Pandora, Spotify Discuss Ad Dollars at RAIN Summit West

Robin Flynn of SNL Kagan hosted a panel discussion called “Charting Digital Audio Ad Dollars” at RAIN Summit West on April 15th. Advertising is on the upsurge, she concludes, and cpms are solid.

Mitchell, Van de Wyer and Kritzman on stage at RAIN Summit West

Pandora SVP of ad sales Steven Kritzman, Katz Online President Brian Benedik, Spotify VP of ad sales Jon Mitchell and Alexis Van de Wyer, President of Adswizz, Inc. were the panelists contributing to the panel hosted by Flynn.

There is a healthy interest in advertising on Internet radio, and the cpms are getting stronger. Contributing to the interest is Internet radio’s ability to deliver key groups such as 18-34 year olds, Hispanics and upper income groups. Advertisers from many leading categories are now active in Internet radio, including finance and entertainment along with auto, restaurant and retail. Mitchell said that Spotify has 1,400 different advertisers.

Nonetheless, audio ads continue to be under monetized. Campaigns that include video in the mix with audio will produce a higher cpm overall, but targeted local campaigns are also pulling higher cpms. Benedik estimated that while generally network radio CPMs are $4 to $6, he said that geo-targeted campaigns can boost CPMs to $6 to $12.

Local advertising is gaining interest on Internet radio, led by the precise targeting abilities of Pandora. Thanks to listener registration, platforms like Pandora and Spotify can target by listener demographics, geographics, or taste in music. Benedik is looking for local revenues from political campaigns this year to be healthy.

The group acknowledged that monetizing audio effectively remains a challenge. Flynn notes: “Given that 70% of Pandora’s listeners listen on a mobile device, Kritzman said, the company is working hard to better monetize those listeners. Pandora execs have recently said the company’s RPMs, or revenue per 1,000 listening hours, are $60 to $70 for its desktop Internet business versus $20 for the mobile side, but mobile is expected to catch up.”

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