Digital music service Pandora was born on the Web, but one thing the firm hopes will boost ad sales is the addition of two sales executives from the traditional radio world. They’ve been brought on to help pitch Pandora’s new audio ads.
Online radio advertising, be it in the form of in-stream audio or display ads alongside a player, has yet to really take off. Though there are several reasons for the failure to gain critical mass, one might be who is doing the ad selling.
“They were selling Internet and terrestrial [radio] at the same time,” said Pandora VP of Advertising Sales Cheryl Lucanegro of the new hires. “They understood radio with the accountability of the Web.” According to Lucanegro, the company recently hired New York sales reps Doug Sterne, director of audio sales, and Donna Bourke, eastern sales manager for audio. Both hail from big name radio companies: Sterne from Clear Channel and Bourke from Emmis Communications, according to Lucanegro.
“Their job is to really talk to the radio buyers and provide a new way to use radio,” she continued, noting the firm has 16 salespeople on staff. The entire sales team can sell audio ads, she said.
Following on-and-off trials, Pandora is officially offering advertisers audio ads. Fox is one ad client taking advantage of the format, which is coupled with a small graphical image within the Pandora Web interface. After listening for 30 minutes to one hour, some users fitting certain advertiser criteria will hear a 7 to 15 second ad for Fox’s “American Idol.”
“They’re not your typical radio ads,” said Lucanegro. “It allows you to reinforce your graphical ads with audio.” In addition to targeting based on users’ musical choices, the firm targets ads based on information provided in user registrations — mainly Zip code, age, and gender.
Pandora doesn’t have the best track record in the audio ad department, at least when it comes to pleasing users accustomed to a listening experience free of audio advertising. In January 2007 after the site’s initial audio ad test for McDonald’s, the company noted on its blog, “We’ve taken down the McDonalds ad and we’re still digesting our listener’s feedback. It’s likely the case that we’ll run other tests before we can conclusively close the books on the question of audio ads on Pandora.”
Several listeners complained about the ads. Still, like many online music outfits, Pandora appears to be in survival mode, and appears to be in need of more revenue, particularly amid the looming threat of increased online radio royalty fees. Pandora Founder and Chief Strategy Officer Tim Westergren has led the company’s charge against higher fees.
The company experimented with audio spots again late last year. “We’ve always been doing testing,” added Lucanegro. Users can opt to pay $36 for an annual subscription to the service without image or audio advertising, in addition to other premium features.
It remains to be seen how the company’s listeners will respond to the audio ads this time around. But it’s clear the company must widen its ad offerings in order to appeal to advertisers, particularly when it comes to use of the service via digital devices. “In those cases there aren’t a lot of visual opportunities,” Lucanegro explained.
Puma and Nike have advertised in Pandora’s mobile platform. The service is available through Apple iPhone, Sprint, and AT&T, as well as through home music devices.
In an effort to get its Web users to pay attention, the firm offers advertisers highly customized sponsorships that are a far cry from standard display units. For example, the site currently features an “Energizer Forum” sponsored by the battery maker. In the special site section, users can discuss topics such as, “How has technology changed your music listening experience?” and view posts from musical artists. Also, just before the 2008 presidential election, Pandora users in battleground states were greeted with a Barack Obama-themed interface.
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