Spotify has unveiled a range of updates to its advertising business, including the introduction of Gen AI ads, at an event held in New York City. A key highlight of the announcement is the launch of the Spotify Ad Exchange (SAX), a new programmatic offering that enables advertisers to connect with logged-in users through real-time auctions.

Regarding SAX, Spotify has announced partnerships with several prominent demand-side platforms, including Google’s Display & Video, Magnite, Yahoo DSP, Adform, and others, with The Trade Desk also being supported. Additionally, more partnerships are expected to be announced soon. The SAX platform will provide full addressability and measurement capabilities, according to the company.

Initially, partner advertisers will be able to reach users across Spotify’s audio, video, and display formats within the music category, with support for podcasts forthcoming. The SAX platform will be available in multiple regions, including the U.S., Canada, Europe, Australia, New Zealand, India, Singapore, Brazil, and Mexico.

In a significant development, Spotify is integrating AI into its advertising offerings, allowing marketers to leverage Gen AI to generate scripts and voiceovers for their audio ads directly within the Spotify Ads Manager in the U.S. and Canada.

Notably, Spotify has stated that the use of its AI tools will not incur any additional costs for advertisers.

These updates were presented to marketers as a means to effectively target the highly sought-after Gen Z demographic, who utilize the streaming service throughout their daily routines, often beyond moments of direct engagement with the app. Spotify highlighted that it now boasts over 251 million Gen Z users on its platform.