The rapid expansion and growing sophistication of today's audio advertising market is prompting the global advertising community to revisit audio advertising opportunities. Is 2017 the year for audio? Pandora certainly thinks so.
Pandora Media's chief revenue officer, John Trimble, has a front-row seat to the evolution of audio advertising. He oversees the monetization of Pandora's display portfolio, mobile, audio, and performance marketing efforts. Real-Time Daily recently spoke to Trimble about these issues.
Real-Time Daily:Pandora is a media and audio company. You have suggested that audio may be the most disruptive medium in the ad-tech landscape. Why?
John Trimble: What ultimately sets audio apart from display and video is the scope of its reach and the depth of its impact. The ubiquity of audio today means advertisers can reach consumers, free from the worry of being skipped or dismissed (in the case of Pandora), practically any time and anywhere: in the car, on their mobile devices, or when engaged with any number of connected technologies across the Internet of Things spectrum. What other digital format can do that?
The power of modern technology, when combined with the innate storytelling power of audio, offers advertisers an extremely effective means to engage and connect with consumers. Unlike the human eye, which can take in a tremendous amount of visual stimuli at one time, the human ear is incapable of this stimulus juggling act. So, for an audio advertiser, the attention of their audience is practically guaranteed.
As voice recognition technologies move us closer to an inevitably screen-less world, voice is quickly becoming the new touch. Audio transcends screens, engaging consumers throughout their advertising-cluttered, always on-the-go lives. With an estimated 155 million active streaming music listeners in the United States alone, advertisers have good reason to increase their digital audio ad spend.
Real-Time Daily:Pandora is sitting on a mountain of data about audiences, preferences, lifestyles, etc. What's the value of that data?
Trimble: Pandora collects a billion data points a day from our listeners. But the range of this data is arguably more important than its size.
It’s all about data sets working in tandem to inform smart targeting. For example, user-declared registration data—age, gender, zip code, etc.—is more helpful to advertisers when paired with music preferences and listening habits. You can take it even further with our proprietary data segments identifying audience characteristics like ethnicity, political leaning, life stage, and household income.
We also leverage third-party partnerships to glean insight on purchase behaviors, lifestyle, device usage, and wireless carriers. As a result, this mountain of data’ creates valuable opportunities for targeting and engagement. In essence, it's the doorway to making ads more personal, and therefore, more effective.
If you think about it, Americans today spend an average of four hours every day with audio, which is ubiquitously available and piped directly into our ears from all of our connected devices and dashboards. And 79% of audio consumption now takes place where visual media is out of reach. In the "earbud generation," ears mean more than eyes to marketers that believe that music has the power to break through to the brain and resonate in ways visual marketing cannot.
When you combine that type of time spent and attention with a top-tier data strategy, you get a marketing superpower of sorts. For example, we helped the city of Las Vegas achieve strong ROI through a branded streaming content station on Pandora called Vegas 24/7 Radio. The campaign, which targeted messages to the most relevant of listeners in key feeder markets, is credited with generating more than 150,000 incremental visits to Las Vegas, which represents a $110 million in incremental tourism-related revenue.
Real-Time Daily: Pandora has something it calls "intelligent ad delivery." Can you explain what that is?
Trimble: Pandora’s intelligent ad-delivery technology allows advertisers and audiences to benefit from data science by leveraging listener behavior to determine optimal delivery opportunities for audio ads. This generates better performance for advertisers without compromising listener engagement or enjoyment.
I believe that marketers will embrace intelligent and dynamic advertising as a way of uniting creative with data in the targeting and delivery of audio advertising.
Real-Time Daily: What makes audio advertising more data-rich than any other media? What can you learn about an audience through audio advertising formats?
Trimble: More than three-quarters of all digital radio is now consumed through mobile devices. These devices provide access to a wealth of previously unavailable insights into consumer preferences, habits, and behaviors. By leveraging these data sets, ad personalization is no longer just about understanding the type of consumer being reached. It’s also about understanding where you’re reaching a consumer or what the consumer is doing when you’re reaching them.
Real-Time Daily: How specifically is Pandora playing in the programmatic ad space?
Trimble: Programmatic is a core strategic initiative within Pandora. To date, we’ve been extremely active with our display offering. Pandora’s display inventory is available for programmatic buying across desktop, smartphones and tablets, and delivers viewable inventory, qualified data and an engaged audience at scale across devices. Pandora’s inventory is available through private marketplace and preferred deals, powered by the Google DoubleClick Ad Exchange.
Two key priorities for us this year are to bring best-in-class video and audio programmatic solutions to market.