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Spotify rolled out AI-generated audio ads aimed at its massive Gen Z audience. Announced April 2, 2025, at the company’s Advance event in New York City, the “Gen AI Ads” let advertisers create scripts and voiceovers using artificial intelligence (AI) at no extra cost.
The music streaming giant’s new tools target their 251 million Gen Z users who use Spotify throughout the day, often away from screens. These young listeners make up a big chunk of Spotify’s 425 million users who hear ads.
“We’re bringing our decades-long AI expertise to our advertising partners to enable them to create scripts and voiceovers at no additional cost, making it easier than ever to create high-quality, scalable audio ads,” Spotify said in their press release.
Right now, the AI ad tools are only available to advertisers in the United States and Canada through Spotify Ads Manager. The company plans to expand these tools to the UK next.
Spotify also launched the Spotify Ad Exchange (SAX), a marketplace where advertisers can reach Spotify’s logged-in audience through real-time auctions. SAX works with audio and video and displays ads for music, with podcast ads coming soon.
The exchange operates in several regions, including the US, Canada, Europe, Australia, India, Brazil, and Mexico. It partners with major ad platforms like Google Display & Video 360, Magnite, and The Trade Desk.
Bridget Evans, Spotify’s Global Head of Ads Business Marketing, emphasized the importance of the ad-supported model in an interview with The Hollywood Reporter.
“I would say that like half of our audience is on the premium tier, and so we want to make sure both experiences are positive for the consumer, and positive for brands,” Evans said.
Spotify reports their ad revenue has more than doubled since 2020. Their Ads Manager revenue grew over 50% in the last quarter of 2024. The company made a profit for the first time for a full year in 2024.
The streaming service also announced better measurement tools, including an updated Spotify Brand Lift tool and Spotify Pixel. These help advertisers track how well their campaigns perform.
For non-premium users, these changes mean they’ll likely hear more AI-created ads. For advertisers, it means new ways to reach young listeners who use Spotify as their “daily companion.”
