Pandora ad load: audio down, video up, display the same (analyst)

canaccrd genuity may adsFinancial services firm Canaccord Genuity released its monthly audit of Pandora ads for May, showing that as listener hours increased, average ad load dropped incrementally. The company uses a methodology that tests within several registered identities in different demographics, across four geographic markets (New York, Portland, Austin, Nashville). Canaccord Genuity has produced the monthly ad-load reports since April, 2013.

According to this testing, Pandora served 5.67 audio spots per hour in May, down from 5.94 in April. That translates to about 2.5 commercial minutes per hour, down from nearly three minutes in April.

Canaccord Genuity also noted that video ads grew by a multiple of five from April to May, with 0.5 video spots shown per hour, on average.

The study tracks ad categories in addition to volume. the finding for May showed auto, restaurant, and retail ads as the most frequent, with car ads taking 26% of the load. (Auto ads were at 11% in April, and a whopping 35% in March.)

Pandora presents display ads as stand-alone units, and also accompanying creative with audio ads. Canaccord Genuity breaks that down; in May, stand-alone display ads were 7.7 per hour, with total display units at 13.8 each hour.

The study noticed a shift to small-business and local ads, which grew in volume, displacing some national brand advertising.

(NOTE: Canaccord Genuity is bullish on Pandora stock (P). Its analytical studies are furnished to investor clients, in support of a Buy rating and a price target of $43.)

Brad Hill