Dive Brief:
- For $4.99 per month, Pandora Plus will grant users an ad-free experience with more control over song selection and skips and better access to music in weak internet connectivity areas. Another part of the product's transformation comes in the existing ad-supported model, where marketers can now integrate video ads that, when watched, will allow users to skip or replay more songs of their choice.
- “We’re methodically and passionately developing the world’s most personal music experience,” said Tim Westergren, founder and CEO at Pandora, in a release on the company website. “And that includes flexibility in how you listen and what you pay for it. Whether a listener wants to take advantage of our enhanced ad-supported experience, our groundbreaking subscription radio service, or our fully interactive on-demand option coming later this year, we have a solution tailored for you at a price point you can afford."
- The Plus platform's ad-related features went live yesterday and will be available to smartphone apps in the coming months, according to the company.
Dive Insight:
The option for advertisers to sponsor videos in exchange for Pandora users having more control over their free listening experience fits into an ongoing marketing strategy the internet radio platform announced in June, which outlined a fresh focus on native mobile video. Earlier changes replaced disruptive pop-ups on the mobile app with more responsive display ads, including video that could be opened and watched with sound in full screen. Pandora's latest move is another way of encouraging users to watch and engage with video marketing, as doing so grants greater flexibility of song choice.
In June, Pandora began auctioning in-app advertising via a private ad exchange, and just a month later it inked a deal with Moat to develop an entirely new metric tentatively called ad “audibility” — akin to the well-known viewability metric for display and video advertising. With fierce competition from streaming services like Spotify and Apple Music, Pandora appears to be trying to cut its own path in the digital music space, and it will be interesting to see how the platform's 80 million monthly users respond to the addition of ads that provide more listening control.
In its most recent reported financial results, Pandora said that the number of active listeners dropped from 79.4 million a year ago to 78.1 million in the second quarter. While ad revenue missed analysts’ expectations, it still grew 15 percent for a total of $265.1 million.
