Although Apple’s iAd service is coming July 1, Pandora couldn’t wait and has created its own advertising platform to attract big name marketers to its latest app. Starbucks, Lexus, and Budweiser are the first brands on the new Pandora iPad advertising platform. Like iAds, Pandora’s ad platform features video, audio and a variety of interactive elements — all without leaving the app — that aren’t available on its iPhone version, at least not yet. Aside from the cosmetic features, since Pandora offers itself as a personalized radio service, it also says it can “hyper-target” its listeners by gender, age, location, the type of music they like, and time of day.
In an e-mail interview with paidContent, John Trimble, Pandora’s chief revenue officer, discussed the rapid pace of the service’s ad growth. “We did $50 million in revenue in 2009, up from $20 million in 2008 and we expect significant growth in 2010,” Trimble said. “We started web advertising in Feb. ’06 and mobile ads in May ’09.”
The introduction of the ad platform is meant to capitalize on Pandora’s existing relationships with large marketers, Trimble said. In general, of the top spending brands in the U.S., more than 70 percent have advertised on Pandora since Jan ’09. And of the top internet spending brands, more than 60 out of top 100 have run on Pandora in the last 16 months, Trimble added, citing stats from TNS Media (now Kantar). While Pandora does offer subscriptions, advertising support is by far Pandora’s biggest revenue generator, though Trimble declined to offer specifics.
Many publishers and services have high hopes for driving premium ad sales from the iPad. For Pandora, which has 54 million registered users in the U.S., it represents an extension of its presence from smart-phones, as well as TVs and Blu-rays. Although there are only 2 million-plus iPads in consumers’ hands, Pandora views the device as fitting in perfectly with its other media offerings.
In the case of the iPad, Pandora is also trying to find ways of matching its customizable playlists to advertisers. For example, the Starbucks ad lets users build a “however-you-want-it Frappuccino,” which then generates a branded radio station playlist that reflects users’ “beverage taste.”