Pandora Radio Advertising in the Spotlight

The media landscape is continually evolving and since the year 2000, when Pandora stepped onto the scene, the industry competition continues. Pandora’s mission statement is “to enrich people’s lives by enabling them to enjoy music they know, and discover music they’ll love. Anytime. Anywhere.”

Pandora means “all gifted” in Greek, and according to Greek mythology Pandora received many gifts from the Gods including the gift of music from Apollo. With more than 250 million registered users, many likely consider the free and customizable music of Pandora to be nothing short of a gift.

Free streaming music has become so commonplace that it seems hard to think back to the days when free music was a major social controversy (remember the Napster lawsuit?). But Pandora is a different animal – a venue where individual preferences are captured to build unique personal libraries that offer everything from Beethoven to Billy Joel to Beyoncé. Pandora is legally permitted to provide service through royalties paid to artists, and it’s the advertising dollar that gives Pandora the funding to pay for these rights.

It’s not difficult to see why Pandora has become so popular. With the launch of their Thumbprint Radio, users are able to listen to the songs they have given a “thumbs up” throughout their time on Pandora. In order to assure you haven’t missed anything, Thumbprint Radio also guides users though music based on the genre they continuously like. 

Traditional or “terrestrial” broadcast stations decide what you will hear based on their format and music playlist, but Pandora allows the listener to literally build their own format and playlist based on their mood. With the boom in internet radio, traditional radio stations are doing what they can to keep up with the “streaming” tide. Terrestrial radio is broadcast through wireless transmission of signals, but many of these traditional stations are now streaming their stations online rather than strictly through the air waves. This gives people the ability to listen to their favorite radio station via the internet, whether it’s through a computer, tablet or smart phone.

In the advertising world, there is still a core difference between terrestrial radio, and Pandora and its counterparts. For obvious reasons, internet radio has a generally younger audience of core listeners, hitting primarily adults 18-34 and 18-49, while older demographics are sticking to radio as we knew it.

Why is this important to the advertising industry? Local audience measurement is now available in the top 100 radio markets allowing media buyers to use traditional buying platforms for side-by-side comparisons of Pandora vs. terrestrial radio stations. When looking for overall reach and frequency of a given campaign, this can be a very useful reporting tool.

However, the question remains: is Pandora really a competitor of traditional radio advertising dollars, or is it a more appropriate to consider Pandora as a source for advertising in the digital realm? A Pandora purchase comes with companion banners on mobile, tablets and computers, but terrestrial radio stations are also following this trend, offering digital banners as added value on buys. Either way, Pandora has proven itself to be a worthy player in the ad game and true competitor for advertising budgets. We’ll be keeping a close eye on the trend as the industry continues to evolve…stay tuned!

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