Can Spotify’s (SPOT) Ad Business Hit the Right Notes in 2025?

2 months ago 25

TipRanks

Sat, Apr 12, 2025, 6:03 AM 2 min read

As Spotify (SPOT) doubles down connected its advertizing ambitions, the streaming elephantine has entered 2025 with a renewed absorption connected monetizing its immense idiosyncratic basal beyond subscriptions. The large question remains: tin Spotify’s advertisement concern yet deed the close notes successful 2025? Here’s what Main Street Data tells america astir Spotify.

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According to Main Street Data, Spotify generated $556 cardinal successful ad-supported gross successful Q4 2024, reflecting a 7.2% year-over-year increase. Meanwhile, gross from its premium conception surged 17% to $3.7 cardinal compared to the aforesaid play past year.

On the idiosyncratic front, ad-supported users grew 12% year-over-year to 425 million, portion premium subscribers roseate 11% to scope 263 million.

Although advertisement gross has traditionally taken a backmost spot to Spotify’s premium subscriptions, caller initiatives similar expanding podcast collaborations and enhancing programmatic capabilities awesome the company’s increasing absorption connected this segment’s potential. Earlier this month, Spotify unveiled respective updates to its advertizing strategy, including the motorboat of Gen AI ads.

One standout announcement was the instauration of the Spotify Ad Exchange (SAX), a caller programmatic level that enables advertisers to people logged-in users done real-time bidding. Additionally, the institution announced caller partnerships for SAX, including Google’s (GOOGL) Display & Video 360, Magnite, and The Trade Desk (TTD).

Meanwhile, SAX volition enactment ads successful audio, video, and show formats crossed music, with podcast inventory to follow. It volition beryllium launched successful cardinal markets, including the U.S., Canada, Europe, Australia, India, and Brazil.

While Spotify’s advertisement propulsion signals semipermanent ambition, analysts are besides weighing successful connected however these moves mightiness interaction the company’s banal trajectory.

According to TipRanks, Wall Street has a Moderate Buy statement standing on SPOT stock, based connected 18 Buys, 10 Holds, and Zero Sell recommendations. The average Spotify banal terms target of $668.13 implies a 21% upside potential.

Year-to-date, SPOT banal has gained 23.6%.