Pandora's Programmatic Offering Takes Lumps In OTR Global Report

According to a new OTR Global report published by analyst Michael Foster and reported by Benzinga, Pandora’s programmatic ad-buying platform has been met with “tepid buyer enthusiasm.”

Per Benzinga, one source told Foster: ”We were approached earlier this year to test out Pandora's private exchange. It has boosted both CTRs and conversion rates. However, what we can do with it is fairly limited, and total volume is still miniscule compared to Facebook or Google, so that has limited our spend on it."

Pandora’s programmatic offering has been growing, but it still does not extend to video interstitials and audio ads. While Real-Time Daily was told that those ads are still sold on a direct basis because Pandora wants to keep control over the “fidelity of the creative” given how “intimate” audio and video is to the user experience, Benzinga notes that Foster said buyers have “expressed ‘disappointment’ that the programmatic exchange does not extend to audio advertisements.”



Pandora is seeing its fiercest competitors in the space beef up their programmatic audio offerings. Apple recently doubled down on iTunes Radio by partners with a slew of ad tech companies, and “programmatic radio” firm Jelli Radio just raised $21 million in funding. Jelli’s tech is being used by a handful of companies, including radio broadcasting giant iHeartMedia. 

Xaxis, WPP’s programmatic-buying arm, is also bullish on programmatic audio. Nicolas Bidon, Xaxis UK’s managing director, recently told Beet.TV: “Digital audio is a very interesting medium from a branding perspective, because it’s starting to get really massive scale. With audio, you don’t compete on the page with content or with several ad units. You have 100% of the user’s attention.” notes that Pandora shares fell after OTR Global’s report, which downgraded the stock from “Positive” to “Mixed.” Shares of Pandora were down over 8% on the day.

It is, however, still early in Pandora's programmatic game. The company expanded into mobile display only a month ago, and it has only been one year since the company tapped Jeremy Randol to lead its programmatic efforts.

If pressure from buyers persists -- and competition stiffens -- Pandora may pivot, but for now, audio and video are off-limits for its programmatic buyers.

1 comment about "Pandora's Programmatic Offering Takes Lumps In OTR Global Report".
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  1. Seth Ulinski from TBR, July 16, 2015 at 11:01 a.m.

    Pandora has a unique data set, scale, and consumer's attention -- hopefully they have a multi-prongued programmatic strategy to monetize. Plenty of options that can extend beyond their O+O property/platform.

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