How Spotify is Shaping the Future of Brand Engagement

In a landscape dominated by visual-heavy platforms, audio has quietly been redefining the way brands connect with audiences. Spotify, once known simply as a music streaming platform, has evolved into a dynamic, multi-format digital experience—spanning music, podcasts, video, and interactive advertising. At SXSW 2025, Julia Machado, Associate Director of Business Marketing at Spotify, outlined how the platform is reshaping brand engagement and why advertisers need to rethink their approach to audio-first marketing strategies.

Audio’s Untapped Potential: Why Marketers Are Still Playing Catch-Up

While digital advertising spend has continued to shift towards short-form video, influencer marketing, and AI-driven targeting, audio remains significantly underutilized by brands—despite record-breaking listener engagement. Spotify’s own research shows that over 270 million people have now watched a video podcast on the platform, signaling a convergence between audio and visual content that is reshaping how consumers engage with media.

“Ad spend hasn’t yet caught up with consumption,” Machado noted. “Marketers still see Spotify as primarily an audio opportunity, but the reality is that it’s an interactive, personalized entertainment ecosystem. The brands seeing the best results are those that adopt a multi-format approach—leveraging audio, video, and visual elements to engage users across different touchpoints.”

The shift in consumer habits—particularly among Gen Z—is another major force shaping Spotify’s strategy. Research indicates that younger audiences are increasingly seeking escapes from algorithm-driven doomscrolling, prioritizing platforms that offer intentional, mood-driven engagement.

“Gen Z wants to disconnect from the social media overload,” Machado explained. “They’re curating playlists, listening to podcasts for personal growth, and engaging with content that feels more immersive and positive. That mindset makes a difference for advertisers—people are more receptive to brand messages in an environment where they feel in control.”

AI & the Personalization Shift: The Future of Audio Advertising

As brands look to optimize advertising strategies, AI is playing an increasingly central role in content curation, consumer engagement, and ad targeting. Spotify has long experimented with AI-powered recommendations, with innovations such as AI DJ and AI-generated playlists enhancing user experience. However, the next phase of AI in advertising goes beyond personalization—it’s about making ads feel truly native to the platform.

One of the biggest hurdles brands face is meeting the ever-evolving expectations of digital consumers, who now interact with an average of 13 different apps and services daily. This fragmentation means generic ads no longer cut through—consumers expect content that is tailored to the platform and woven seamlessly into their daily experiences.

“People expect relevance,” Machado emphasized. “A successful ad isn’t just personalized—it taps into cultural moments, enhances the user experience, and feels like a natural part of their digital journey.”

Spotify is addressing this challenge by introducing AI-driven ad solutions that help brands seamlessly integrate into the user experience—from dynamic ad insertion in podcasts to custom audience segmentation that ensures messaging aligns with user behavior.

The Power of Podcast Advertising: A New Era for Brands

Podcasting remains one of the most underleveraged tools in brand marketing, despite its high trust factor and engaged listenership. Research suggests that podcast hosts are now more trusted than traditional social media influencers, giving brands a unique opportunity to engage audiences in a way that feels authentic and impactful.

“Podcast ads can be incredibly effective at driving purchase decisions,” Machado noted. “People trust the hosts they listen to regularly, which makes these ad placements more influential than traditional influencer marketing.”

To maximize impact, Spotify is rolling out innovative ad formats that enhance brand integration within podcasts:

• Baked-in ads – Embedded directly into content for a more seamless listening experience.

• Video product placements – Allowing brands to showcase products visually within video podcasts.

• Custom content segments – Where brands collaborate with podcast hosts to create editorial-style ad segments tailored to the show’s audience.

According to Machado, these formats help brands move beyond standard ad placements, allowing them to blend into content in a way that feels organic rather than intrusive.

“We’re seeing brands rethink their approach,” she said. “Rather than just running a 30-second ad, they’re partnering with podcast hosts, integrating into curated content, and aligning with real audience interests.”

Beyond Audio: Immersive Brand Experiences & Cultural Integration

Spotify’s evolution isn’t just about audio—it’s about helping brands create cultural moments. Through its AUX music consultancy, the company matches brands with live events, cultural experiences, and curated playlists—allowing them to tap into the emotional power of music in a way that resonates deeply with audiences.

“We know that Gen Z responds positively to brands that engage in culture—whether that’s through live events, music sponsorships, or interactive digital experiences,” Machado explained. “AUX allows brands to integrate directly into these moments—whether through concert sponsorships, playlist collaborations, or exclusive brand activations.”

For example, Spotify has partnered with major brands at key cultural touchpoints, such as:

✔ RapCaviar Live – A live event series tied to the platform’s top hip-hop playlist.

✔ Country Music Awards Activation – A Spotify House event that brings together top country artists and brand partners.

✔ Restaurant & Music Pairing Experiences – Like the AmEx x Resy partnership, which analyzed users’ music taste to recommend restaurants with matching ambiance.

These initiatives go beyond traditional digital advertising, allowing brands to embed themselves into culture and connect with consumers in ways that feel authentic and immersive.

Looking Ahead: The Future of Audio Advertising

As brands navigate the rapidly changing digital marketing landscape, the shift toward more interactive, multi-format engagement strategies is becoming increasingly clear. Machado believes the brands that embrace audio, AI, and cultural integration will be best positioned for long-term success.

With audio consumption at an all-time high, the advertising industry is at an inflection point. Brands that continue to see Spotify solely as an audio platform risk missing out on its full potential—one that extends into video, AI-driven personalization, and immersive brand experiences.

As consumer habits evolve, Spotify is positioning itself not just as a streaming service, but as a full-fledged advertising ecosystem—one that bridges entertainment, culture, and digital engagement.

Disclaimer: The above podcast episode was generated using AI based on an interview transcript. While the content remains true to the original conversation, the voices, tone, and delivery were synthesized and do not represent actual recordings of the speakers. This AI-generated format is intended to enhance accessibility and provide an alternative way to engage with the discussion.

Stay tuned—this year’s event continues to shape up to be even bigger!

See you tomorrow,
The Unofficially SXSW Team

📢 Unofficially SXSW is an independent publication and is not affiliated with SXSW.

Proudly Sponsored by Fospha: Powering smarter budget decisions with full-funnel marketing measurement and forecasting for the post-iOS 14 era.

[Not affiliated with SXSW Events]

ClickZ is a Contentive publication in the Events division