Pandora says study indicates its listeners more receptive to ads than on AM/FM

Paul Maloney
November 16, 2012 - 11:00am

Pandora has published a white paper based on testing it says shows radio listeners are significantly more receptive to advertising presented on Pandora (or in similar environments) than on AM/FM radio.

This "receptivity" is enhanced, Pandora says, because listeners have come to have more overall positive feelings towards services like Pandora compared to AM/FM radio.

Study subjects (800 adults, age 18-49) listened to 15 minutes of either simulated AM/FM programming or Pandora radio in the genre of their choice. The programming contained ads presented as they would be on the respective media (that is, a single isolated ad on Pandora, and the same ad but within a multi-unit stopset, on the simulated broadcast).

"When compared to AM/FM radio, the research indicates that internet radio, and Pandora specifically, has been highly successful in establishing an even more positive – and more personal – relationship with listeners. Listeners are far more likely to feel Pandora is innovative, provides a great experience, and even contributes to the happiness of their day-to-day lives," the paper reads. This results in what Pandora calls "better ad receptivity... with engaged listeners tuning in to the ads and feeling positively toward the advertisers."

Pandora worked with a marketing/brand development consultant called Added Value to produce the study. The paper is titled "Personalization and music discovery ignite passion for Internet radio."

While more respondents overall could remember hearing some kind of ad on AM/FM radio (potentially a negative impression), Pandora listeners who recalled hearing an ad while listening were "70% more likely than AM/FM radio listeners to correctly recall the brand" that was advertised. And more of the Pandora listeners said they "noticed (the ad) more" and "(the ad) got my attention" than did the AM/FM listeners in the test.

The paper is now available on Pandora's site here.

RAIN Analysis: It makes sense that there could be more benefit to an advertiser in having a :15 (or :30) spot in a single-unit stopset than in having a longer spot in the middle of a five- or six-unit stopset.

One would think that continued evidence of this would eventually allow Pandora, Slacker, iHeartRadio's custom radio, CBS-owned Last.fm, and other Interet-only offerings created by broadcasters to command premium CPMs. -- KH

Paul Maloney
November 16, 2012 - 11:00am

Opponents of the Internet Radio Fairness Act have a new ally: conservative activist Grover Norquist.

While he complains that the IRFA-proposed move to the "801(b)" standard for Net radio royalty-setting "moves... towards forced below market rates," he's not fan of the status quo either. In a letter to Senate and House Judiciary Members, Norquist gets a shot in at the "willing buyer willing seller standard," when he writes, "There is no way, ultimately, for a legislator to decide what the fair market value of a product or service is."

The 1998 Digital Millennium Copyright Act stipulated that judges determining webcasting royalties attempt to determine the fair market value of music based on what they believe a "willing buyer" and "willing seller" would agree to. Mandating this standard was a significant departure from the more commonly used "801(b)" standard, used for satellite and cable radio (among other applications). The IRFA would move webcasting royalty determinations to 801(b), which supporters say more accurately reflects the public policy goal of copyright law, as it requires judges to make decisions that maximize the availability of creative works to the public, using the concept of "fairness" for both creators and distributors.

"Both the existing and proposed models pick winners and losers, rather than allowing free market negotiations," he wrote.

His call for a completely open market for negotiations between copyright owners and services actually exists: any copyright owner and any service can negotiate individual deals. The "government intervention" against which Norquist rails comes into play only after sides fail to reach terms for an "industry wide" rate.

Read Norquist's letter here. More coverage in The Hill here. H/T to the Digital Libery blog here.

Paul Maloney
November 16, 2012 - 11:00am

Streaming aggregator and tuning service and app maker TuneIn reports on some holiday-related listener research it's done.

TuneIn says Bing Crosby is the most searched-for holiday artist among its 40 million monthly active listeners, followed by Nat King Cole, Johnny Mathis, Frank Sinatra, and Andy Williams.

Crosby's "White Christmas" is the most searched-for holiday song on TuneIn, topping "All I Want For Christmas (Is You)," "The Christmas Song," "Let It Snow," and "Blue Christmas."

Probably not a surprise, TuneIn says holiday music listening is heaviest in the U.S. and Canada -- but ranks Japan third! In the U.S., Pennsylvania, Ohio, and Michigan show the more holiday music streaming than any other states.

TuneIn has created a special directory (here) for listeners to sample various services' holiday offerings.

Paul Maloney
November 16, 2012 - 11:00am

The Radio Advertising Bureau reports digital revenue for broadcasters was up 8% in Q3 2012, a gain of 7% for the year's first three quarters.

"Off-Air" revenues were up slightly, spot revenue was flat for the period (see chart below).

RAB President and CEO Erica Farber said, "It’s most encouraging that advertisers are taking advantage of expanding digital opportunities offered by stations... These expanding platforms afford Radio broadcasters additional avenues to bolster Radio’s growth."

Read the RAB's press release here.