Both carousel ads and sponsored playlists are served to users of Spotify’s free tier. 

Meanwhile, the company has enhanced its performance tooling. It added A/B testing capabilities and automated bidding—which uses machine learning to optimize ad delivery and budgets—directly into its Ads Manager. Although, these features are considered table stakes for major advertising platforms. 

With the updates it’s clear that Spotify is positioning itself as a more full-stack ad platform—one capable of delivering upper funnel and mid to lower tier funnel offerings, in addition to performance tools that help marketers get more out of their media buys. 

“What we’re trying to build from an ad strategy is to challenge that preconceived notion of audio just being an upper funnel reach play and build a full-funnel suite,” Berner said. “Do I think overnight we’re going to go from upper funnel to suddenly driving bazillions of app installs? Not overnight. But when I think about the next five years…we are absolutely trying to challenge the status quo and show Spotify to be a full-funnel offering.”

To support that vision, the company is bulking up its ads infrastructure and increasingly investing in AI. Last spring, it launched a global ad exchange and began letting advertisers produce custom audio ads using generative AI tools at no additional cost. This year, it plans to roll out additional AI updates, Berner said.

Asked why a marketer would choose to shift more spend toward Spotify particularly in a crowded market with behemoths like Meta, TikTok, and Google vying for dollars, Berner said simply: “User engagement, user attention, time spent.” He might be on to something. On average, consumers spend about two hours a day on Spotify and 90% use Spotify as part of their daily routine, according to recent survey data the company collected from over 5,000 consumers. For marketers, he said, it’s that user attention and engagement that should prove appealing. “That’s advertising 101: Fish where the fish are.”