Pandora announced today that its programmatic ad-selling solution, Premium Programmatic, is released from beta and is available to all advertisers. Started five months ago, Premium Programmatic offers display inventory, and was carefully introduced to an initial test group of selected advertisers.
Learning from Testing
RAIN News spoke to Jack Krawczyk, Pandora’s VP of Ad Product Management, who spoke about the beta period preceding today’s launch. “During the beta period we had two things we wanted to learn. First, are we set up operationally to handle it — a resounding yes. Second, figuring out the mix that customers want to buy. The thing that makes programmatic work in many cases is retargeting. But we discovered a higher appetite for high-quality new audiences. Pandora’s first-party data includes declared information — age, gender, and location — but also inferred targeting segments that we’ve built around multi-cultural, political, deeper household demographics.”
Bundled into this announcement is that mobile display ad inventory is now included in Pandora Premium Programmatic, which started as a desktop solution for Pandora’s computer interface. Pandora said that 80% of its nearly 80-million monthly listeners tune in to Pandora on mobile devices.
Jack Krawczyk spoke about the mobile opportunity for advertisers. “There’s a lot of enthusiasm to transact on that in the web product, and especially in mobile. There are very few publishers that offer programmatic buying in the mobile app space, and we’re excited to be the largest one that does offer it in one location.”
Private vs. Public
Pandora’s platform is a so-called private exchange, where advertisers can plan Pandora-specific campaigns based on audience intelligence, segmenting, and targeting. Pandora has its roots as a technology company, and owns a Big Data operation stretching back ten years. “As one of the largest logged-in user bases in the country, our rich targeting capabilities are driven by the insightful data points we’ve been processing from our listeners for nearly a decade.”
The company withholds its display inventory from public programmatic buying platforms, and advocates for private exchanges. In a recent blog post, Pandora issued a warning about public programmatic exchanges, characterizing them as risky for advertisers who want control of where their ads appear. In public exchanges, advertisers generally buy audience targets, not necessarily publishing brands with which to affiliate. Pandora markets its private exchange as a best-of-both-worlds solution, powered by data-rich audience targeting in a “brand-safe environment.”
“There’s value in the reach of public exchanges,” Jack Krawczyk noted. “We can offer an audience in the tens of millions, which makes it one of the largest in the U.S. We can’t touch the hundreds of millions like an ad network can. But premium brands want control over where their messages appear.”
Display and Audio
While programmatic for streaming audio advertising is a key trend leading to a more digitized future for audio according to many industry observers, Pandora’s programmatic offering is concentrated on display advertising. Pandora display ads can accompany or stand alone from commercials that most listeners hear. (About 3.5-million Pandora users subscribe to Pandora One, which provides ad-free listening.) In the last two years, Pandora has invested in building a localized, human-powered sales force to compete with AM/FM radio for revenue share from local radio advertisers.
We asked Jack Krawczyk about the apparent bifurcation of display and audio advertising, and why Pandora seems to be concentrating its entire programmatic effort on the display side.
“It depends on how you define programmic. It’s a loose term. You can argue that the way we’ve integrated with Mediaocean and Strata two years ago — that was an effort to enable technology to plan and bill a campaign. The only thing that remains there is where the ad gets served — whether the creative gets delivered to Pandora or served by the demand-side platform. We’ve learned during these two years, that style of programmatic is mostly what the market demands. We’ll continue to support that.”