Advertising Is Now Spotify’s ‘Achilles’ Heel,’ a Business Insider Takedown Claims – Ad Agencies Waiting Days to Get a Reply After Spotify’s Heavy Layoffs

Spotify is ‘floundering’ on the advertising front, according to a new report. Photo Credit: Rubaitul Azad

Advertising has become Spotify’s “Achilles’ heel” – at least according to a new report exploring the company’s comparatively little-discussed reputation in the advert sector itself.

That report, complete with comments from advertising higher-ups, comes from Business Insider. Keeping the focus on the music world for a moment, Spotify’s advertising-growth woes aren’t exactly a secret. Paid listening has always been significantly more lucrative, and 15 months have passed since a major label head opted to float the idea of charging ad-supported users.

Nevertheless, the company’s Q2 2025 advertising revenue – down 1% YoY to $525.6 million/€453 million – was particularly underwhelming for a few reasons. Most immediately, the slip arrived despite Spotify’s addition of 10 million ad-supported users just on a quarterly basis, for a second-quarter average of 433 million.

Meanwhile, the platform has been leaning heavily into video, and in theory, the expansion, fueling hefty payouts to podcasters under a revamped partner program, should drive ads growth. Plus, June 2024 delivered the rollout of an in-house Creative Lab, and an AI-minded Spotify launched a new ad exchange and more in April 2025.

Regarding Spotify’s response to the lackluster advertising showing, global advertising head Lee Brown has exited and joined DoorDash; head of advertising sales for the U.K. and Northern Europe Ed Couchman, on the other hand, has departed Spotify for Netflix.

Time will reveal their replacements – and Spotify’s subsequent advertising results. Closer to the present, however, how do ad agencies view the streaming giant?

Not too favorably, according to the mentioned Business Insider report, which pointed first to buyers’ qualms with Spotify’s customer service. Of course, the profitability-minded company has been on a (relative) cost-cutting tear – with CEO Daniel Ek having acknowledged the involved layoffs as more operationally disruptive than anticipated.

Per Daniel Granger, the founder and head of audio-focused ad agency Oxford Road, Spotify customer service follow-ups can now take days to materialize as opposed to hours with different platforms.

Spotify, for its part, pushed back against the claim by placing its response time at around three to six hours – with an objective of resolving any issues within 48 hours. Admittedly, some of the piece’s other described complaints, one pertaining to Spotify’s move away from ultra-expensive podcast exclusives, aren’t exactly universal.

But a podcast publisher’s criticism of the alleged $8 to $9 price point for 1,000 digital ad impressions on Spotify (via Megaphone) is noteworthy. The platform in more words argued that the actual number far exceeds $9, with moving parts including “seasonal shifts” factoring into the rate.

Wrapping with an advertising-adverse subject not covered in the article: The continued presence of adult (or at least borderline, and in some cases illegal) “podcasts” on Spotify.

Link to the source article – https://www.digitalmusicnews.com/2025/08/21/spotify-advertising-criticism/