Pandora opens box of delights for advertisers as million mark looms

By Brendan Coyne | 2 August 2013
Jane Huxley

Internet radio service Pandora is going to meet its target of a million Australian users within the next five months. That's a new channel to a million Australians for marketers to tap. What's more, brands will know who they are targeting – age, location and what they like to listen to – and can build up a complex profile. That should be music to brands' ears, according to Jane Huxley.

Huxley anticipates that the global brands that tap into the service's 219 million US users to be advertisers in Australia, as well as domestic brands. She has hired a new sales team to make that happen.

Jon Stubley, former group direct sales manager at Macquarie Radio Network, has been appointed Australian sales director while Shaun Alexander joins as account director from Spiral Media, where he led the sales team across APAC. Both have rich pedigree in selling music advertising.

They will be tasked with selling a minute's worth of advertising for every hour of audio. Huxley would not be drawn on the kind of CPMs that would entail but claimed that the level of detail in subscriber's profiles would make the service attractive to the premium end of the market. In the US, she said, the service can even tell which way subscribers vote.

That's a little way off in Australia, which is a shame for Rudd, Abbott et al, especially as the service runs on an advocacy model. “Every user recruits eight others,” said Huxley.

She doesn't want to use the word 'social', but it is, in the traditional sense if users are sharing the service on that scale.

Huxley said it is so viral because of the clever technology that bases music streamed on individual preferences. So users discover new music that they are likely to like. Then they tell their friends.

That is possible because Pandora is not just a music company, said Huxley. “We are a data company.”

Advertisers like data and they will be able to tap the vast majority of Pandora's user base. Huxley said the business was 98% ad-funded with subscribers largely signing up to get better quality via a higher stream rate.

As well as serving audio ads, the service also serves display ads when users interact with their device – change a channel, thumb up or down etc. But not at any other time, said Huxley, because there is no point serving ads to somebody's pocket or handbag.

She might be right.

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