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Customized Ad Content Sounds Great

  |  March 29, 2007   |  Comments

A music discovery service allows users to create custom Internet radio stations... and advertisers to create customized campaigns.

We live in the age of customization. Nearly everything online offers the option of being personalized. Internet retailers know what we like, and make recommendations based on preferences. Social networks are built around personal profiles. Sites are all about modifications and adapting to consumer preferences.

This applies to music sites, too. If you're a fan (and who isn't?), you're surely familiar with Pandora. Dubbed a "music discovery" service, the site allows users to create custom Internet radio stations based on their particular tastes. The twist is Pandora helps you expand on those tastes, recommending other music you're likely to enjoy based on the "seed" song or artist you enter into the program.

Pandora's operated by the Music Genome Project. With the help of professional musicians and music specialists, the group analyzes music using over 400 traits per song, including rhythm, harmony, chordal patterning, lyric dominance, and overall genre. The process allows Pandora to propose songs that are incredibly similar to site users' favorites. It's like having an expert in your musical genre of choice at your beck and call.

In the year or so Pandora's been in operation (prior to launching the site, the Music Genome Project white-labeled its service for AOL Music and retail kiosks, such as Best Buy and Tower Records), it's become the third largest Internet radio provider. The site just hit 6 million U.S. registered listeners, receiving over 5 million unique visitors each month. Though you might think it skews particularly young, the majority of Pandora's audience falls squarely into the 18-39 demographic.

"We really believe this is the future of online radio, online radio for the digital age," says Cheryl Lucanegro, VP of advertising sales at Pandora Media. "Music is personal. With Pandora, you not only get to listen, but it's personalized, and something you're actually creating."

Pandora's advertising parallels what's offered to users: it's customized. When advertisers purchase a standard ad unit, either 160 x 600 or 300 x 250, they also get a customized skin for the site page (called a valance), and a text ticker under the user's station tuner. About 60 percent of the site page goes toward the advertiser's product imagery and ad message.

Additionally, advertisers can create unique music stations with corresponding valances that are displayed to users while they listen. For its Absolut Pears product, Absolut Vodka created stations called "Absolut Mood," "Absolut Social," and "Absolut Bling." The latter, featuring music by such artists as Jay-Z, displayed a page valance accented by garish diamond jewelry, an outlandish car, and, of course, the Absolut Pears product.

Advertisers can also match products to stations by musical genre. An auto client might deliver an ad for a truck model to a user listening to country, but a sedan to a listener engrossed in jazz.

Pandora's clever about how it serves ads, too. As it's an online radio site, buyers may be concerned about the passive audience and that their ads might be shown while the user isn't even looking at the screen. To reduce wasted impressions, Pandora's ads (which include pre-roll Flash units within the tuner display) only appear when users interact with the tuner, such as to view upcoming songs or adjust the volume. According to Lucanegro, this happens an average of seven and a half times per hour.

Nearly 80 percent of Pandora's ads are targeted by the age, gender, and geography of registered users or by mood and musical genre, time of day, or day of week (though most impressions are served during the work day). Run-of-site buys are also available.

This unique site's distinctive approach to advertising seems to resonate with its users. "Rather than having the advertising act as a distracting element, it provides artistic variation to the page," wrote one Pandora listener.

As Internet content and services become more customized, it's only logical that advertising follow suit. Pandora's a shining example of how to please both user and media buyer. Doesn't that sound good?

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Tessa Wegert

Tessa Wegert is a business reporter and former media strategist specializing in digital. In addition to writing for ClickZ since 2002, she has contributed to such publications as USA Today, Marketing Magazine, Mashable, and The Globe and Mail. Tessa manages marketing and communications for Enlighten, one of the first full-service digital marketing strategy agencies servicing such brands as Bioré, Food Network, illy, and Hunter Douglas. She has been working in online media since 1999.

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