Hoping to bring its advertising revenue up to speed with its user growth rate, personalized Internet radio service Pandora Media has signed an audio ad sales deal with Katz Media, an Interent radio ad sales specialist owned by Clear Channel.
With the deal, "a significant number" of audio ads on Pandora.com will be sold by Katz 360 Sales, a division of Katz Media. However, Pandora's existing digital sales team will remain intact to sell ads in several metro areas.
Oakland, CA-based Pandora, which reports having 30 million registered users and 11 million monthly unique visitors, began offering audio ads late last year to augment a display ad business. The effort proved worthwhile, resulting in about $18 million in sales, 95 percent of Pandora's total revenue.
Pandora is now a part of the Katz Online Network, an aggregate of many different streaming audio Web sites. Advertisers place orders to run on Pandora and/or the Katz Online Network , said Doug Sterne, director of audio sales for Pandora. The Katz Media Group has 19 regional offices and represents more than 3,000 radio stations and 400 TV stations. The Katz Online Network delivers more than 80 million listener sessions monthly and aggregates more than 8 million streaming audio listeners weekly, according to the company.
Katz, using more than 200 account managers nationwide, will represent Pandora in areas not currently covered by its in-house ad sales team, primarily New York, Los Angeles, San Francisco and Boston. It will also broaden the "array" of Pandora advertisers, Sterne said. Doing business with Pandora will boost the size of the Katz Online Network and give its sales teams the ability to customize, by market, the content selections they can offer their national radio advertisers.
"We've been fortunate to have a lot of people knocking on our door to purchase ads and it's a relief to be able to have people knowledgeable about Pandora to respond," Sterne said. "It's been very difficult to scale up our business." He added that ad dollars "have been migrating from traditional media to online media at an accelerated pace" and it was important to Pandora to join with ad sales people with experience in both online and broadcast.
In May, Pandora.com announced the launch of a program allowing sponsors to fund free streaming of new albums by major recording artists. Water filter maker Brita sponsored the first of those campaigns.
June 5, 2013
1:00pm ET / 10:00am PT