Spotify rebuilds ad business around automation, AI to win bigger media budgets

**Kimeko McCoy** (0:06)
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Hello, hello, and welcome to another episode of The Digiday Podcast. I'm Kimeko McCoy, Senior Marketing Reporter here at Digiday, and this episode is coming to you live from the Cannes Lion International Festival of Creativity, where Digiday and the team is on the ground covering some of the massive shifts that are happening right now in the ad industry. Yesterday, my colleague, Seb Joseph, kind of set the stage with our Cannes Lion briefing, so if you haven't had the opportunity to check that out, please do. But he essentially mapped out what's going on with the industry's power shifts in the sands from platforms to agencies and creators and how AI is accelerating change across all of media, how it's bought, sold, and everything in between. I'm here live at the Spotify studio in Cannes, and I'm joined by Brian Berner, VP of Advertising Partnerships at Spotify, to talk about Spotify's evolving ad business, its push into the video ads, and how it's evolving to solve the audio measurement challenge that media buyers are working through. So, super excited to have this conversation.
Brian, welcome to the show.

**Brian Berner** (1:50)
Thank you for having me.

**Kimeko McCoy** (1:51)
How's it been so far?

**Brian Berner** (1:53)
Cannes, that is?

**Kimeko McCoy** (1:54)
Yeah.

**Brian Berner** (1:55)
Very hot.
This is, I think, the hottest Cannes, at least I think, I've experienced in the past decade. But very excited for the week. I'm very excited for the programming lined ahead for Spotify, our daytime programming, our nighttime concerts. We're very much looking forward to another wildly successful Cannes.

**Kimeko McCoy** (2:15)
Absolutely. Absolutely. Well, I am super excited to talk to you. The point of the conversation, and why I wanted to chat with you today is advertising, right? That's obviously the reason why we're all here on the ground, with marketing and creativity and things like that. But Spotify's ad business is in growth mode, I would say. At Investor Day, you guys had a couple of talking points about what the road ahead looks like. So hoping to get a better perspective on where you guys have been, what you guys see happening on the ground now with your ad business, and then moving on to the future. So start by telling me, like I said, Spotify has been the last couple of years rebuilding its ad techs and hacks. So there's more ad formats, more ways to buy better measurability and things like that. But talk to me about what that growth looks like to you from this year, from last year to this year.

**Brian Berner** (3:00)
Yeah, yeah.
Well, so there's kind of like three questions in one there. So I'll try and unpack those. But I think first and foremost, very quickly, where we were to where we're going. Let's start with overall strategy of leaning into automation.

**Kimeko McCoy** (3:18)
Yeah.

**Brian Berner** (3:18)
So we identified a big gap in our strategy with where the advertising world was going with respect to more automated planning and buying. So with that said, we invested in building out the Spotify ad server.
We made further enhancements and overhauled Spotify ads manager for clients that preferred self-service buying. And then we also stood up and launched the Spotify ad exchange. So I would say the big theme there was just getting more in line with how the industry is moving towards automation. To then though, a from to is what was predominantly an audio platform or audio first and still is.
However, if you look at Spotify's consumer facing products, especially with cohorts like Gen Z, watching is becoming a much bigger form of consumption on the platform. It started with video podcasts and now we're introducing music videos. So as part of the transformation process, we also really had to think through a more holistic strategy to be able to engage with consumers in those moments that they were in focus watching Spotify. And that's where we have also spent this past year focusing a lot on introducing new video and display surfaces to the platform. And then third, and big reason why we're here at Cannes, is just focusing on fandom. And Spotify's role within culture and live experiences, and how do we bring online to offline. And so you're going to see us doing a lot more in experiences and brand partnerships within life.