Pandora Courts Local Advertisers by Reaching a Narrow Audience – NYTimes.com
The music was pumping and the finger food laid out in abundance one recent evening in a subterranean Manhattan bar, as executives of Pandora Media, the Internet radio service, mingled with some of their most prized new advertisers.
Most of the clients, however, were not representing big corporate accounts or multimillion-dollar national campaigns, but rather local businesses whose budget might top off at $20,000 a month. Yet they are the focus of one of Pandora’s most important new corporate strategies as it competes with terrestrial broadcasters for a chunk of radio’s $17 billion ad market.
Pandora’s pitch to advertisers is that its technology can cater to consumers with far greater precision than radio — it can pinpoint listeners by age and sex, ZIP code or even musical taste — and that as it grows, Pandora will effectively be the top station in many cities.
“A dollar spent on Pandora is better than a dollar spent on terrestrial radio,” said Tim Westergren, the company’s founder and chief strategy officer, nearly shouting at a corner table to be heard above the din of his party.
Competing head-to-head with terrestrial radio’s armies of local sales staff members will not be easy. But for Pandora, increasing ad revenue is essential.
The service went online in 2005, streaming free music tailored to listeners’ tastes, and its growth has been explosive. In the last two years, it has gone from 45 million to 125 million registered users, and its revenue has increased from $55 million to $274 million, the vast majority of it from advertising it also sells ad-free access for $36 a year. In March, Pandora streamed a billion hours of music.
Strange Random Music Business Quote:
“Don’t try to explain it, just sell it.”- Colonel Tom Parker
- Pandora Stacks ‘Em Deep And Sells ‘Em Cheap By Appealing To Local Advertisers (adpulp.com)
- Local Car Dealer Happy With Pandora (audio4cast.com)
- Pandora: Stifel Ups Rating To Buy; Sets $18 Price Target (forbes.com)
- Pandora’s Tim Westergren Wants to Make Musicians Respectable (entrepreneur.com)
- Why Pandora Will Never Be Great Again (dailyfinance.com)
- Pandora says UK Streaming Rates Still too High (itproportal.com)
- Pandora woos advertisers with monthly stats, as it hits 49 million active listeners (thenextweb.com)
- Westergren keeps promise: Pandora profitable (news.cnet.com)
- Pandora in Your Car: What it Means For Bands (And Radio in General) (quickgamer88.com)
Posted on April 16, 2012, in Article and tagged Advertising, Colonel Tom Parker, Internet radio, Manhattan, Pandora, Pandora Media, Pandora Radio, Radio, Tim Westergren. Bookmark the permalink. Leave a comment.