Spotify just floated on the stock market, with a $1 billion public offering. The company has defied the laws of tradition with its initial public offer (IPO) by selling directly to the public, bypassing intermediaries and deals from the banks, a tactic usually reserved for small businesses. This direct listing is risky, and puts a limit on the kind of money Spotify will be able to raise through floating. To date, they're the biggest company to ever go public with a direct listing.
Spotify debuted 28% above its price target of $132 per share to $165.90, getting it off on the right foot. It's never been a profitable business, however it's likely that this floating will see it turn its attention towards ads as its main source of revenue.
That's all well and good, and if nothing else, we've all learnt a little about the US Stock Market from it. But what does this mean for the programmatic industry? Let's talk about inventory.
What does this mean for display?
Spotify has been a key player in programmatic audio from the get go, and 2018 could be the year this offering ramps-up industry-wide. All of Spotify's ad team are trained in the programmatic space, and, typically, much of the premium inventory has been sold direct, but it seems in 2018 the music streaming service is going programmatic first.
We're not just talking about in-stream ads and takeovers, as Spotify is also looking to make waves in the podcast market, meaning there's an inventory opportunity there as well. In similar challenges to live stream inventory, there are some loose ends to tie when it comes to ad insertion in podcasts, but if Spotify has anything to do with it, there could be a whole lot of inventory coming our way.
This is all very speculative. Any proof? All we know right now is that a number of high-profile publishers are pumping money into newly available inventory on Spotify. NBCUniversal, Fox News and ESPN are among the publishers committing to TrustX, a private marketplace and exchange that has been verified by Moat. Speculation it may be, but it certainly looks like Spotify is set to shake up the industry once more. We better watch this space.