With almost half of all radio listening happening in cars, Pandora in recent years has focused on building its streaming service directly into vehicles. It’s now available in some 130 models from 23 major auto brands, representing an audience of more than four million in-car listeners.
To monetize that growing audience, Pandora will begin rolling out in-car advertising this month in the form of 15- and 30-second spots that run across the 130 vehicle models as well some 270 aftermarket music-listening devices in cars.
On board as launch sponsors are brands including BP, Ford Motor Company, State Farm and Taco Bell. Each is exclusive by category and their ads will run for a period of six months. Working with the initial group of advertisers, Pandora said it hopes to learn more about the in-car audience to improve ad targeting over time.
Marketers will be able to run automotive-only campaigns as broader ones that include in-car listeners. As of December, Pandora overall reported 76.2 million active listeners and 1.58 billion listening hours across all platforms.
“With an 8.6% share of
total U.S. radio listening and unmatched growth and adoption of Pandora in the car, we are now seizing the opportunity to connect advertisers with a more targeted audience than traditional radio can
provide,” said Pandora CMO Simon Fleming-Wood, in announcing the move on Monday.
The company launched its effort to tackle the drive-time listening market in 2010 through a brand partnership with Ford before going on to team with several other automakers including BMW, Toyota, GM and Honda. The Web radio platform integrates with the digital dashboard systems of cars, allowing users to control it in some cases via voice commands.
With the groundwork of building out the service well underway, extending advertising was the next logical step. During Pandora’s third-quarter earnings call in November, CEO Brian McAndrews called the automotive business, “a potentially very strong market for us.” He noted the company already has sales offices in Detroit and L.A. that will benefit new ad initiative.
For Pandora in-car listeners accustomed to an ad-free experience, however, hearing sponsor messages on their personalized stations may not be such a welcome development. A company spokesperson said in-car listeners will likely hear one to two ads per session, with an average commute lasting 20 to 30 minutes.
Pandora listeners generally hear 2.5 audio ads per hour, according to remarks last month by Dominic Paschel, vice president of corporate finance and investor relations, at an industry conference. The average in-car user listens to Pandora’s in-dash service for a total of an hour a day. Pandora One premium users will still be able to listen ad-free.