Spotify, which is set to become profitable for the first time since its founding in 2006 in 2024, makes its money mostly from paid subscriptions but has been aggressively expanding its advertising business in recent years. Now the company is unveiling a new strategy to strengthen its advertising business and offer advertisers AI-powered tools, The New York Times reported.
The streaming service will introduce a number of initiatives to simplify the ad buying process for advertisers. In addition, the company will introduce AI-powered tools for brands in the US and Canada that will allow them to automatically create scripts and immediately voice them. The number of AI-generated ads on the platform is expected to increase significantly in the near future.
Spotify, meanwhile, says its ad serving is "more nutritious" than other services. Alex Norstrom, Spotify's co-president and chief business officer, believes most apps will soon "scroll themselves," like TikTok videos, requiring even less effort or awareness from users. At the same time, the streaming service, he says, "requires commitment."
Norstrom also notes that Spotify users are more engaged with the platform. They understand the technical nuances of joining a "jam" — a feature that lets you listen to music at the same time as others, meet podcast hosts who have hundreds or even thousands of episodes, or press play on a 48-hour audiobook. He says this more engaged audience can be more receptive to advertising, which will be an advantage for advertisers.