Spotify Made Biddable a Third of Ad Revenue. Podcast Buyers Still Need an IO.

Spotify reported Q1 2026 results showing 761 million monthly active users and biddable programmatic ads now top one-third of ad-supported revenue. The mix is uneven: music drove the biddable growth through higher impressions sold, while podcast revenue still came from sponsorships in Spotify's Owned and Licensed shows. Self-serve buyers get the music inventory. Podcast advertisers still need a direct line to the Spotify sales team.

The headline number from yesterday's Q1 2026 earnings looks clean. Total revenue €4.533 billion, MAUs up 12% year-over-year, and Co-CEO Alex Norström telling investors the 18-month rebuild of the ad stack is "done. So now it's about execution." For paid media buyers, the more useful detail sits one paragraph deeper in the shareholder deck. Read that, and the picture changes.

What "more than one-third" actually covers

Spotify's prepared remarks describe biddable programmatic as accounting for over a third of ad-supported revenue and growing fast. But the same deck splits the segment in a way that matters for anyone planning Q2 spend: music advertising grew on impressions sold (with soft pricing), and podcast advertising grew on sponsorships within the Owned and Licensed portfolio.

That distinction is the entire story. "Higher impressions sold, partially offset by softness in pricing" is what a biddable transition looks like in a P&L. "Sponsorship gains within Owned and Licensed" is what an old-fashioned IO sales motion looks like. They sit in the same revenue line. They are not interchangeable. According to the breakdown reported by PPC Land, automated channels were the largest contributors to overall ad growth in the quarter, ad-supported revenue landed at €385 million (down 5% reported, up roughly 3% on a constant-currency basis), and ad-supported MAUs grew 14% to 483 million.

222% advertiser growth, distributed unevenly

The other number worth pulling out is from eMarketer's coverage: monthly active advertisers using Spotify Ad Exchange (SAX) are up 222% since the exchange launched in April 2025. That is a real adoption curve, not a vanity metric. SAX is now plugged into roughly 50 DSPs, including Google's DV360, The Trade Desk, Magnite, Yahoo DSP, Adform, and Amazon DSP. Identity matching runs through UID 2.0 on Trade Desk, PAIR on DV360, and RampID on LiveRamp.

Spotify also published Trade Desk-side performance numbers for campaigns that included Spotify inventory: 8.7% lower cost per household and 44% lower cost per action versus comparable campaigns without it. Those numbers come from Spotify and The Trade Desk, so apply the usual hedge. From what I've seen, lifts in that 30-50% range tend to compress once you scale and the pricing softness goes away.

The 222% figure is overwhelmingly a music-side story, because that is where the inventory has been opening up. The advertisers showing up on SAX are mostly running 30-second audio ads against music streaming. They are not running programmatic podcast ads at meaningful scale, because that inventory is not really there.

Soft music pricing is what a biddable transition looks like

The "softness in pricing" line in Spotify's deck is doing more work than it might seem. When a publisher moves from direct-sold to biddable, the first quarter or two of self-serve activity tends to clear at lower CPMs. Buyers find the inventory through their DSPs and bid against each other, but the floor is set by the auction, not the rate card. Direct-sold IO rates were holding the line. Auction rates are not.

This is the exact dynamic Digiday flagged earlier this year when it reported buyers were getting more out of SAX but still wanted more in terms of identity, formats, and measurement. They were not complaining about price. The price was the part working in their favor. What they wanted was creative variety and matching depth that lived up to "logged-in audience" pitch.

If you have been running Spotify on IO and your CPMs feel high relative to other audio, this is the window where the biddable side of the same publisher is likely to be cheaper than the direct rate. That window probably closes in two to three quarters, once the 222% advertiser cohort builds enough density to push prices back up.

Podcast inventory is still bottlenecked at the sales desk

Podcast advertising on Spotify is a different product, and the Q1 numbers make that clear. The growth came from sponsorships within Owned and Licensed shows, which is an account-team motion. SAX has podcast inventory, but the share of podcast revenue moving through it is small. The shows with real audience scale, the original ones Spotify owns, are largely sold by humans on insertion orders.

If you are reading "biddable is one-third of revenue" as "podcast inventory is now self-serve at scale," that is not the read the deck supports. It is closer to: music is going programmatic, podcast is still relationship-driven, and the line item Spotify reports as "ad-supported" is a blended view of two very different sales models. Worth keeping that in mind when sales reps from competing audio networks pitch you "we do programmatic too" this month.

Where the 50-DSP story breaks down

Fifty DSPs sounds like distribution. In practice, the depth of the integration matters more than the count. UID 2.0 and PAIR work well for advertisers already running on Trade Desk or DV360 with first-party data. They work less well for buyers without that signal infrastructure, which is most mid-market advertisers. PMP deals are still the more reliable route for non-enterprise buyers who want guaranteed delivery and pre-negotiated pricing.

This is the same pattern playing out across CTV and audio: the open-auction side gets the headlines, but most spend at scale routes through PMPs, programmatic guarantees, and direct deals. We covered the same dynamic in Meta's CTV plan routing through Magnite and FreeWheel earlier this month. Spotify is not unusual. It just narrates the open-auction milestones because they make better quarterly slides.

How to test this quarter without burning your podcast budget

Concrete plan for a paid media team that has Spotify on the radar but has been buying it through IO:

• Music inventory: shift 10-20% of your Spotify music budget through SAX via your DSP this quarter. If you are on Trade Desk, layer UID 2.0. If you are on DV360, use PAIR. Benchmark CPM and CPA against your existing direct rate. Run it for at least four weeks; auction-side delivery patterns take a couple of weeks to stabilize.
• Podcast inventory: hold steady on direct sponsorships in Spotify's Owned and Licensed network. The biddable path for podcasts is still thin. Do not move that spend yet.
• Identity: if you do not already have UID 2.0 or PAIR set up, this quarter is the right time to pay that one-time integration cost. Spotify is not the only inventory source where it pays off, but it is one of the cleaner test cases.
• Reporting: ask your rep for a clean split between music and podcast in the post-campaign report. If they cannot produce one, treat the blended number as suspect.

The realistic upside is a meaningful CPM saving on the music side over the next two to three quarters, before the auction tightens up. The realistic downside is creative volume: programmatic audio still runs on a fairly narrow set of 15- and 30-second formats, and Spotify's recent Peloton-bundling push suggests the platform is more focused on premium engagement than expanding ad creative formats. Plan accordingly.

The thing to watch in Q2 is whether biddable's share of revenue keeps climbing past 40%, and whether any of that climb starts coming from podcasts. If both happen, podcast IO sellers will need a new pitch. If only the first happens, podcast advertising stays a relationship business for at least another year. From what's in this earnings deck, the second case looks more likely.

By Notice Me Senpai Editorial