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Pandora competing 'apples to apples' with traditional radio for ads, says CEO

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Pandora 4.0 for iOS
Pandora 4.0 for iOS

For streaming music service Pandora, advertising revenues haven’t kept up with increasing licensing costs, even causing the company to cap its free mobile service at 40 hours per month. But that could soon change, with developments that will let ad buyers compare audience radings from Pandora and traditional radio side by side. Speaking to Bloomberg, Pandora CEO Joe Kennedy explained that services accounting for 80 percent of the US’s local ad sales will get easy access to Pandora’s ratings data by May.

'Pandora will now be there side by side, apples to apples.'

The news could mean easier buy-ins for companies that traditionally had to research Pandora ratings themselves. "Pandora will now be there side by side, apples to apples, in the same systems used every day to purchase radio advertising," Kennedy explained. Arbitron recently announced its intention to rank Pandora, and Strata Marketing Inc., which serves about 1,000 ad agencies, began including Pandora ratings on its network in January and the results will be presented with Pandora’s earnings report on Thursday.

The news mirrors what’s happening in streaming video, with Nielsen’s recent announcement that ABC, ABC Family, and ESPN will use its ratings data to manage online ad sales. As users continue to shift their media consumption away from TV and radio and toward streaming and on-demand services, advertisers will need to keep up in order to accurately determine where to spend their money. In the case of music, the question is whether the predicted growth in advertising can keep pace with the swelling costs of licensing, which Pandora says has increased 25 percent in the past three years.