Spotify partners with The Trade Desk to test its own ad exchange

Audio streaming platform Spotify has partnered with The Trade Desk, an omnichannel advertising platform, to work on launching its own ad exchange—or supply-side platform (SSP). 

Spotify Ad Exchange (SAX) is currently in a piloting phase, aiming to scale automated ad offerings with an initial focus on video. The new platform hopes to capture more ad revenue from small and medium-sized businesses (SMBs) and help larger brands spend more efficiently. 

The Trade Desk is Spotify’s first demand-side platform (DSP) partner and the initial focus will be to connect the ad tech company’s North American clients with Spotify’s video ad inventory, with audio ads to follow. 

As part of the partnership, Spotify will use The Trade Desk’s OpenPath technology to connect ad inventory to advertisers more quickly and will also join Universal ID 2.0 (UID 2.0), a cookie-less, privacy-safe ad-targeting framework.

In the future, Spotify hopes to broker more deals with adtech firms and DSPs to expand its automated ad offerings. By launching its own ad exchange, this places Spotify in a position to compete with other major tech platforms like Meta and Google. 

A spokesperson from The Trade Desk told Axios: “Digital audio, in particular, is fast emerging as an essential digital advertising channel for our clients looking to reach consumers in a logged-in, authenticated environment.

“We are excited to extend our partnership with Spotify on this pilot to help advertisers have direct access to high-quality inventory with as much signal and transparency as possible.”

A spokesperson from Spotify said: “We routinely conduct pilots before launching products for our users, creators and advertisers. We're excited for the important learnings to come from the initial period with The Trade Desk, but have no further news to share at this time.” 

This story first appeared on Campaign's sister publication Performance Marketing World.