The streaming music service Pandora is rolling out pre-roll video ads to its free tier of service, letting users play a song or album on demand after viewing a 15-second video ad.
Currently, Pandora users can have the application create playlists, but they cannot listen to a particular song or album on demand unless they upgrade to one of Pandora’s premium paid offerings.
Pandora already has a video ad producer called Video Plus, but by tying views to on-demand requests, Pandora is betting that it can significantly increase its video advertising revenue.
In a message to media buyers and advertisers, the company said a beta test of the on-demand video ad product showed it would benefit both parties. Pandora noted that 100% of its users are registered, and all of the content on its platform is brand-safe.
“Our early tests indicate that the new experience is resonating with our users, with up tot 2 out of 3 accepting the reward offer. And, about 90% of those who choose to opt-in are watching at least 15 seconds of a video ad,” the message said. “These numbers are incredibly promising and we’re excited to be providing a feature that allows advertisers to align their brand messages with consumers in the moments they choose.”
Video ads typically sell for a premium over text or audio ads; a source at one media buying firm confirmed that's the case at Pandora.
The new product also gives Pandora -- the first mainstream music streaming application in the U.S. -- a product that its paid competition does not have.
Until now, Pandora Video Plus could be cued to replay or skip tracks. The new video ad product significantly changes the use case, as requesting songs or albums on demand has become a hallmark of paid services like Spotify or Apple Music.