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- [00:00]
Sarah Sluice
Foreign. Welcome to Ad Exchanger Talks, the podcast
- [00:15]
Katie English
devoted to examining the issues and trends in advertising and marketing technology that matter most to you.
- [00:24]
Samantha Dasher
Today's episode is sponsored by Verve. First, Verve captures over a billion daily search, AI chat and zero party signals, giving brands and publishers a real time understanding of intent.
- [00:45]
Anthony Vargas
Hi everyone, this is Anthony Vargas, Senior Editor for Ad Exchanger. Thanks for tuning in to Ad Exchanger Talks. If you're someone with eclectic musical tastes, you know it can be hard to decide what playlist you're in the mood to listen to. Is it more of a yacht rock coastal grandmother kind of day, or are you feeling more of a divorced dad hipster sort of vibe? Fortunately, we've got Spotify to help us decide. The streaming platform is known for building deep user profiles based on its subscribers listening and viewing habits, and it surfaces those insights in products like it's end of year wrapped and in daily mixes whose names can feel very off the wall on one hand, but also totally on point. But how does Spotify translate listener categories like Patient, Nervous, Vampire into audiences that advertisers can target using programmatic Tech? Joining us today to explain is Katie English, the company's global head of Ad product. Katie's been instrumental in helping guide Spotify's product direction as it builds out its own ad tech stack from the Spotify Ad Exchange introduced last year to the platform's revamped self serve Ad manager. On today's episode, she shares her insights from building those systems, including how Spotify designed them with the needs of AD agencies and DSPs in mind. She also previews some new ad products coming from Spotify, including a sponsored playlist format that will offer listeners a break from in stream ads. And before you think we had an ad tech conversation in 2026 without mentioning AI, she also shares how the company is thinking about the agentic AI trend, AI ad creative end to end campaign automation and whether AI generated content is really safe for advertisers. You won't want to miss it, but before we dig in, we're just on the other side of our Programmatic AI event which took place in Las Vegas last week and next up on the events calendar is the Cannes Lions. Happening June 22nd to the 26th, ad exchanger will be on the ground at Cannes and we'll be covering all the hottest news in between sips of and running between meetings. If we didn't see you at Prog AI, we hope to see you in France. And with that said, let's get to this week's episode of Ad Exchanger talks. All right, we're here with Katie from Spotify. Katie, thanks so much for joining the pod.
- [02:54]
Katie English
Yeah, thank you for having me. Hello.
- [02:57]
Anthony Vargas
So I wanted to start with, like, a fun question, like we usually like to do with our Ad Exchanger Talks episodes. And the thing I wanted to ask you about has to do with Spotify Wrapped, which I think, you know, everybody knows has become one of the platform's most well known products. Products. We've seen a ton of apps launch, copycats of Wrapped. And Wrapped really speaks to Spotify's ability to gather a deep pool of data on its users and turn that into fun, engaging experiences. And Spotify just introduced a new feature for Wrapped last year called the Listening Age, where the app tells you roughly the age that your listening habits align with. So I was curious, Katie, how old does Rapt think you are?
- [03:35]
Katie English
Oh, I love this question. Rapt is such a highly anticipated event every year, and I feel like the team really crushed it. Last year. Wrapped let me know that I was at least 15 years younger than I actually am, which was very interesting to see. I definitely went through, like, a big pop phase at one point last year. So I think they really captured my younger listening habits, which was delightful to me. How about you? How was your listening age?
- [04:00]
Anthony Vargas
Yeah, I'm kind of in the same boat. So, you know, my. I'm, you know, pushing up against 40 now. My. My Rapt was like, had me pegged as, like, being in my mid twent, I think, because I was listening also listening to a lot of pop music this past year and also a lot of, like, electronic dance music, like club bangers, those kinds of things.
- [04:17]
Katie English
Yeah, same. Same boat. And I was like, you know, keep me young. I like it. This is great.
- [04:22]
Anthony Vargas
Yeah, you won't find me actually in the club. Like, I'm too, you know, I'm too. I'm too millennial for that vibe.
- [04:27]
Sarah Sluice
Oh, I'm tired.
- [04:28]
Katie English
I'm tired.
- [04:29]
Anthony Vargas
Exactly. Yeah. Too tired for that. But, yeah, I'll listen to it on Spotify all day. Yeah. And then, yeah, you know, when it comes to kind of like, other, you know, big changes at Spotify, you know, beyond Wrapped, you know, there's been a ton of changes to Spotify's ad platform as of late. For those of us who maybe haven't been following the news, can you just give us a quick recap of where Spotify stands as an ad tech platform now? Including, you know, the recent additions like Spotify Ad Exchange, recent updates you made to ad manager, and whatever Else you want to shout out here?
- [05:00]
Katie English
Yeah, we've had a lot of exciting progress in our ads platform over the course of, let's say the last year. So about a year ago we launched the Ad Exchange to much fanfare. Over the course of the last year we've really significantly expanded the global footprint which we're really excited about. So we've got integrations with over 30 DSP partners worldwide, which is fantastic. We've seen, oh gosh, over a 200% increase in the number of advertisers actually activating with Spotify through the Exchange. So a lot of really great progress there. Most recently we've unlocked Programmatic Guaranteed as a complement to PMP and OMP that already existed. So really just continuing to give advertisers choice and flexibility in how they show up there. So a lot of good stuff happening. And on the Ads Manager side we're also investing incredibly heavily. So if you looked at Ads Manager a year ago and look today, you'll just see all of these sort of fine tuned improvements in how advertisers can come by on more of an outcome based focus. So really focusing on performance measurement, quantifying your outcomes and really helping advertisers tap into the full breadth of formats that Spotify offers. So display. We recently released a carousel format. We've introduced new bid models, more automation. Just a lot of really, really great
- [06:14]
Anthony Vargas
stuff behind the scenes and you know like we were kind of alluding to with the rap discussion, you know, you guys, you guys gather so much like you know, interesting data on your audience's listening habits and you know you're always curating like daily playlists based on their interests and you know a lot of times these can have very fun like off the wall names and like different categories and stuff. Like here are some examples from like my wife and I's like recent playlist suggestions. So happy indie fluorescent yacht rock coastal grandmother and patient Nervous Vampire was a good one for my wife's wrapped a couple of years ago. So I imagine like these like kind of like you know, playlists and like, of like different listening categories and stuff are really useful for kind of breaking down the audience into like different buckets that can maybe be targeted by advertisers. But how do you kind of translate some of these more like fun categories into audiences that programmatic ed tech can actually understand?
- [07:10]
Katie English
Yeah, well one of my favorites and I got was a divorced dad Hipster Tuesday. I love it. That that is me. I think these, so the playful names for these playlists I Think really tell a lot about the personalization that goes into them behind the scenes. And it's such a great example of the depth of the first party data that we have around how Spotify users are engaging with content on our platform. For advertisers, it really helps tell a very compelling story about where people are most passionate, what they're fans of, what they're learning, what they're enjoying, what they're listening to, what they're watching. And it gives us a lot of really rich signal. I mean Spotify has over 760 million logged in users. That logged in piece I think is really a valuable asset. It gives us just a really rich playground for us to better understand user behaviors, consumption patterns and really give advertisers something unique when they're coming to reach their audience here.
- [08:05]
Anthony Vargas
And like when you think about like one of the things I like hear all the time though, when it comes to like these like different like audience like taxonomies and stuff that are out there for programmatic tech to use, it's like there's always like a, like a bridging the gap between like you know, maybe like standard iab, like audience like categories and like you know, more like proprietary stuff that you're doing. How are you guys thinking about that? Are you thinking about like trying to like, you know, align with like those existing taxonomies? Are you more like working on your own kind of like internal taxonomy?
- [08:33]
Katie English
So our ideal is to really actually span both, right? The, the off the shelf shelf sort of existing taxonomy is really important for advertisers to think about sort of consistency. So am I reaching the same category of individual across these different platforms where appropriate. So my really sort of maximizing. But then there also is that kind of special sauce, the unique to Spotify piece that we really want to highlight and embrace. So for us it's really about marrying the two. So giving advertisers like what they're used to, the comfort of that standard taxonomy. And then what's special about our listening propensity and our consumption data that allows us to sort of tell you something more about the individual.
- [09:11]
Anthony Vargas
And then when we were talking a little bit about like some of the recent updates to the ad platform like you mentioned, you know, you've recently introduced these like carousel like ad formats. I saw another ad format that you guys were looking at introducing was sponsored playlists as well. It might be a little bit too early days on the sponsored playlist piece, but I was wondering if you could give us an idea of like you Know what might a sponsored playlist look like? Is that basically like a brand making a personalized mixtape for me?
- [09:38]
Katie English
Yeah. So we are live in a global open beta here, so not too early days. And you're right, we did recently revamp the sponsored playlist product on Spotify and really a lot of incredible work went into making it a very rich experience for both the listener and for the advertiser. So what we've thought about is making sure that brands can have 100% share of voice while the Spotify listener is consuming that playlist. So, new Music Friday, today's top hits, Rap caviar, some of our most highly engaged playlists. The advertiser gets, as I said, complete share of voice, including on the lock screen, including during sort of the show art. So if you're in focus, you're going to see the brand. If you're out of focus, you're going to hear the brand. And it's really about giving advertiser, excuse me, giving our users a better value exchange so they know that this advertiser has shown up and provided this sort of sponsorship for a less interrupted experience, which is a really great opportunity for the advertiser to be really embedded into it as well as for the user to get sort of a better listening experience. Overall, we're seeing a lot of really great results. Advertisers love it and listeners have been really receptive to saying, hey, yeah, it's really clear, I give you a little bit of my time and you give me a lot more. It's a win, win for everyone.
- [10:48]
Anthony Vargas
And as far as like the playlist itself goes, it would still be curated off of like what the listener is like into. It's not like, you know, the brand picking like tracks or anything like that.
- [10:56]
Katie English
Yeah, not yet though. I love that idea. This is a fun one. I'll take back to the team. Right now we're focusing on providing sponsorship opportunities for those sort of Spotify curated playlists. So again, like that rap caviar, that New Music Friday, this Country hits, all of those sort of playlists that I think are very well known in the space.
- [11:14]
Anthony Vargas
And then you know, going back to the tech piece, like, you know, we also, we already mentioned, you know, the big introductions have been the Spotify ad exchange. Also like, you know, those updates to the ad manager self serve platform and obviously, you know, as the global head of product for Spotify for a VAD product, you've been very involved in, you know, managing the teams that are designing these different things and all that. What what has been like the hardest part or like the biggest challenge in terms of like building out your own self serve ad exchange over the last couple of years?
- [11:45]
Katie English
Oh, I love that question. It's a fun one. I mean, building it from scratch honestly was a real treat. Like the opportunity to start from zero and really have an existing rich understanding of our supply was a really great head start. We have a phenomenal team of product folks and engineering partners as well as business partners who really helped make it very easy. If you're really going to push me on a challenge, I think really making sure that we were eating as much of the complexity ourselves. So the whole ethos, the whole sort of like guiding tenet of building the ad exchange was let's meet advertisers where they are, let's make it really easy to give them choice for how they want to buy Spotify. So historically we've been very direct sold. You really have to have a deep relationship with us that still exists, of course, or you have to come into our ads manager. But for advertisers who have these really deeply ingrained workflows in third party DSPs, we wanted to make it easy for all of those advertisers to access. So the bigger challenge was just wanting to move quickly and be everywhere all at once. But we had a lot of fun getting there. And again, we've really made a ton of progress over the course of the last year, evidenced by the 30 some odd DSPs that you can buy us in now.
- [12:52]
Anthony Vargas
And I think we might come back to how you guys are working with DSP piece later into the conversation. But for now I kind of want to stick on the more new and exciting kind of stuff, you know, along those, like, along those lines, you know, everybody's doing video these days. Spotify has been on its own, like, you know, big video push over the last couple of years, which, you know, some people might think is like outside the box for, for a traditionally audio focused platform. But there are a lot of ways that video makes sense for Spotify too when it comes to like, you know, the podcast stuff you guys are doing and also just like adding like a visual element to like the musical element as well. So like, how are you kind of like, like what are you focused on when it comes to monetizing video?
- [13:36]
Katie English
Yeah, it's a great question because you're right. Our sort of video catalog on Spotify has been growing really significantly. We've got I think something like 590 or so thousand video shows. So a podcast is sort of now either in your ears or you're watching it. So there's different ways to consume what I think is most interesting to your point around, like, is it outside of the box? I would argue no. We see that a lot of our users spending sort of dual time. So let's say about 80% or so of folks either watch or listen. They go back and forth and they're really engaging with this content in both ways from an advertising perspective that offers a really unique opportunity to kind of show up in your ears and for your eyes. So what we're most excited about is the ability to provide a much more enriching, like multi format experience that advertisers can take advantage of. So depending on the focus state, we can really serve the right ad experience at the right time. So for us it's just unlimited upside as we think about audio being an incredibly powerful format on its own. But now pairing that with video or sort of display opportunities has just supercharged what we're able to provide to advertisers.
- [14:44]
Anthony Vargas
And correct me if I'm wrong, Spotify is now selling all of its inventory, including music, podcasts and video through the Spotify Ad Exchange.
- [14:51]
Katie English
Right we are. You can buy that through the Ad Exchange, through Ads Manager, or through our direct partnerships. Everything everywhere.
- [14:58]
Anthony Vargas
How are you thinking about kind of like helping advertisers create a seamless experience across those different formats?
- [15:04]
Katie English
Yeah, it's a really great question because they are sort of decidedly different when we think about the buying propensity and sort of how we target. So some of what we're really focusing on is a making sure that each audience is sort of equally addressable. So if you're buying an interest segment, we want to make sure that interest segment can deliver across all of those contexts. So really again, like eating that complexity on our side and making sure that we are profiling our audiences accordingly and similar making sure that measurement and reporting tools also work seamlessly across the stack. You know, technically speaking, there is a very real difference between an ad that serves in the middle of two songs and an ad that serves in the middle of a podcast. Not to get too much into the guts, but you have a product person here, so I'll leave it there for the technical piece. But making sure that our measurement can work equally across those environments is really an interesting challenge. I'd also say just kind of building consistency in how advertisers think about these different contexts has been a challenge, but a fun one to be through facing with our partners. So for instance, in the Podcast world, a download has historically been an important currency, whereas a real rendered impression is a bit more valuable in sort of the display and video world. So how do we marry the sort of vocabulary of measurement and of delivery across these different formats in a way that makes sense to advertisers?
- [16:18]
Anthony Vargas
Yeah, and I love the, the measurement piece you brought up too, because that's like, that's the thing that always comes to the fore whenever we're having conversations with buyers. Just like, how do we actually measure this? You know, like, what transparency are we getting from platforms? Along those lines? Like, one of the, one of the big things we always hear from advertisers is like, they really want transparency into like where their ads ran. How do you guys break that down in your reporting?
- [16:39]
Katie English
Yeah, so we really try to think about making sure advertisers feel comfortable understanding the genres and the context to whatever degree possible. We also offer advertisers, most importantly, a lot of control over setting that context. And I think that's where it becomes more important is at the upfront outset of the buy, you tell us about your tolerance for different content, for different types of music, explicit listening, sensitive topics, things like that. You know, the podcast ecosystem can come with many different topics, genres. Even a single sentence in an episode can really change the context and sort of change the brand suitability. So we offer those advertisers a lot of control of the upfront so that they can feel confident that every dollar they're spending is going to a brand safe and brand suitable environment.
- [17:22]
Anthony Vargas
And then, you know, switching to kind of like more of like a revenue discussion. Spotify reported more than 2 billion in ad revenue last year. And according to Statista, Spotify has 30% of the global streaming music market. But then, you know, looking at the digital audio market more broadly, WPP expects that audio will account for just 4% of global ad spend this year. And they put a, you know, like a hard number on that. Dentsu predicts total audio ad spend will be about 12 billion by 2028. So, you know, I feel like I'm always asking this question to publishers and platforms that are in like emerging media channels like digital audio, even video, to an extent, you know, gaming, digital head of home, all kinds of different channels. But like, the conversation we always have is just like, what's preventing ad spend from catching up to where the audiences are and, you know, like, what needs to change to bring in more demand? What's your thoughts there?
- [18:17]
Katie English
I love talking about this, especially sort of sitting in the audio world because I think there's just infinite upside. Right. First of all, that Delta represents, in my opinion, a very real opportunity. I think there's a few things, and you'll hear me say this so many times the more time you spend with me, but as an industry, we have somehow decided that we value what our eyes can see more than what our ears can hear. And I really want to challenge that. I think we have to challenge that. And I think one big gap or one way to challenge that is with measurement. Reminding advertisers are really helping educate that audio is measurable, it is performant. We can make sure we understand how every impression is driving some sort of outcome for your business is a big piece. I also think there's a bit of creative friction, right? Advertisers are really comfortable with display and video. They know exactly what to create. They know how to make sure their brand voice really shows up in a genuine way in those formats. Audio, I think, can be somewhat of an unknown for some. So really helping reduce friction in the creative space is an important one as well. We're doing a lot of work there with Gen AI. I'm sure we'll talk about that at some point and just sort of like building that muscle memory. So I think for advertisers, one of the reasons why we're most excited about the ad exchange is it's a nice sort of testing ground. If you're audio curious, then come on into your preferred dsp, buy a little bit of Spotify, start to learn about what you can access, and then maybe you come into our ads manager and sort of unlock the full toolkit of measurements and of targetability and performance for sure.
- [19:43]
Anthony Vargas
And yeah, for any of our readers who are waiting for the AI discussion, we will get there. Bear with us.
- [19:47]
Katie English
Let's go.
- [19:49]
Anthony Vargas
But for now, I did, I had like one more question about like the video piece because, you know, like, like you just mentioned, you know, like there's a disparity in between, like, you know, valuing what our eyes can see and what our ears can hear. So like, you know that like, with that in mind, like, does the. Your video inventory bring in more demand or like more premium demand, higher CPMs than the audio stuff?
- [20:11]
Katie English
It really depends. Honestly, it's like the real true answer. It depends on what the advertiser is trying to achieve. We think less about kind of bifurcating our supply into sort of video and audio. We really try to think a lot more about what is the advertiser's desired outcome. Do you want to drive Web traffic? Do you want to drive app installs? Do you want to try drive lead gen? We offer all of that in our ads manager environment. So bidding against that outcome as opposed to thinking about an audio strategy and a video strategy separately, it's a really important way to approach Spotify with sort of a multi format, well rounded approach.
- [20:44]
Anthony Vargas
And then I thought this was like an interesting tidbit from a recent story I was reading at Digiday. They, they quoted an agency buyer who said that they like Spotify's inventory, but Spotify's private marketplaces don't always have enough inventory to meet demand. And I think that's like a great problem for like a platform to have where it's like, you know, your demand is outpacing like your supply supply. But I was curious, like, how are you, how are you guys thinking about increasing your supply of premium inventory to meet this like surge of demand you're seeing?
- [21:14]
Katie English
Yeah, I love this idea that there's premium inventory. It's all premium, right? Everything's logged in, so everything is premium. But really, I mean, when we think about consumption patterns on the platform, we do see a decent amount. So we have the average Spotify listener spending about two hours a day in Spotify and they say that it is a really essential part of their daily routine, which is a huge opportunity. So when we think about the supply available to us, it is right there. Yes, there may be sort of demand outpacing supply, but that just means it's really worthwhile, worth buying.
- [21:45]
Anthony Vargas
And yeah, I think that's a good place to leave the conversation for now. We'll, we'll take a quick break for some ads ourselves here and when we come back, Katie and I will be getting into a little bit of that AI discussion as well as a little bit more about how Spotify's approach in working with DSPs, agencies and other partners. Stick around, you don't want to miss it. Be right back.
- [22:20]
Samantha Dasher
I'm Sarah Sluice, Editorial director of Ad Exchanger, and with me today is Samantha Dasher, SVP of Publisher Strategy at Verve, where she works with publishers on audience development in what may be one of the most interesting moments that Open Web has had in a decade. So welcome Samantha.
- [22:38]
Sarah Sluice
Thanks so much, Sarah. It's great to be here.
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Samantha Dasher
Audience development is going through a real shift right now. How are you seeing discovery actually happen today?
- [22:48]
Sarah Sluice
Discovery is no longer a one way highway and honestly I think that's a very good thing for publishers. A reader might find a story through Google, a friend texting Them a link, a newsletter, a podcast, mentioned TikTok, or increasingly through ChatGPT, Perplexity, or Gemini. What's changed is that there are now more surfaces rewarding quality content instead of fewer. If you create something useful, authoritative or genuinely interesting, there are multiple ways for that content to travel to the consumer. At Verve, we have a unique lens into this because we see roughly a billion publisher searches and LLM prompts every day. That means we can watch behavior shift in near real time. And what we're seeing is that the strong content tends to win everywhere. A well reported article might rank in search, get cited by an AI assistant, show up in a newsletter and spark discussion elsewhere. And that compounding effect is real. And for publishers, it means the opportunity today is broader than it was during the era where everyone relied too heavily on one channel. So diversified discovery is healthier, more durable, and frankly, way more exciting.
- [23:54]
Samantha Dasher
So one of the biggest shifts that you just alluded to is that if I'm looking for information, I'm not typing it into a search engine as often anymore. I'm putting it in a prompt and it's giving me that full answer. So what does that open up? How does that change things?
- [24:11]
Sarah Sluice
Oh, a lot. Search queries were often really shorthand, two or three words with very little context. And prompts are very different from that. People are telling AI systems exactly what they want, often in full sentences with details, preferences, constraints and intent layered in. And that gives a much richer understanding of what consumers actually care about. Someone isn't just typing running shoes anymore. They're saying that they need marathon shoes under a certain budget because they over pronate and train four days a week. That's a completely different level of signal. Because we sit across both search and LLM activity at scale, we get to see that evolution happen side by side. It's one of the clearest indicators of where audience behavior is going. And for publishers, I think this creates real opportunity. The sites with actual expertise, niche, authority and content that answers nuanced questions well are positioned to win. This is a much better environment than the old game of chasing keywords and volume for the sake of volume.
- [25:17]
Samantha Dasher
So with discovery changing so much and happening in so many places and new places, how are the publishers that you think are the most forward looking and innovative thinking about where to invest?
- [25:31]
Sarah Sluice
The smartest publishers we work with are doing two things at once. They're protecting and optimizing the channels that still matter today, while also investing in assets that compound tomorrow. Search still matters. It drives meaningful traffic and revenue. And publishers Doing it well should absolutely stay focused there. But we're also seeing real momentum behind newsletters, registered users, first party data strategies, direct relationships and content built to perform across AI surfaces. Those investments travel further because they create value across multiple channels at once. And part of what we help publishers do at VERB is understand where they already appear in search and LLM environments, where white space exists and where they can grow. When you can see a billion of these moments a day, patterns become very clear. I genuinely think this is one of the most interesting moments Publisher has had in years. And I've been doing this for 16 years now. There are way more ways to reach audiences, more ways to monetize quality, and more value being placed on what great publishers do best.
- [26:37]
Samantha Dasher
So audience development is expanding and it's important to think of audience development as something that's encompassing AI as well as all of these other tactics that people have been using for a long time. So thank you, Samantha, and thank you to VERB for supporting Ad Exchanger podcast.
- [26:54]
Sarah Sluice
Thanks so much, Sarah. It was a real treat.
- [27:12]
Anthony Vargas
All right, and we're back. So, Katie, the hot topic on everybody's mind in ad tech right now is agentic AI. How is Spotify thinking about using AI in its ad platform?
- [27:23]
Katie English
Yeah, I love this topic. It's a spicy one. It's an important one. So Spotify is an incredibly AI native company. AI has really been a part of our blood here in our R and D orgs, especially with product and engineering. Since it's sort of early days, which we're excited about. Specifically in our ads business, one thing we really focus on is using AI in a very productive manner to really try to solve very real world problems for our advertisers. So no performative AI, no like sparkles in the ui. Just to say that we have it. It's really about being very tangible with what AI gets for you. A perfect example we spoke earlier about how we might sort of lower that barrier to entry into audio is our gen AI tooling for creating audio assets. So to date, this is globally available in our Ads manager and we are constantly extending the number of languages that we support here. But what you can do in a matter of seconds with just a few prompts is generate an audio ad that is not only really representative of your brand voice and sort of who you are, your identity, because of a level of curation, but equally focused on performing well. On Spotify, we've had thousands of customers use this tooling already. We've had sort of have over 20,000 different AD iterations created with it, and we see that they perform really well. So I think that's a great example where AI is being used to solve a problem. But that's just the tip of the spear, right? There's so much more that AI can do as an amplifier of all that human creativity that goes into things. Another really fun recent example, we just released a Claude plugin for Spotify. So through the command line you can, in a sentence, ask for claw to help you build a campaign on Spotify and it will go ahead and use our API to do that for you. It's a really great way to kind of abstract away some of the complexity that typically comes with plugging into an ADS API for the first time. And I think this is just a sort of an early use case where we think about agents as our customers operating on behalf of the very real humans who are doing all the thinking and strategy behind the scenes. So a lot of really fun opportunity in this space. We can spend a lot of time talking here if we wanted to.
- [29:31]
Anthony Vargas
Yeah, I want to pick up a little bit more on like, both of those points. So, like, so you mentioned the, the language translation piece that I feel like that's like, such like a big thing right now for like, especially like, for like growing like, ad tech platforms. Like, you know, I know Reddit talks a ton about like, you know, translating their content across like all kinds of different languages. That's more like on the content piece you were talking about, like, you know, translating Ad Creative into different languages to suit, like, the different, you know, language content that you guys have on your platform. I was curious like, are you also looking at it on the content side, like translating like, say like podcasts into different languages to like, increase like your, your audience reach? Or is that something you guys aren't interested in?
- [30:10]
Katie English
I'm sure our podcast team has lots of fun work in the progress. We're thinking a little bit more about ads use cases within my team, at least on the ad side. But, but I'm sure there are many, many different ways that we can be
- [30:20]
Anthony Vargas
using the technology on the, on the Ad Creative piece. Like, are you doing any kind of like, completely AI generated ad creative? Not something that you're tipping your toes?
- [30:30]
Katie English
We are. Yeah. So we have both our own models for sort of script generation for an audio ad today, as well as our own models to sort of build the text to speech. What's fun about that, the text to speech in particular is that most of that is powered by proprietary text. So it's first party Built, Spotify owned. And some of the voices are blended employee voices, which I really like is a fun little behind the scenes. So you'll never hear Katie's voice directly, but we've had a number of volunteer employees report themselves and we've created these blended Personas to really give a really rich library of different voice options to advertisers. One concern that folks flag all the time is won't they all start to sound the same? Right. If it's the same AI tooling building these audio ads over and over. And that's a really big no no for us. We want to really decidedly avoid that. So we have a really rich set of voices. We have a number of different sort of tones and attitudes that are configurable. Advertisers can give a lot of context around sort of words to use, words to not use, how to show up in a really genuine and authentic way. We fully mix that then with background tracks and we create a fully mixed audio ad for you in a matter of seconds. It's honestly, it's really fun.
- [31:40]
Anthony Vargas
And then the other piece that ETS there where you have the kind of like, you know, the API integration where like, you know, you're helping using AI to help with campaign setup and things like that, that, that, that really jives with like a lot of like those kind of like early use cases we've seen for agentic AI where it's like, you know, like workflow, kind of like management campaign set up kind of things. But like the, I guess the sort of next step there is like autonomous, like end to end, you know, like agents like running a campaign like completely like autonomously and then like you know, with some like human oversight, you assume are, are you guys like interested in like building towards like that like end to end automation or you feel like there's some risks there that you want to avoid. What's kind of the philosophy there when it comes to end, to end, to end agentic automation of campaigns?
- [32:25]
Katie English
Yeah. So I think there's a lot of opportunity when we think about sort of how AI can continue to automate and really introduce more efficiency into the end to end buying process. And I think we're really working now to decide sort of what our core principles are when it comes to sort of enabling that level of automation. For us it's really about working with our partners, our advertisers to figure out sort of where's their appetite to say fully automate this or we want sort of a human judgment layer here. But we think there's a lot of potential upside for efficiency here. As we think about sort of all of the ways that sort of the modern advertiser is, is managing a very full buy. We want to make sure that we're just sort of giving them the tools to be as efficient as they want to be. So it's all about a human layer of control.
- [33:08]
Anthony Vargas
And on the, on the content piece, when it comes to generative AI, you know, there's all kinds of different opinions when it comes to this. I've heard from sources on the publisher side and also who work in brand safety who are concerned about the proliferation of AI generated content online. You know, they kind of, you hear the talking point all the time, like, you know, AI slop is the new mate for advertising inventory. But then you also hear all the arguments on the other side of the coin about how AI is helping a wider range of people create music, video, other things that they wouldn't have the resources to create otherwise. And, you know, Spotify has had AI generated music explode on its platform recently. You've also like introduced some tools to let users create their own AI generated podcasts, which I think is still either like a beta thing or like very early days there. Where do you guys kind of stand on just like whether AI content is suitable for brands to advertise against?
- [33:58]
Katie English
Yeah, I mean, where we think about it is really giving control and choice to the brands. So we don't really want to be the sort of arbiters of judgment and taste there. Our, our goal is to sort of make every, every tool, every control as accessible as possible. So from the advertiser perspective, we give you a lot of controls, as I mentioned earlier, around sort of episode topic and brand suitability, things like that. So it's really up to the advertiser to decide their personal appetite for running adjacent to different types of content.
- [34:27]
Anthony Vargas
Would you have like a no AI generated content, like setting, like, you know, or like, would it be more like, you know, maybe I'm okay with gen AI content in like this context, but maybe, you know, less like in this context. Like, how do you think about like the nuance of like giving that control?
- [34:42]
Katie English
Yeah, it's a really fair question. I'll be honest. I think we're still working through that with our advertising partners. So as I said, we sort of solicit a lot of feedback to understand appetite. I think most folks are really embracing the fact that AI is playing an increasingly important role in sort of the content economy right now. Obviously there's sort of different ends of the spectrum there of sort of quality and output and things like that, but completely alienating it or treating AI as sort of a very binary, this is AI or this is not, is probably an infeasible future just given sort of where we are today. So for us again, it's just all about sort of letting advertisers choose their appetite and their comfort level with it as opposed to us trying to be arbiters of that decision.
- [35:21]
Anthony Vargas
And then continuing on the topic of how you guys are working with buyers and buy side platforms, the latest number I've seen is that there are 50 DSPs integrated with the Spotify Ad Exchange. What's kind of stood out in terms of either onboarding DSP partners or things that DSPs want out of the platform form? You know what's kind of stood out there and like the. As you're building that, that partner list?
- [35:46]
Katie English
Yeah, I mean it's always data, Data, data. Like DSPs are most excited when they have the opportunity to tap into a unique audience pool. And we go back to that sort of 760 million logged in listeners. I think Spotify really does show up with a very strong value prop for a DSP to say, hey look, integrating there does feel incremental. It feels like we can reach users in a different environment, reach some new people here. So that's been sort of a really powerful vector for us to think about expanding our partnerships on the Ad Exchange side.
- [36:16]
Anthony Vargas
And Spotify has made a couple of big announcements in terms of working with some of the big DSP players, the trade desk, Amazon dsp, just to name a couple. I was curious, what can you tell me about maybe some of the more mid tier and specialist DSPs that you're working with and what's your philosophy there? Are you finding a lot of, you know, uptake from like audio focused, like DSPs, video focused, DSPs, podcast focused DSPs, any, any, any kind of like, you know, specialist niche niches that are standing out there?
- [36:48]
Katie English
Yes, to all of the above. What's most exciting? I think again, I'll repeat myself. Right. We are most interested in giving advertisers choice. So you're right, we have integrated with sort of all of the big names that you are sort of traditionally accustomed with in the industry. But we're not alienating any of the other players as well. We do see demand come from a very long tail number of partners through some of our supply side integrations. And for us it's just a really exciting way to kind of understand where is their appetite in the ecosystem to try to activate on Spotify. So it really has been a helpful vector for us to start to curate a more thoughtful understanding of who's activating what verticals, are seeing interest and again, giving advertisers choice. If you want to buy Spotify, we will show up in a DSP near you and make it as easy as possible for you to buy.
- [37:33]
Anthony Vargas
And then, you know, another obviously huge piece of working with the buy side is working with agencies. And you know, agencies are facing their own kind of like, you know, challenges and also see changes right now when it comes to just like how, how they're thinking about incorporating AI into their workflows, how they're thinking about, you know, pushing some of that stuff to like more agentic solutions. They're designing their own in house stuff, they're white labeling all kinds of stuff from like third parties as well. So what do you, like, what do you, what are your kind of like key priorities right now when it comes to working with agencies, Especially when it comes to integrating with some of those like AI tools that they're bringing on board?
- [38:10]
Katie English
Yeah, I mean agencies are such an important part of our growth story and of sort of the, the success of our, our advertising business to date. So we really love our agency partners. We really think about is exactly what you said. Like they're building their own efficiency tools, they're building their own workflows to kind of help make sure that they are activating for their brands in as efficient a way as possible. So for us showing up being good partners, understanding what is it that you need from our ads API, what is it that you need from a data perspective? How do we work sort of, you know, hand in hand together as you think about an agency building out their toolkit so that Spotify shows up in a really productive manner in that toolkit. So we've got some really strong partnerships there and we're really grateful for them and we really want to sort of make sure that we are giving agencies the flexibility and the tooling they need to either buy us in their DSP of choice. We use our API to kind of integrate Spotify into their automated workflows in a very natural way.
- [39:04]
Anthony Vargas
And then in terms of like the actual advertisers themselves, like you alluded to earlier, Spotify has seen 200% increase, 200 plus percent increase in monthly active advertisers using the Spotify Ad Exchange since it launched last year. In that mix, are you seeing like more performance advertisers, more brand advertisers A mix of both?
- [39:27]
Katie English
Yeah, I think a real mix of both. And that's one of the things that gets me most excited about the progress we're making, both with the Ad Exchange, but also with our Ads Manager platform. I think Spotify obviously has a very real role to play in that brand awareness realm, but the performance end is growing and quickly. When we think about that video supply that we have, that display supply, we have the actual measurable power of audio alongside those two other formats, we have a very real performance business that is evolving. So, so it's been really rewarding to see sort of maintaining that position as a brand play, but also extending ourselves into the mid and lower funnel through our integrations with the Exchange as well as through our Ads Manager.
- [40:06]
Anthony Vargas
What's been like the most like, you know, maybe helpful thing from like the buyer's perspective or like, maybe like the thing that you guys have added from like a, you know, demonstrating performance standpoint that like, you know, is either seen like a lot of like adoption or that's like, stands out as particularly valuable for performance advertising.
- [40:24]
Katie English
I think where I get excited, especially in our Ads Manager is some of the like, split testing tools and a B testing tools that we've introduced. So really giving advertisers just more options for them to quantify success. Right? So show up, measure. Of course we have an incredible measurement toolkit. We have all of our first party, you know, Pixel and everything there. We've got third party integrations, MMPs, everything, you know, the full gamut. So giving advertisers that toolkit and saying, yeah, come, come see for yourself, right? Come use any one of your preferred measurement tools, come find out how we perform for you and really work with us to understand that performance is very real here.
- [41:02]
Anthony Vargas
And I know like one of the things that always stands out whenever we're talking performance advertising on the ad format piece is like, you know, what can we do in terms of like, you know, making these like, formats more clickable or like more shoppable? And like, I know like Spotify's experimented with some stuff like, you know, like showing like a clickable like, card when like an audio ad is playing. And you know, like, there's also just like the traditional stuff that you, you can do in like podcast advertising where you have like, you know, those like affiliate codes that like the, you know, the sponsors can put in there to help kind of like prove some closed loop attribution on that. What do you, what are you kind of thinking about in terms of like, new ways to Kind of like either make things more clickable or just like more performant.
- [41:44]
Katie English
Yeah. So I think our carousel format is a really great example there when we've seen really high engagement. So, you know, carousel is not a new idea, this idea of these sort of swipeable cards. But what we're seeing is, you know, when we deliver ads with intent, with sort of the right algorithms driving the decisioning in our ad server, we actually deliver ads at the right time to an engaged user. When you do that, they are engaged, right? They, they swipe, they click, they really sort of take advantage of the relevancy of that ad. So, so that's some of the exciting investments that we're making. More on the performance side is making sure that we're hyper focused on the relevancy of the ad to the user and giving them formats that are engaging and that do generate those clicks and those sort of like feedback loops. So we better understand did we actually deliver the right ad to you at the right time? Was this palatable? Did you get excited about the product that you saw or the story that the carousel told? And we're excited to see some performance data really proving that, that.
- [42:39]
Anthony Vargas
And you know, when it comes to the advertiser mix, you know, I think like a lot of our listeners would like assume that like, you know, Spotify makes sense as like a platform for like music advertisers, live events advertisers, you know, maybe fashion, like things that are like related to like music, things like that. Have you been surprised by any like non endemic advertisers in your demand mix? Like, or like any uptake by like any particularly surprising ad vertical?
- [43:06]
Katie English
Yeah, I mean so I, yes, there was sort of like the endemic obvious opportunities, but we have advertisers from every ad category under the sun that you can imagine. I think a recent one that was shared with me by our sales team, we have a, an electronics retailer in Italy, I want to say called Euronics. They're sort of one of Italy's largest. And to see an electronics retailer where they're typically very video focused, you know, very kind of of in your face because electronics are not something you can really understand by piecing together what they look like in your brain. Right. And they've seen sort of really, really strong success using the ad exchange. So with, with DV360, I think something like a 28 or so higher ROAS compared to their traditional radio buys. Thinking about that. So you know, that's one example. The other place where I think we're really helping unlock demand from maybe unexpected or less endemic verticals is by using our gen AI tools. So we've actually seen those be an enabler for that sort of curiosity to play out from advertisers who say, hey, look, I don't know if I'm a fit. Let me find out. They make an ad in a matter of seconds, they activate, they measure and they see, oh, turns out I am a great fit, right? Because Spotify just has this really rich phenomenal audience that is incremental to work who I'm reaching in other places.
- [44:21]
Anthony Vargas
And then this was just like another thing I was curious to ask about just because I'm like, I'm, I'm trying to like dig more in on like you know, just like influencer marketing and how like brands and agencies are making their decisions around like who to partner with when it comes to like their influencer budgets. And like it struck me that like, you know, podcasters have like traditionally like been influencers in so many different ways. And like, you know, musicians were also like the original influencers even before, like we even kind of like had that, that phrase influencer, you know, like going back, like musicians have been so influential, setting so many different trends. So like, like, you know, you guys have a ton of musicians, a ton of podcasters on your platform. How are you guys thinking about unlocking influencer marketing budgets at Spotify?
- [45:06]
Katie English
Yeah, I love that idea. Like a new musician as the original influencer. Are we influencing right now? Is this happening? Is my tv?
- [45:12]
Anthony Vargas
You could make the case. You could make the case.
- [45:15]
Katie English
It's a great question though. And I think what you're, you're getting at is this idea that sort of fandom is really, really powerful, right? Like, like fans feel such an affinity towards their favorite artists or towards their favorite podcasters, ideally both. And they really build these kind of, you know, relationships with them. This really sort of ability to trust their voice and trust their influence and sort of the pre influencer sense of the word. So for us, I think that's sort of an off the shelf option when you're working with Spotify is that every audience that you're buying, every piece of signal that we have is really tapping into this idea of this like deeply loyal, authentic relationship that the Spotify user has with the music or the content that they're consuming. It's a very trusted voice and your brand can show up alongside that. You know, I think very powerful.
- [46:03]
Anthony Vargas
And continuing along these lines, like, it also struck me that like when you think about like you Know the host red podcast ad as like an ad format. Like that really seems like it set like the template for so much of like what influencer marketing has kind of become with like these like, kind of like, you know, like product testimonials that influencers do all the time and like unboxing things, like different things like that. So like, when, when we think about the host red Pod podcast ad, do you think that will ever take off as like an open auction ad format or are they just like fundamentally more suited to direct deals? I feel like I talk about, you know, this all the time when I'm talking to like audio focused platforms. The idea of like making those host red ads like dynamic or like programmatic in some way, but like, are they just always just like going to be more fundamentally suited to direct deals, do you think?
- [46:49]
Katie English
Oh, it's such a good question. Because, I mean, today. Yeah, I think that's sort of. It's more of a direct sold format today. And the reason I say that is because I see it with our creator partnerships like those hosts actually really build these very real relationships with the brands that they're endorsing. So it's not just a transaction. It is a very authentic endorsement. And I think the creators who are most successful actually do have that very, like that authenticity. Authenticity really rings true. You feel that in their ad read and in their endorsement. I'll never say never, of course. Right. I think there is sort of, maybe both sort of a go wide and go deep approach for an advertiser where a dynamically placed ad across sort of a very large number of shows is really valuable from an audience reach perspective. And then maybe a very curated host read with one or two shows that sort of really deeply resonate with your brand is a nice complement to that. But yeah, I think the podcast ecosystem in general is a really, really rich environment for advertisers. And those relationships, again, are just, are so, so genuine that they're very impactful.
- [47:52]
Anthony Vargas
And then just as maybe like a last one before we call it here, this is a question that we were asking a bunch of like, contacts on the ground at Possible in Miami. And I really kind of love the question because it really cuts to the heart of like, so much that matters in ad tech and just digital advertising in general. So here's, here's the question. What's a persistent ad industry challenge that, if it were solved, would benefit your business the most?
- [48:17]
Katie English
Ooh, are you giving me a magic wand? This is such a great question.
- [48:20]
Anthony Vargas
It's a magic wand. Question?
- [48:21]
Katie English
Yeah, I think it goes back to sort of, if you think about your question earlier around sort of why is there this opportunity in audio, right, this gap between sort of where the ad dollars are and where consumption is. I think for me it's that measurement story, like helping advertisers kind of create a shared vocabulary for how you think about the value of and impression as opposed to this very bifurcated view of audio here and display here. And in the context of music means one thing and in the context of a podcast means another. If you're really just looking to generate an outcome for your business and that outcome is a function of who you reach, the how becomes a little bit less of the story, right? It's an important component. But really building like a consistent measurement framework and a shared language around the value of your buy I think could be a really impactful unlock for audio as well as just for the sort of multi format story that exists in Spotify. So it's all about proving it, right? Advertisers want proof, you spend money, you want something in return. So let's prove it.
- [49:23]
Anthony Vargas
Yeah, perfectly said. And yeah, it feels like that, you know, that measurement piece is, that's the sticking point for so many people, not only just on the buy side, but also on the publisher and platform side too when it comes to just valuing your inventory and all that stuff. Stuff. So really great stuff there and yeah, really excellent conversation here. Katie. Really loved your insight here. Really appreciate you doing it and I'm sure our listeners got a ton out of it. So thanks again for, for joining at Exchanger Talks and thanks to everybody for listening.
- [49:50]
Katie English
Thank you for having me. It was a pleasure. Foreign
- [50:04]
Samantha Dasher
Today's episode was sponsored by Verve. Find out more@verve.com that's V E R-V E dot com.