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Pandora plays advertisers a happy tune while monetizing mobile

Pandora Internet Radio, the music-streaming and automated music-recommendation service, is seeking to meet the challenge of monetizing mobile with major media companies and big-name brands while claiming to be a positive influence on advertisers.

As users listen to music on Pandora, they are often viewing graphics, reading lyrics to songs or liking particular songs on each channel. The attention that users give the platform during consumption opens a convenient advertising channel for various brands, from McDonald?s to Sony Pictures to IKEA.

?We work with a wide variety of world-class brands on mobile campaigns including Bacardi, Taco Bell and Toyota, to name a few,? said Lizzie Widhelm, Pandora?s vice president of digital. ?Because of Pandora's deep experience and expertise with mobile, where 80 percent of our listening happens, we constantly collaborate with marketers on both their mobile strategy and actual content. 

?This could mean creating an audio ad for them or building a branded station where the sound of their brand comes to life,? she said.

During the second quarter, Pandora, Oakland, CA, beat its own revenue expectations as it exceeded 5 billion listener hours for the first time, up 29 percent from a year earlier and a 5 percent rise from the first quarter of this year. Mobile revenue surged 59 percent from a year ago to $167.5 million. 

In an interview with Mobile Marketer, Ms. Widhelm, who moderated an Advertising Week panel on "Engagement, the New Currency," discussed what Pandora is doing overall, its advertising and marketing business and how it monetizes mobile with major media companies and big-name brands. 
 
What is Pandora doing to make marketers see an opportunity to reach an audience that increasingly spends time engaging with the platform on mobile devices?
One of the reasons brands continue to be attracted to Pandora is because our native ad, the audio ad, is so effective in the mobile environment. 

McDonald's ad on Pandora

Audio advertising integrates seamlessly in the Pandora experience and can resonate with a consumer whether they are on a run, in their car or have Pandora playing through more than 1,000 CE devices.
 
What is your evaluation of the effectiveness of your core mobile monetization strategies?
We are off to a great start with mobile monetization and I'm bullish on the opportunities ahead. Consumer use is still far outpacing marketing spend when it comes to mobile. 

We expect that more dollars will shift to account for the mobile-minded consumer and, as one of the top four platforms for mobile monetization, there's a lot of growth ahead of us.

What are your views on the value of engagement through content?
Engagement is the new currency for marketers. It's no longer about just earning an impression. The real win for marketers is to truly earn a consumer's attention. 

A big part of accomplishing this will be having content that really resonates with consumers. Pandora's branded stations, which allow brands to customize a station experience based on their target demographic and goals, is a great example of the relationship between content and engagement. 

These stations earn about 25-30 minutes of listening time from Pandora's listener base. 
 
How does your scale, coupled with your products and advertising capabilities, give Pandora an advantage in capturing a share of media buying from advertisers as they shift their spending from traditional forms of media to online and mobile? 
Our scale is a critical advantage. With more than 75 million monthly active listeners, there are few platforms that can offer a comparable audience. 

Bacardi campaign on Pandora.

That said, what we feel really separates us is the engagement of our listeners who continue to listen to Pandora more and more year over year.
 
To what degree do your mobile ad solutions bring targeting, interactivity and measurability?
One of the things that separates Pandora from other platforms is the strength of our targeting capabilities. 

Because we are one of very few players to have a persistently logged-in user base, we are not dependent on cookies and can therefore effectively target across devices. 

Moreover, because our listeners register with their age, gender and zip code, we can offer marketers measurable, reliable results when it comes to their ads reaching their intended audience.
 
Pandora in the past has updated its Android and iOS apps. What other examples are there of how Pandora continues to build out its mobile offerings for consumers?
?We are continually focused on ensuring that Pandora is ubiquitous ? available anytime and anywhere consumers want it. This fueled our being the first-mover for in-car integrations and into more than 1,000 CE devices. The newest integration we have is into Google Glass.
 
How does the consumer?s focus on a mobile device differ from the focus that a consumer typically gives a consumer screen? 
There is no question that consumers have a highly personal relationship with their mobile device. It goes virtually everywhere with people and is the source for much of their content consumption.

I think that creates not only strong response rates for advertisers, but great opportunities for storytelling as advertisers have a chance to reach mobile-minded consumers in different contexts throughout the day.

Final Take
Michael Barris is staff reporter on Mobile Marketer, New York.