their student and family plans.

Besides programmatic sales, Spotify is also dedicating more resources to podcasting.

They believe there is an enormous opportunity in the podcasting space and aim to improve the user experience.

They want to use the podcast market to diversify their revenue.

To continue growth, Spotify plans to market more to countries like Japan and India.

They are also partnering with Samsung, Apple, Google, and Amazon to boost distribution.

Source: https://adexchanger.com/ad-exchange-news/programmatic-is-25-of-spotifys-revenue-growing-twice-as-fast-as-direct/

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