Can you run CTV ads on Spotify?

Overview

Connected TV (CTV) advertising on Spotify represents a significant expansion of the platform's advertising capabilities beyond traditional audio formats. Spotify, founded in 2006 in Stockholm, Sweden, initially focused on music streaming but has evolved into a comprehensive audio platform including podcasts and audiobooks. The company went public on the New York Stock Exchange in 2018 under the ticker SPOT. Spotify's advertising business has grown substantially, with ad-supported revenue reaching €501 million in Q4 2023, representing 12% year-over-year growth. The move into CTV advertising aligns with broader industry trends toward streaming video advertising, which is projected to reach $33.6 billion in the U.S. by 2025 according to eMarketer. Spotify's CTV advertising launch in 2021 came as the company sought to capitalize on the growing CTV market and compete more effectively with video streaming platforms for advertising dollars.

How It Works

Spotify's CTV advertising functions through integration with various connected TV platforms and devices. When users stream Spotify on CTV devices like Roku, Amazon Fire TV, Apple TV, or smart TVs, video ads can appear during their listening sessions. These ads typically run for 15-30 seconds and appear between songs or during natural breaks in content. Advertisers can target audiences using Spotify's first-party data, including listening habits, playlist preferences, demographic information, and location data. The ads are served through Spotify's proprietary advertising technology platform, which handles ad insertion, targeting, and measurement. Advertisers can purchase CTV inventory through programmatic channels or direct deals, with options for various ad formats including standard video ads and interactive formats. Measurement capabilities include reach, frequency, completion rates, and attribution metrics to assess campaign effectiveness.

Why It Matters

Spotify's CTV advertising capabilities matter because they represent a strategic diversification of the platform's revenue streams and advertising offerings. For advertisers, this provides access to Spotify's massive user base of 615 million monthly active users through a premium video format on large screens, potentially increasing engagement and brand recall compared to audio-only ads. For Spotify, CTV advertising helps capture more advertising budget from brands that traditionally allocate significant resources to television and video advertising. The CTV format also enables richer creative possibilities and better aligns with consumer trends toward streaming content on television screens. As traditional linear TV viewership declines and CTV adoption grows, Spotify's position in this space allows it to compete more effectively with video-first platforms like YouTube and streaming services. This expansion supports Spotify's broader strategy to become a comprehensive audio platform while increasing its share of the digital advertising market.