More audio ads coming to Pandora


From As Pandora’s audience begins to mirror that of radio listeners at large, the company will likely run additional audio ads, Pandora CEO Joe Kennedy said at the econSM Conference Thursday. Currently, Pandora runs only a small number of audio ads, he said.

Kennedy said that increasingly people are listening to Pandora radio outside their PCs. “We don’t want you looking at an ad while you’re driving,” he said. “Pandora is not just something you do on the computer; it’s something you listen to on the home stereo, something you listen to in the car, so we will utilize a wide range of advertising forms.” Kennedy also said the company was looking at introducing additional premium subscription offerings, although it continues to believe that the “vast majority” of Pandora users will access it via a free, advertising-supported model.

He also listed a set of statistics to demonstrate the service’s success on smart phones. Among them: On a daily basis, about 400,000 people listen to Pandora on the iPhone or Blackberry. The average length of a session is one hour, 40 minutes. And iPhone users are disproportionately likely to buy music via Pandora, compared to web users.

RBR/TVBR observation: As the RIAA and Copyright Royalty Board successfully forced webcasters to sell a lot more audio advertising to survive, much of those dollars are being diverted from advertisers who might have otherwise advertised on local radio. The rates are very competitive and they can be geo and demo-targeted. Bottom line, the competition for those audio ad dollars is more fierce than ever and it is not helping terrestrial radio’s bottom line.