• by Erik Sass  @eriksass1, December 28, 2011

Alcohol and tobacco marketers have long tried to link their brands with popular music, hoping to reach young adults by associating themselves with the cultural cachet of up-and-coming bands.

Now the rise of Internet radio is giving them a new channel for marketing promotions, as illustrated by Budweiser’s sponsorship of a live concert series on Pandora.

On Dec. 13, Budweiser sponsored a free concert by Dawes, a rock band from Southern California, which performed live in front of over 230 fans in Portland. Budweiser will now distribute video of the concert online via a dedicated microsite, which will also feature future performances in the Pandora concert series, along with a variety of extra content, including behind-the-scenes footage, interviews and curated mix tapes.

As of July, Pandora had 100 million registered listeners, including 36 million monthly listeners, giving it a 3.6% share of total radio listening. The company is also aiming to take more advertising dollars from radio, sparking a controversy over the fine points of audience measurement and the comparability of online and traditional radio ratings.

In fiscal 2010, Pandora took in $55.2 million in revenues from a combination of subscriptions and advertising, rising to $138 million in fiscal 2011 -- but the company also posted losses both years, due to increasing costs from royalties payments.

Investors are clearly concerned about the company’s profitability: after debuting at $16 per share in June 2011, Pandora’s stock has sunk to $10 per share at press time. Brand sponsorships, including free concerts, may help the company raise revenues without also raising royalties costs.