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.