Spotify at 20: Why its ads business is ready for the spotlight

This month marks 20 years since Spotify was founded, a milestone that signals a shift. After two decades spent reshaping how people listen to music, the company is now focused on turning that attention into advertising revenue.

It’s hard to overstate Spotify’s impact. The streaming platform has amassed 293 million paid subscribers and 761 million monthly active users (MAUs) as of the end of March, according to the company’s first-quarter earnings results released this week. That’s up from 290 million subscribers and 751 MAUs at the end of December 2025.

Those figures suggest Spotify has already won the battle for audience. The challenge now is monetization. More than 70% of the U.S. population listens to digital audio, according to EMarketer, yet the channel accounts for just over 2% of digital ad spend — a gap Spotify is betting it can close.

Subscriptions still drive the bulk of the company’s revenue. But Spotify is counting on advertising to drive the next phase of its growth, from launching Spotify Ad Exchange to expanding its targeting and measurement capabilities to new sponsorship opportunities.

“Just in terms of sheer consumption, audio is as high as it’s ever been, and I don’t see it declining, especially as eventually more terrestrial radio is turning into digital audio,” said Ross Benes, senior analyst at EMarketer.

“Fundamentally, there is a major investment gap that  we’re seeing when we look at the audio space,” Anne Bouttier, global head of automation sales at Spotify, recently told The Current.

Turning attention into brand moments

Spotify’s strategy starts by turning listening into something brands can participate in, through partnerships and live activations.

During the holiday season, the company launched Spotify Underground presented by Sephora, a Gen Z-focused activation that blended music and beauty culture with performances from Anderson .Paak and Kitty Ca$h alongside beauty stations and glam shots.

It also teamed up with NBC’s Peacock during the 2026 NBA All-Star Weekend through its RapCaviar brand, hosting an event in Los Angeles featuring performances by Don Toliver and Veeze.

“We’ve been thinking through listening behavior on the platform and how we can translate that for the fan, not only in the right digital but also real-life experiences as well,” said Ann Piper, head of North America ad sales at Spotify.

Pivoting to video podcasts

To deepen that engagement, Spotify is also pushing further into video.

The company has built a sturdy video podcast empire, including a partnership with Netflix and new tools that make it easier for creators to monetize video content. Competing more directly with platforms like YouTube, Spotify is aiming to capture more time and attention.

More engagement could mean more ad dollars. Spotify said last year that its video ads capture twice the engagement as social media ads.

Research from Trigon Digital showed that certain podcast genres, like shows about music, were most likely to be watched rather than listened to. It also found that newer podcast consumers are more likely to shop online — a signal that these audiences may be especially valuable to marketers.

“The data supports that there’s a lot of niche audiences out there,” Piper said. “It’s not necessarily about mass reach anymore. It’s about effective reach.”

Thinking of audio as a performance channel

Spotify is also working to prove that audio can function as a performance channel, not just a branding one.

Advances in measurement — including first-party data, media mix modeling and integrations with DSPs — are making it easier for advertisers to understand outcomes, not just impressions.

“We’re also really building the tools to say, ‘Here’s the first-party tools that we have, and then here’s a way for you to partner with the DSP of choice, so you can also build that into your omnichannel,’” Piper said.

That shift mirrors what happened in connected TV, according to Arthur Larrey, CEO of Audion, who echoed this sentiment in a recent op-ed for The Current.

“CTV did not become powerful because audiences suddenly arrived. What changed was the underlying infrastructure,” he wrote. “Programmatic pipes standardized access to inventory. Identity frameworks improved audience targeting,” he said. “Audio now sits at a similar inflection point.”