In the midst of its IPO last week, streaming music service Pandora was criticized for an alleged inability to attract ad dollars from non-web-startup advertisers. However, observation of Pandora both online and via mobile in recent days revealed that the firm is indeed running display, video, and audio ads from a variety of well-established brands including retailers, insurance providers, and travel advertisers.
As has been at the heart of the criticism, Living Social ads do show up in Pandora in the mobile environment. However, when ClickZ News used the Pandora iPhone app on June 16 and 17 while in our New York City office, display, audio, and video ads from a variety of brands were served, including ads from Lowe's, PetSmart, Taco Bell, Verizon, Farmers Insurance, and TNT's new show, "Hawthorne."
Ads from other digital media brands appeared in the mobile app, too, including Google Offers, Bing and eBay.
According to Pandora's prospectus issued by the Securities and Exchange Commission June 10, the firm brought in $119.3 million in the fiscal year ended January 31, 2011, more than double the $50.1 million in ad revenue collected in the same period of 2009. Pandora sells audio, display, and video ads to national and local advertisers.
Online, the company drew some different yet equally diverse advertisers appearing in display and audio units - usually served in conjunction: Best Buy, Weight Watchers, Norton Security, Kissimmee Convention and Visitors Bureau, Spring Hill Suites, Bank of America, Sesame Place, Honda, TNT's "Men of a Certain Age," Google Chrome, and printing service VistaPrint.
Ad revenue makes up 90 percent of Pandora's business, and the remaining 10 percent comes from premium subscription fees. Pandora subscribers experience the service without ad interruptions, which appear on the free service after approximately every fourth song.
Despite the diversity of advertisers on Pandora, investor concerns about the company ability to profit are bound to remain.
|Ads on Pandora's iPhone App|
|Living Social||Video and Display|
|Lowe's||Display and Audio|
|Bing||Video and Display|
|Taco Bell||Audio and Display|
|TNT/Hawthorne||Audio and Display|
|Farmers Insurance||Audio and Display|
|Ads on Pandora.com|
|Best Buy||Display and Audio|
|Kissimmee Convention and Visitors Bureau||Display and Audio|
|TNT/Men of a Certain Age||Display and Audio|
|Norton Security||Display and Audio|
|Spring Hill Suites||Display and Audio|
|Bank of America||Display|
|Sesame Place||Display and Audio|
Zach Rodgers contributed to this story.
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Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.
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