Spotify is piloting an ad exchange, or a supply-side platform (SSP), to help scale its automated ad offerings, three sources familiar with the effort told Axios. The focus will be on video to start.

Why it matters: In building its own exchange, Spotify can capture more ad revenue from small- and medium-sized businesses and make it easier for existing clients, including big brands, to spend more efficiently with the platform.

Those improvements will help the Swedish audio giant compete against bigger platforms like Meta and Google for ad dollars.

Zoom in: The new exchange, internally called Spotify Ad...