How Pandora Creates Value for Audience, Artists and Advertisers

Pandora is certainly one of the most listened to Internet radio services in the US and possibly beyond. Their interactive service enables listeners to build channels around their preferences, share music and listen on many mobile devices. With millions of registered listeners, they have a  lot of data about those listeners – age, gender and location, as well as what types of music and artists they prefer.

The data Pandora has on listening preferences is of course valuable stuff to advertisers, and Pandora has been doing a pretty good job of selling unique music sponsorships to key advertisers. Last year Pandora worked with The Dave Matthews Band to debut his new album “Big Whiskey and the Groogrux King”. They streamed the album for a week before it actually was released, built a special landing page for the debut, and sent a message to every registered Pandora user who had either signed up for a Dave Matthews channel, or had given a DM song the Pandora “thumbs up”.

According to Reuters, the promotion resulted in more than half a million streams, with 8,000 linking through to buy the album on iTunes. Pandora gets the revenue share from all those downloads. They sold the sponsorship to Brita for an undisclosed amount.

Later in the year Pandora offered John Mayer fans a couple of video interviews, along with a customized playlist of his favorite songs. AT&T bought a sponsorship of the promotion which netted 81 million impressions. Since then, Pandora has launched or pitched a bunch of other similar offerings from prelaunch listening opps, to video interviews and/or artists’ custom music lists – for big name artists like Jack Johnson, Jewel, Miley Cyrus, Switchfoot, Miranda Lambert, the Walkmen, Mason Jennings and Rogue Wave.

Relevant, rare offerings for listeners; valuable, targeted marketing opportunities for artists. Sounds like a great strategy for engaging advertisers and building revenue…

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