I've been using +Spotify
since the early days, and I remember that their pitch back then was that it would have less advertising than commercial radio. Not so any more: my last half hour of listening is quite literally: ad, ad, track, track, ad, track, ad, ad, track, ad, track.
Of course, it's a free market and I don't have to use their service. I'd happily pay for a premium account, but with so little of the fee going to the artists (pennies per month, at the rates I listen) I feel it's fairer for me to spend the money purchasing music instead.
I suspect some of the problem is that they don't have the right level of advertising inventory. Playing the exact same ad four or five times to the same person in quick succession can't be worth much, so either the advertiser is getting hosed or (more likely) Spotify is making less than it potentially could be. More inventory would also enable better targeting, which could increase the value.