Spotify’s New In-House Agency To Incorporate Generative AI Tools

As Spotify still significantly trails behind other digital platforms from Alphabet and Meta in ad revenue, it is introducing Creative Lab – its first in-house creative agency designed to assist brands in crafting customized marketing campaigns.

This new venture, led by former Vice President of Digital Creative Kay Hsu, aims to leverage Spotify’s listener base of 615 million, by offering tailored advertising solutions including video and audio ads, in-app digital experiences, and call-to-action cards.

Although advertising is a smaller portion of Spotify’s revenue – comprising 11% compared to 89% from its subscription services – the ad-supported segment saw an 18% increase year-over-year, fueled by higher pricing and growth in podcast advertising.

Some brands have already tapped into Creative Lab. Rockstar Energy Drink utilized the service for its “Press Play” livestream concert series, featuring artists like British rapper Stormzy. Aperol is another brand that has partnered with Creative Lab to leverage Spotify’s advertising programs.

Spotify Global Head of Sales Brian Berner also mentioned that Spotify is exploring a generative AI ad tool that will enable brands to generate scripts and voiceovers. This feature is expected to be integrated into Spotify Ads Managers, but is still in the testing phase, with no set timeline for its launch.

This is not Spotify’s first foray into AI additions in podcasts. In September, Spotify announced it is testing a new feature that uses artificial intelligence to translate its original podcasts into other languages while preserving the original speaker’s voice, powered by OpenAI’s Whisper.