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Investors Business Daily
Technology
PATRICK SEITZ

Spotify Steps Up Advertising Push With New Tools, Partnerships

Spotify Technology has announced new initiatives to boost the music and podcast streamer's advertising revenue. Spotify stock analysts were positive on the news.

At an event in New York City on Wednesday, the audio entertainment giant unveiled updates that make it easier for advertisers to buy, create and measure results on Spotify's ad platform.

The company said its Spotify Ad Exchange is now available through Google's Display & Video 360 and Magnite, with Yahoo DSP, Adform and others to come soon. They join Trade Desk.

Those partners have access to Spotify's suite of audio, video and display ad formats across music, with podcasts coming soon.

Plus, Spotify is offering a way to create advertisements using generative artificial intelligence called Spotify Gen AI Ads. Advertisers also can use Spotify's in-house agencies to make ads.

On the stock market today, Spotify stock declined 1.2% to close at 558.42 amid an overall bad day for stocks.

In a report Thursday, LightShed Partners said Spotify's advertising business has underperformed over the last two years. But Spotify now has the advertising infrastructure to support its ad industry ambitions, the research firm said.

"After a multi-year investment in their own advertising technology platform, Spotify should be able to expand well beyond the world of audio advertising and compete more directly for a broader array of advertising dollars that are tied to achieving specific outcomes/objectives," LightShed analysts Richard Greenfield, Brandon Ross and Mark Kelley said.

"We believe yesterday's advertising platform unveiling will dramatically accelerate Spotify's advertising growth rate in 2026 and beyond," they said. "Over time, Spotify advertising should be at least 20-25% of overall revenues vs. under 13% of total revenues today. Note that we do not expect this to be the result of subscription revenues slowing dramatically, it will be driven by advertising finally hockey-sticking higher."

Spotify stock is on the IBD Tech Leaders list.

Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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