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 is testing a new supply-side platform called Spotify Ad Exchange (SAX), aimed at enhancing its automated advertising services. According to Axios, the platform will allow Spotify to improve ad spending efficiency for larger brands and increase revenue from small- and medium-sized businesses.

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.

Spotify (NYSE:SPOT) is reportedly piloting an ad exchange, or a supply-side platform (SSP), along with The Trade Desk (NASDAQ:TTD) to help scale its automated ad offerings, with its initial focus on video,