Oneupweb : Pandora – Jack in the box…Ace in the hole

Pandora is the entertainment that I turn to when I want to be active around the house and get some projects done.  It doesn’t require my stationary attention, as I have wired my entire house for sound.  On occasion, I’ll float back by the TV to see who the artist is for the catchy tune I’m currently hearing, or to like, dislike, or skip ahead to the next selection.

Something that I’ve noticed recently is the increasing frequency of audio advertisements.  There have been a few ads appearing lately that have caught my attention.  Particularly a new ad from Jaguar that has been circulating, as well as some ads from Farmer’s Insurance and Taco Bell.

While I am known to be a Taco Bell fan – with similar pregame rituals to Justin Verlander – and I might be in the market for other insurance options through Farmer’s Insurance  -  the Jaguar ad seems to be a little out of place in my household.  I think they must have been targeting via zip code and confused my humble abode with the McMansions up on the hilltop.  I did notice that some of their Jaguars could use replacing as they were starting to look so last year and they’re probably bringing down the value of my hood.

My HTC EVO 4G has the Pandora App installed, which was the very first app I downloaded when I stepped up to a smartphone.  I’ve read that it is the most downloaded free music program on Apple’s and Google’s app stores and I do frequently tune in via mobile while traveling.  While I enjoy Pandora loud and proud in my home (turning it up loud for the McMansion neighbors), it is in the car where I am missing my custom stations.  While I could upgrade my car stereo to tune in my mobile Pandora app while I drive, I am looking forward to the day when I own a car that is factory equipped with Pandora and ready to play.

As this Pandora integration into new vehicles unfolds, their subtle takeover of traditional radio stations and their advertising dollars will continue to follow.  Pandora has already formed partnerships with many major automobile manufacturers for their 2012 models and can be heard playing in many new automobiles from companies like Ford, Chevrolet, Mercedes-Benz, BMW, Toyota, and Hyundai.  Just get some local sports and National Public Radio stations on Pandora and I could go without FM, AM and CD’s altogether.

Pandora has been doing well, revenue wise, by serving up their targeted ads, which helped with Pandora’s projected income of between $270M and $275M in total revenue for 2011.  With the benefit of their targeted advertising down to the zip code of the registered user, they can serve very specific audio and display ads to a more highly targeted area than what traditional radio stations can offer.

While it has been stated that Pandora has gained 4.3% of the total US radio listening audience, the major thing holding Pandora back from taking over more advertising from the local radio stations is a lack of a way to measure audience listening from one to the other.  While Pandora reported total advertising revenue of $176 million in the 12 months ending last July 31, 2011, they think they deserve more of the total $17 billion annual radio advertising spend.  A universal apples-to-apples comparison metric is necessary to measure the audiences of traditional and internet radio networks before the majority of radio advertisers will make the jump to streaming radio formats.

As Pandora begins to step further into hyper-local targeted ads, they can take advantage of the mobile side of things as well by utilizing the actual IP addresses and specific locations of the devices to deliver the ads.  Pandora could also eventually analyze their mass of user behavioral data to further refine the ad placements.

They could make semi-behavioral educated guesses as to the style of users’ listening habits and at which times and places they are listening from in an effort to help them shape their targeted personas and combine that with the age and gender profile data from user profiles.  What if Pandora could tell exactly where you are as you are traveling down the road in your Pandora equipped vehicle? “Take exit 123 and look for Vinney’s Sub Shack for your buy one, get one free menu item!” Word has it that Papa John’s Pizza has already been delivering targeted mobile ads through Pandora, advertising their “Any large pizza for $11.”

This level of user targeting has many politicians seeing the value in advertising within this channel as this 2012 election year unfolds.  I hope that when the political ads start appearing on my Pandora stations they help to portray the politicians’ positive voice vs. the mudslinging death matches we get on the television.  Either way, 2012 is said to be a year of record political spending and there will be no advertising channel that will go untouched, especially if the numbers show it is where the people are.