Pointing to the growth in mobile advertising, Pandora Media Inc. recently reported that ad revenue from mobile represented approximately 55 percent of total advertising revenue in the first quarter of 2012, the highest number for mobile yet from the company.

While Pandora?s growth supports the upward trend in mobile advertising it also underscores the difficulties companies are having monetizing mobile, with Pandora reporting that it monetizes desktop at a significantly higher level than it does mobile use. However, the company said in a conference call with analysts to discuss the first quarter results that it believes mobile monetization has the same long-term potential as desktop.

?That is a significant number,? said Xavier Facon, chief technology officer at Crisp Media, New York. ?It is completely in line with what we would expect from a company like Pandora.

?I put them in the same bucket as the Weather Channel and ESPN,? he said. ?What you have is a company that has a mobile-first mindset.

?If other companies that have a similar opportunity ran their business as well, they would have similar numbers because mobile is more effective.?

Attracting big brands
The strong mobile results were greeted as good news by the financial community, with Pandora?s stock rising the most since its first day of trading in June 2011 following the release of the results.

Pandora revealed a couple of months ago that its monetization via desktop is significantly higher than for mobile. Pandora?s mobile revenue per thousand listener hours, or RPM, reached $20 in 2012, up from $13, while the RPM for desktop is significantly higher at $60-$70.

The reason that the RPM for mobile is so much lower than for desktop is that the mobile advertising market is still in the early stages while Pandora?s mobile use has grown very quickly.

However, Pandora continues to attract big-name advertisers to its mobile platform thanks to a strong sales team and the fact that it creates its own ad inventory.

The list of recent advertisers in mobile includes Tiffany, Boar?s Head, Universal Pictures, JCPenney, Victoria?s Secret and Best Buy.

Relevancy is key
According to the company, its strength in mobile advertising derives from the fact that it offers interactive advertisers a way to reach an audience across a range of connected devices, including desktop, mobile phones and tablets, with tens of millions of users on both desktop and mobile.

Advertisers can also target their messaging by age, gender, geography and music best matches their target customer.

Another advantage is the large amount of visual space available on Pandora for ads since it is a music service that does not provide a lot of written content. Pandora only serves visual ads after users interact with the service, meaning they are focused on the screen, something that happens an average of seven times an hour.

Pandora reported that overall revenue grew 58 percent compared with a year ago for a total of $80.8 million. Ad revenue during the first quarter grew 62 percent for a total of $70.6 million.

The company also said that the percent of listening from mobile is still approximately 70 percent.

?The mobile number [from Pandora] in and of itself is significant because it shows a lot of people are using Pandora on their mobile device,? said Dan Israel, Atlanta-based strategy lead for mobile practice at SapientNitro. ?But I don?t think a lot of people are listening to the ads because they aren?t relevant.

?The ads have to be very relevant,? he said. ?What would make sense is if Pandora delivers an ad to someone who just listened to a Van Halen song, for example, enabling them to buy tickets to the band?s concert in their city.?

?Layering in relevancy and knowing who your customers are is the only way to move the needle when it comes to advertising.?