1-10-2013
At the Consumer Electronics Show yesterday, Pandora Chief Revenue Officer John Trimble told Radio Ink without hesitation, Pandora is Radio. "All day long. We sure are." Trimble also says the fact that Clear Channel launched iHeartradio is total validation for Pandora. "I think it's just another really good brand in the marketplace. We have been out there slugging it out basically on our own for a long time. To have someone like Clear Channel and Bob Pittman really validate the opportunities in digital radio, I think, says it all." Unfortunately Trimble was unable to answer the big question we had for him which was how Pandora came up with its declaration that it now owns over 7% of all total radio listening. Here's more from our interview with Trimble
RI: The more people sign up for Pandora, and consume it, the more your cost goes up. What is the give here? How does the one expense line reconcile with the revenue generation line?
Trimble: I think the idea now is we are taking market share. If you look at what we just announced this week, we now have 7.19% of all radio listening. Now, there is a latency of catching up in the ad sales efforts, which is why if you look strategically where we are going, we are being a very disruptive influence across broadcast radio across every part of their business, from national to spot to local.
We are still expanding local. Probably, one of the more successful ventures we had this year from a sales perspective is we started in 5 markets, we ended the year in 12. We are going to go significantly deeper across the country each year. From the ad load perspective, we still have plenty of opportunity. It is not an immediate issue that we have to focus on.
RI: Like broadcast radio, you have so many avails. Part of the value proposition of Pandora is that the commercial load is limited. How far can you go with commercials and how far do you need to go in order to make this work?
Trimble: I think at this point, we are still evolving the broadcast radio marketplace. We continue to penetrate it on both the national, network, local, spot side. I think at this point, where we are on the load factor, we have the ability to provide a really good user experience as well as a really good advertiser experience. The value to advertisers for us is they don't get caught in these pods like you do in terrestrial radio or broadcast radio. They can own a significant share of voice which resonates for their brand, and we have the ability to deliver a much more targeted experience. At this point, the ad load is working for us. It works for both the advertiser and it works for the consumer experience. I think for now, we stay the course.
RI: When your salespeople are out talking to advertisers, for example a car dealer, what is the Pandora USP? Advertisers are being inundated with local television, radio, newspaper, yellow pages, and here come your folks.
Trimble: Great question, and it is probably one of our fastest growing categories as we launched local this year. I would say, first and foremost, there is a brand relevance. The local dealers know Pandora. They use Pandora. Most of them have had it embedded in the national advertising spots, which is a fantastic footprint for us.
But, then I think from an analytical perspective, based on the way we cut into the data with our friends at Triton and our own internal logs, we are as competitive and as large as any of the local broadcast radio buyers they have been doing business with. So, we start there. Then we talk about measurement and our ability to drive tangible measurement that might night be there in other mediums. Then, it is really looking at the ROI, how we can correlate driving people directly back into the dealership based on a Pandora ad. That has been resonating extremely well.
RI: From an ad standpoint, what seems to generate more consumer interaction: video, audio, pictures?
Trimble: They all work, which is the success of our business. Why we've grown it as quickly as we have is because, based on the multi-platform engagement offering that we are delivering both to the digital world as well as the broadcast radio world. It works. The results are there. The ROI is there. the measurement tools are there, especially from radio. What I would say is, the killer ad, is the audio ad. 75% of our listening on Pandora now is mobile. If you think about mobile, it has been this disruptive, convergent mechanism across so many platforms, across so many mediums. But I think with radio, this is just a transistor radio. Now, we are the closest point to purchase. It really displaced where radio was.
Radio Ink would like to thank Fred Jacobs and his team for conducting our interview with John Trimble at the Consumer Electronics Show in Las Vegas.
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