Pandora announced at CES 2014 that they will be advertising on their in-vehicle radio service. Over half of the music that is listened to is listened to in the car, and Pandora is looking to increase revenue by providing more targeted advertising to their media partners. Currently, customers who have Pandora built-in to their vehicle can listen to their music commercial-free. With this new partnership, that will soon change.
For those who listen to iTunes Radio but do not pay for iTunes Match, there are commercials placed strategically every three or four songs in to subsidize the free content. Presumably, the Pandora advertising will be similar. Since Pandora knows that these listeners are in the car, advertisers can better target their advertising for maximum profitability.
READ: How To Use iTunes Radio
Pandora’s Chief Marketing Officer, Simon Fleming-Wood, believes this is a good move for the company. “With an 8.60% share of total U.S. radio listening and unmatched growth and adoption of Pandora in the car, we are now seizing the opportunity to connect advertisers with a more targeted audience than traditional radio can provide,” Fleming-Wood stated.
As with iTunes Radio, Pandora subscribers who pay for Pandora One will be able to continue listening to music without the interruption of commercials.
It is surprising that Pandora hasn’t been advertising in the vehicle yet, because streaming music does not come free to the company. If the commercials stay under 30 seconds and are not doubled up they way they are on regular radio, it might not be that intrusive. It will be interesting to see how users respond.