Spotify’s decision to build a programmatic tech stack is the reason advertisers aren’t flocking to the platform, according to the company’s chief financial officer.
Christian Luiga addressed Spotify’s disappointing advertising growth during the company’s Q4 earnings call on 4 February.
Moving into programmatic ‘takes time’, said Luiga. He added that Spotify was ‘on the ball now’, and that 2025 will be the year it builds its offering, and 2026 will be when it achieves scale.
Despite a challenging brand environment for the platform, monthly active users have grown 12% YoY, to 675 million. Ad-supported revenue grew 7%, year-on-year, rising to €501m, with automated sales channels the largest contributors to Spotify’s overall advertising growth.
Spotify’s exec team seemed keen to talk about video podcasts during the call. ‘We made some exciting updates this quarter, including launching our new video proposition at scale’, said chief product and technology officer, Gustav Soderstrom. The company has seen spikes in popularity for video podcasts, and now has more than 333,000 globally, with over 270 million users having streamed one.
At a creator event in Los Angeles in November, the company announced it was giving premium users the ability to watch their favourite podcasts uninterrupted by dynamic ads — as well as introducing new tools to help video creators turn their shows into sustainable businesses. ‘We’re incredibly pleased with these early results and we will continue to innovate from here’, said Soderstrom.
The company has also evolved Spotify for Podcasters into Spotify for Creators, and introduced the Spotify Partner Program, to create monetisation opportunities for creators. ‘We’ve seen tremendous results and a very big uptake on video podcasters coming to the platform overall, and now more of them are obviously adopting our partner program as well’, said CEO, Daniel Ek.
These moves may suggest Spotify plans to compete with YouTube and TikTok going forward, and sees less growth opportunities in music, and more in video.
Featured image: Heidi Fin / Unsplash
