Pandora Switches to Programmatic Advertising

Last week, Pandora announced that it now offers audio inventory programmatically. It is one of the last three major music streaming platforms to negotiate through automated advertisement. But at a moment when digital audio is obtaining more ad dollars than ever, Pandora figured this would be the best time for an upgrade. The site will sell digital space through high demand companies including Media Math and The Trade Desk.

Rivalries gets advertising head start

Pandora shows little concern about playing catch up to rivals Spotify and iHeartradio, who began programmatic advertising late last year. Company confidence is not a factor. Pandora has a reach of about 92 million, according to ComScore, while Spotify has 89 million and iHeart is far behind with 30 million. At this point, the company focus is not entirely on one-upping the competition. Pandora has done its research, and is diving deeper into the digital market as it continues to rise.

Show me the money!

The first six months of 2017 showed considerable promise for digital audio advertising. During this time, it saw a 42% growth, resulting in $603 million. $448 million of this came from mobile ads. According to VP of revenue operations, Chris Record, 85% of Pandora’s purchased inventory is from mobile. Through its recent partnership with Trade Desk, the company will be able to sell audio ads similar to how it sells video or display with agencies.

The next steps

Despite Pandora’s newest move, marketers are still leaning toward Spotify for their ad buys. According to studies by RBC Capitol Markets, marketers are most interested in Instagram, Amazon, and Spotify for their advertising platforms. As of now, Pandora ranks 8th in the list. But these changes are still young and Pandora still holds the most listeners of a music streaming site. Soon, we will see how this shift affects their place in the marketing world.

Bernie Levi, the author, is the Project Coordinator of Marketing Keys. She loves to stream audio on all of her devices and has a personal affinity to Spotify.