Spotify revamps self-serve ad platform on heels of record Q2

Dive Brief:

Spotify has rebranded its self-serve ad platform, formerly known as Spotify Ad Studio and now named Spotify Ads Manager, per details shared with Marketing Dive. The move introduces a new look and enhanced advertising capabilities.
New features include a simplified user experience and improved audience and targeting functionality, including an expanded menu of interest segments. New ad formats will help brands engage consumers with video.
Several advertisers have already leveraged Ads Manager, including travel brand Contiki, which ran a campaign through the platform and saw a 267% increase in clicks to its website, per release details. The latest move from Spotify arrives following a record second quarter.

Dive Insight:

Spotify is attempting to shore up advertiser investments with a new look and enhanced capabilities that could help brands more easily connect with the platform’s 626 million monthly active users. The move rides on the heels of a strong second quarter for Spotify, which reported record profitability and a 13% year-over-year ads revenue growth.

Among the features of Spotify Ads Manager are enhanced targeting and audience capabilities, including an expanded menu of interest segments that will become available later this month and offer brands more opportunity in regard to the audiences they reach and test. Spotify will also release an Audience Manager tool that will offer a dedicated home for advertisers to manage their saved audiences. Audience Manager will be released in closed beta before its general release in 2025.

Spotify also recently introduced new ad formats to Ads Manager with the goal of helping brands engage consumers with both audio and video. A Canvas format serves as an optional companion and visual asset that extends the popular looping visual capability that plays during songs to audio ads. With the Opt-in Video format, a brand can be displayed front and center alongside the music a consumer is streaming.

Brands including World Rugby, Ionos and Monge are already using the new Spotify offerings. Contiki recently leveraged Ads Manager in the U.K. for a campaign encouraging Gen Z travelers to get on the road with the company’s travel programs. A mix of audio and video ads featuring user-generated content spotlighted real travel stories, and resulted in Spotify outperforming other channels by 32%, per release details.

Spotify reports it has made “significant” investments in its Ads API that will enable it to bring Spotify Ads Manager capabilities to over 50 new markets down the line. On the measurement front, the company recently introduced first-party measurement solutions on Ads Manager with Spotify Ad Analytics and Pixel. The company also expanded its third-party solutions via Integral Ad Science, DoubleVerify, Appsflyer and Kochava.

Spotify in the second quarter reported 21% YoY revenue growth along with a record-high operating income, gross margin and free cash flow. The company also saw premium subscribers grow 12% YoY to 246 million. A positive quarter for the company follows struggles last year that resulted in it letting go of over 1,500 workers, or 17% of its staff, in December.