With more than 200 million registered users, Pandora’s collection of user data is substantial. Now they are beginning to use that data to create marketable audience segments that advertisers can use to target their campaigns.
The first of these “proprietary audience segments” created by Pandora are Hispanic and Spanish speaking users of the service. To create these segments, Pandora cross referenced their registered users with zip codes that have a high population of Hispanic and Spanish speaking listeners, using publicly available census data. It’s still inference based targeting, meaning that the buyer has to agree to make assumptions about the consumer based on where they live, but it’s an improvement over cookie-based technology, which makes inference based assumptions as well – usually assuming that someone visiting a certain site matches a certain set of established criteria.
Critics will argue that users often give false registration data as well, and that is certainly a factor, but probably not a significant deterrent for buyers who are looking for any improved ways of reaching more of the people they want to reach, fewer of those they don’t.
Studies have shown that listeners are quite tolerant of targeted ads online, especially when they are targeted to offer products that the listener might find useful.
In fact, Pandora’s capable of slicing up their audience by market, zip code, age or gender, or the kind of music they listen to, and has been doing that for a long time. These new customer segments are available in media buying software that makes it very simple for agencies to identify, price and purchase. It’s a smart way to market their large audience to advertisers and showcase their targeting capabilities. This video features Heidi Browning, Pandora SVP of strategic solutions, discussing the streaming service’s targeting capabilities.
There is a debate raging about the validity of Pandora’s audience stats that has begun to seem like a pretty coordinated effort on the behalf of some large broadcasters. It seems to have begun on stage at RAIN Summit Orlando during David Field’s keynote
when he said Pandora’s claim to have 7% of all radio listening was false. Soon after, Bob Pittman said the same during a speech he made, and most recently Rich Bressler from Clear Channel said the same thing on a financial call. in response to more recent announcements from Pandora that their share is now up to 8%.
I’m questioning the wisdom of spending so much time discussing the competition. The thing that I find most ironic about all of this is that they are using public forums to disparage Pandora By comparing the total of ALL LISTENING TO AM/FM RADIO to Pandora. Which only lends credibility to Pandora! Whether their share of all listening is 4% or 7%, it’s a big number compared to the entire AM/FM listening universe. I cringe every time I hear someone make the comparison, it’s such an ill informed strategy. I’ll bet the folks at Pandora are delighted. In fact they just released a new report and said their share is now 8%! That rose from 7% so quickly that I wondered if Pandora is actually baiting broadcasters to gain more publicity.
The reality is that Pandora wanted to be measured by Arbitron all along, and it was some big broadcasters that pushed Arbitron hard against doing that.
Of course, a better strategy for broadcasters is to build out their own platforms, creating innovative ways to distribute their content and forge lasting relationships with their listeners, and then spend time talking about those platforms rather than contributing buzz factor to Pandora. That’s the stuff that advertisers want to hear and the market wants to invest in.
As I have mentioned before, there is a debate raging about the validity of Pandora’s audience stats that has begun to seem like a pretty coordinated effort on the behalf of some large broadcasters. It seems to have begun on stage at RAIN Summit Orlando during David Field’s keynote, when he said Pandora’s claim to have 7% of all radio listening was false. Soon after, Bob Pittman said the same during a speech he made, and most recently another guy from Clear Channel said the same thing in response to more recent announcements from Pandora that their share is now up to 8%.
The thing that I find most ironic about all of this is that these radio broadcasters are using public forums to disparage Pandora By comparing ALL LISTENING TO AM/FM RADIO to Pandora. Which only lends credibility to Pandora! Whether their share of all listening is 4% or 7%, it’s a big number compared to the entire AM/FM listening universe. I cringe every time I hear someone make the comparison, it’s such an ill informed strategy. I’ll bet the folks at Pandora are delighted, in fact they newly announced 8% rose from 7% so quickly that I wondered if Pandora is actually baiting broadcasters to gain more publicity.
The reality is that Pandora wanted to be measured by Arbitron all along, and it was some big broadcasters that insisted that Arbitron create reasons why that couldn’t happen. As far as the advertising community is concerned, the proof is in the pudding, and streaming stations can of course verify delivery of impressions.
Of course, a better strategy for broadcasters is to build out their own platforms, creating innovative ways to distribute their content and forge lasting relationships with their listeners. That’s the stuff that advertisers want to invest in.
Speaking of seismic shifts, YouTube held it’s own music awards on Sunday, and if buzz factor is any measure of success (it is, of course), then it was a big one. Lots of people were talking about the awards, Produced by Spike Jonze, the awards were designed to be edgy, spontaneous, even strange – and definitely the opposite of the highly staged awards shows that we see on television.
By all accounts, it was a celebration of “the democratizing nature of YouTube”, with artists like Mackelmore & Ryan Lewis who became famous as a result of their hit song video on YouTube that they made for $5000 bucks with some friends. Even big record label made artist Taylor Swift got an award for her song “I knew your were trouble”, which incited more fan videos than any other.
Disruption folks, that’s the story that is being told live on YouTube, as evidenced by these awards. It’s not actually news, since YouTube’s been streaming more songs than any other platform in the land for a long time. YouTube is the place where the hip and trendy get their new music. Have you heard the song “What Does the Fox Say?” It’s a new phenom from YouTube that my daughter and her roommate played for me when we visited on parents’ weekend a few weeks ago. It’s a Norwegian viral video that’s got almost a billion views on YouTube since early September. Meanwhile, Katy Perry’s new album sold less than 300,000 copies in its first week. Not an apples to apples comparison, but certainly one that lends perspective.
If you haven’t watched these awards, and this YouTube culture thing is news to you, I highly recommend that you take a look. It’s a new world order, driven by platforms that put consumers in the drivers seat.
Meanwhile, according to Tom Taylor’s newsletter this morning, YouTube spent so much money on radio stations last week promoting its awards show that it was a top 20 advertiser….
NPR and its affiliates have always been leaders in digital distribution of programming, innovating new ways to grow audience with streaming and podcasts. An incredible ONE THIRD of the total audience for This American Life, produced by Chicago Public Radio, listens online – either streaming or downloading the show. Now the producers of the show are creating an always on streaming channel of This American Life programs. Launching it on TuneIn Radio, the new feature will include new episodes, as well as selections from the show’s archive of more than 500 hours, streaming around the clock.
“Who left the story faucet on? We did. On purpose.” says Seth Lind, director of operations for This American Life. “We’re excited to offer this easy new way to get the show, particularly past episodes people might have never stumbled upon.”
This is an interesting approach – one that doesn’t cost much, given that it’s simply streaming existing programming. And while the listener doesn’t have much choice in selecting the specific show, the programming is presented in a format that is a lot more of a “lean-back” experience than that of listening to a podcast. My hunch is that it’s a smart move – offering some of the most downloaded programming in an online format that is easy to access. They’ll probably find a much wider audience.
There’s been a lot of news about Rdio lately. Until recently, Rdio was a streaming platform that focused on providing an on-demand library of songs to suit users who like to choose what they want to hear, build playlists, etc.. Kind of like Spotify, except Rdio is a little more aggressive about their subscription model, giving users the chance to use the service free for only a limited time, with various subscriptions available after that.
In August, Rdio announced that they were adding personalized “radio” stations to their offerings, based on the user’s music selections, using “taste profiling” technology from The Echo Nest. This approach enabled Rdio to offer a more “Pandora” like experience to listeners. They began by offering that service, called You FM, free on the web, but just recently announced that it will be available free on mobile devices as well.
They’ve also just announced that their on-demand service is available at half off for college students. Are you confused yet? Wait, there’s more.
Big Radio Broadcaster Cumulus recently announced that they have taken a financial stake in Rdio and will sell all of their advertising. Which will run on the personalized station streams. Now, the actual terms of the deal were not announced, and I’ve heard that no money has changed hands, but apparently Cumulus will own the ad inventory on Rdio’s web based streams – plans are for mobile to remain ad-free. In exchange, Rdio will get access to Cumulus programming, and promotion on its broadcast stations, as well as a network of ad sellers. It’s an innovative deal for both Rdio and Cumulus – Rdio gets a partner that will boost its business prospects, and Cumulus gets a plug and play digital option for its customers, with very little risk.
May they thrive…
Last week was a big news week for online music news and RAIN Summit Orlando was front and center. The speaker list and agenda for the event were spectacular, featuring smart people from online music services and digital savvy broadcasters, global agency executives, and forward thinking industry folks. The discussions were dynamic – professionals from Ford and Pioneer Electronics discussed dashboard strategies with guys from Pandora, Slacker and TuneIn; and top Triton exec Mike Agovino didn’t mince words while debating benefits of ad insertion with agency exec Natalie Swed Stone and Saga’s Steve Goldstein.
It was a breath taking day full of meaningful conversation that took place on the stage as well as in the audience, in the halls and during breaks. The absolutely best part of every RAIN Summit is the audience. It’s a group that’s always engaged, leaning forward, listening and asking questions, engaged with what is going on. It’s one of the biggest and brightest audiences at the entire Radio Show.
David Field’s keynote at RAIN Summit Orlando presented an interesting, if perhaps defensive perspective of the online audio marketplace. He did admit that audio consumption is expanding, presumably with the help of steaming services, but went on to imply that Pandora’s numbers are a hoax and question the value of targetability of audio ads. While I don’t really understand the wisdom of taking such a position, I also have no doubt that the people in the room are smart enough to figure that out for themselves as well. This is not a room full of lemmings.
RAIN Summits are places where the industry – and I mean the entire online audio marketplace – can come together and engage in dynamic dialogue, maybe even debate, on best ways to grow the space. We don’t set an agenda or require our speakers to take a certain point of view. Pushing forward means considering all the perspectives, forming opinions and then questioning them again. That’s the true value of an industry conference, and that’s what I think we witnessed in Orlando last week. It was, in my opinion, the best RAIN Summit yet. If you were there, thanks for coming. If you missed it, please join us next time.
Innovative technology for connective cars continues, this week Pioneer Electronics debuted a new line-up of in-dash receivers that offer bluetooth and usb connectivity for Androids and iPhones. These affordable, aftermarket products make it even easier for consumers to connect and listen to streaming audio in their car, featuring Siri technology for voice commands, simplified Bluetooth connectivity for hands-free calling and audio streaming, enhanced playback compatibility, and Pandora internet radio.
“The smartphone has become a part of most consumers’ lifestyles and a source of both entertainment and communication,” said Ted Cardenas, vice president of marketing for the Car Electronics Division of Pioneer Electronics (USA) Inc. “Pioneer’s new CD receivers provide various means for integrating a variety of smartphones into the vehicle.”
At prices starting at $90. That sounds like a pretty affordable price point to me.
Pandora continues to lead the pack of services that come integrated into the new offerings, they recently announced that they are now integrated with more than 100 car models and 23 manufacturers. That doesn’t mean other services are unavailable – just that Pandora is front and center as the featured service in the car. Mazda recently integrated Pandora into its 2014 Mazda6, incorporating voice commands that make listening while driving very easy and fun.
Pioneer Electronics Ted Cardenas and Pandora’s Director of Automotive Business Development Geoff Snyder will join a panel discussion at RAIN Summit Orlando on Dashboard Integration. Other panelists include Ford’s Global Lead, Business Development and Partner Management Scott Burnell, Slacker SVP Steve Cotter, and TuneIn VP Kevin Straley.
RAIN Summit Orlando takes place Tuesday September 17 starting at noon and finishing with a cocktail reception in the evening. Register here, and use the code Audio4cast to save a few bucks. I hope to see you there!
Digital revenue is the bright spot for radio according to the newest revenue data out late last Friday from the Radio Advertising Bureau. Digital revenues grew 16% over last year’s second quarter and are up 13% for the year. Serious attrition continues for network dollars which are down 4% for 2Q and the year. Digital is now poised to overtake network’s share of radio’s revenue pie.
The big elephant in the room is spot radio, which was only flat for the quarter but is still off 1% for the year. Of course this is not a good trend in the face of a modestly recovering economy. Ad revenues continue to shift to online and mobile media, as evidenced by the growth of radio’s digital revenues.
In a move that is likely a reaction to news like this, Clear Channel, which owns Katz Radio, the sales firm that controls the lion’s share of national spot revenues, has just signed on with IPG, one of the largest ad agencies, to build an automatic buying platform for radio inventory. According to Mediapost, “The initiative, which was developed by Interpublic’s Mediabrands unit, is dubbed the Magna Consortium, and is part of the agency holding company’s mission to automate 50% of its media-buying by 2016.”