Spotify’s global ad revenue expected to reach $2.1 billion in 2024: WARC

Audio giant Spotify is expected to grow its global advertising revenue to $2.1bn in 2024, up by 13% year-on-year, according to new data from WARC. 

According to the report, Spotify has seen double-digit growth in its ads business for six consecutive quarters and is expected to $2.6bn in global ad revenue by 2026. 

Although Spotify is mostly known as an audio streaming platform, it plans to expand beyond that as it continues to invest in video content – highlighting a 44% year-on-year increase in video streams over the past 18 months, particularly across video podcasts. 

The company plans to continue expanding into video advertising as campaigns that combine both video and audio formats have proven to boost sales by 66% and purchase intent by 27% which outperforms audio-only campaigns. 

Additionally, the company plans to continue investing in AI offerings to enhance user engagement having seen success with features like the AI DJ. Spotify is also looking at boosting its advertising revenue through generative AI (gen AI) tools such as Quick Audio.

The feature, which allows brands to create voiceovers and scripts using gen AI, is currently being developed and will be launched in Spotify Ads Managers. The announcement for Quick Audio came out in June this year, at the same time that the company announced the launch of its first in-house creative agency, Creative Lab. 

Creative Lab aims to help brands develop custom marketing campaigns including video and audio ads as well as in-app digital experiences and interactive formals like call-to-action cards by working closely with them to meet their desired targets. 

Other key areas that Spotify is looking at enhancing, according to the report, include strengthening its social features by allowing comments on podcasts to strengthen connections between fans and artists as well as enabling users to share their listening habits with followers. 

According to WARC, Spotify currently has over 600 million users globally with significant growth in the Middle East, Africa, and Asia. The platform is also particularly favoured by brands that are seeking to target younger audiences as Gen Z users are highly engaged especially with video podcasts. 

Recently, PMW interviewed Ed Couchman – Spotify’s Head of Sales for the UK and Northern Europe – on how audio fits in as a performance marketing channel and how brands can connect with the millions of Brits that are listening to music and podcasts everyday. 

This story was first published in Campaign's sister publication Performance Marketing World