Pandora to Alter Ad Strategy

Many thousands of viewers enjoy the music selection Pandora has to offer. With randomly assembled playlists and a limitless supply of artists and tracks, the service draws thousands upon thousands of users every day. With that level of exposure, Pandora is one of the premier players in the music streaming industry. Debuting their latest program to bring in additional revenue through ad campaigns, Pandora is looking to tune up their business.

Pandora CEO, Brian McAndrews

Pandora CEO, Brian McAndrews

Using their newly created ad exchange, Pandora is privately auctioning off ad space to companies they have a history of working with. Using a system of over 350 customized targeting matrices, Pandora is able to match a specific ad to the listener most likely to benefit. By doing this, Pandora hopes to eliminate unnecessary ads cluttering the user’s experience, and increase positive response to their clientele’s campaigns.

Choosing only to work with established businesses who’ve worked with them in the past, Pandora hopes to build a more reputable advertising base without allowing third-party programs to muddy the waters. “In order to be able to transact with transparency as well as target first-party data, you have to have a direct relationship with Pandora to buy into the marketplace,” said Jack Krawczyk, VP Product manager at Pandora. By flooding their popular program with unnecessary advertisements, Pandora would not only turn away listeners, but damage a brand that’s been building for the past decade.

Prior to the inclusion of Pandora’s ad exchange program, companies primarily used banner ads to attract attention back to their sites. While this did work in some respect, the numbers were small, and most ads went unnoticed by the majority of mobile users. Pandora believes that this change in direction will increase the level of in-app purchases performed by mobile Pandora users. With a rate of $34.92 in revenue per 1000 mobile listeners to the $58.04 of PC users, Pandora hopes the new approach will help increase the functionality of their mobile advertisements.

Though interruptions are rarely welcome while listening to music, Pandora is doing its best to avoid increasing what few ads are present. Instead, by focusing on more user specific, analytically driven ad placement, Pandora hopes to improve the listening experience for everyone involved.