advertising

Pandora renews focus on ad revenue, names McAndrews new CEO

Thursday, September 12, 2013 - 12:55pm

There is an emphasis on advertising solutions this week.

Two days ago Songza closed a capital round of $4.7M for developing its “life moments” sponsorship platform. Yesterday Pandora announced its new CEO/Chairman appointment of Brian McAndrews to replace outgoing Joe Kennedy. Kennedy announced his intent to resign the company last March.

The selection sends a clear signal of Pandora’s intent to double down on monetization of its leadership position in Internet radio, so it’s no wonder that Pandora stock jumped nearly 10% this morning. McAndrews comes with a deep pedigree in digital advertising. As President and CEO of aQuantive, a digital marketing leader that was acquired by Microsoft in May, 2007, McAndrews became Redmond’s APS (Advertising and Publisher Solutions) lead. He comes to Pandora from a managing directorship at Madrona Venture Group, whose portfolio spans a wide range of Internet brands, from Amazon to Cheezburger.

One of McAndrews’ several board positions is at AppNexus, a major ad-buying platform whose CEO, Brian O’Kelley, is regarded as the inventor of ad exchanges. AppNexus executed $700M in advertising purchases in 2012, making it a competitor to Google. The company is rumored to be the next multi-billion dollar IPO.

McAndrews inherits Pandora as it owns leading share across markets (7.42% of total U.S. radio share), 72-million active users from a registered base of about 200-million, a relatively small music inventory of about a million tracks, proprietary recommendation and programming technology, some form of presence in over 100 car models, and a controversial attempt to reduce its statutory royalty payments to recording artists.

Songza raises $4.7M to forge ahead with ad solution program

Wednesday, September 11, 2013 - 9:20am

Internet radio service Songza completed a $4.7M round of private equity funding yesterday, almost exactly two years after receiving $2M in venture funds (as reported in CrunchBase). Yesterday’s commitment will be invested in scaling Songza’s native sponsoring platform, in which advertising creative is integrated into Songza “life moments” streams. (See Billboard's reporting here.)

Internet radio advertising lags the sophisticated user targeting of the web at large. If demographic ID is a brass ring, personal targeting is a holy grail. The most rudimentary network advertising on the web can accomplish the former, while browser-cookie placement and personal profiling can deliver startlingly individualized results. Targeting technology is what makes a user’s eyes widen in astonishment (and often alarm) when an ad pops up on Facebook that reflects browsing activity on external sites just a few minutes before, refined by an understanding of the user’s personal Facebook profile.

Internet radio ads generally convey a better sense of protected privacy, but in advertising, privacy equals cluelessness and reduced value. For users who don’t have knee-jerk reactions against targeted ads, irrelevant sponsor messages that interrupt an audio stream can seem all the more intrusive and annoying for their blindness. Recent tests of iHeartRadio (video pre-roll) and Pandora mobile (display pop-ups) betray some network buying at a low value to both the user and the advertiser. (Songza runs irrelevant ads, too.)

Songza’s specialty programming offers curated music streams targeted to common life situations, day parts, environments, and moods. The categories are often smartly thought-out; one at-work channel eliminates all lyrics (good for writers). It makes sense, and might even be pioneering, to evolve ad solutions that match the “life moments” of each stream, where the curation of sponsor messaging is pertinent to the user’s real-world circumstance. And since Songza offers registration via Facebook and Google+ (standard for many sites, but not all internet listening services), and requires access to the user’s personal profile, the second crucial part of holy-grail targeting is in place.

Songza isn’t mentioned as often as Pandora, Apple, and Spotify in industry coverage. But this round of capital funding could result in distinct revenue rewards, while providing a more personalized (if snoopish) consumer experience.

iTunes Radio will broaden iAd offerings to audio and video, so Apple's staffing up

Thursday, September 5, 2013 - 9:00am

Apple is reportedly beefing up its sales force as it expands its iAd mobile advertising network and readies its iTunes Radio webcasting service.

AdAge reports (hat-tip to Tom Taylor, who covers the story today in Tom Taylor now here) Apple posted want ads on its job board for five iAd-related jobs, plus another 35 to LinkedIn in August alone. Apple's job openings include account coordinators, ad design managers, project managers, and engineers to create new rich media ads for iAd. The company is also hiring ad execs with creative experience to work with advertisers and agencies to create better ads.

AdAge's coverage links to an eMarketer report from June projecting iAd U.S. revenue growth from $213 million this year to $376 million in 2014 and $623 million in 2015.

Apple will hold a special media event on Tuesday, reportedly to unveil two new iPhone models. Observers believe the new mobile operating system, iOS 7, will go live a week or so later, and with it, Apple's heralded iTunes Radio Internet radio service.

Read more in AdAge here.

Pandora shares tactics for successfully adding video ads to service

Wednesday, September 4, 2013 - 10:50am

"Two years after introducing video ads to its primarily audio-centric platform, Pandora believes it has found the right balance between user experience and brand objectives," reads a recent article in ClickZ.com. "And no video ad product would be complete today without an eye toward mobile and cross-platform distribution."

The news source suggests Pandora might provide a model for Facebook (and perhaps others) to follow when introducing video ads.

Pandora SVP Heidi Browning revealed that delivering video ads in an "unexpected" place, yet at a "natural break," (when the user engages with the player, like skipping a song or changing channels) was key for the webcaster. She says ad "completion rates" are "well above industry standard."

Read more of Pandora's insights on video advertising in ClickZ here.

MRC online audio ad standards at least a year away

Thursday, August 29, 2013 - 12:25pm

The Media Rating Council has begun the process of establishing standards of measuring impressions for streaming audio advertising, including that which takes place on Internet radio, according to MRC president George Ivie.

The MRC sets standards and conducts audits to validate audience measurement data. The group has already formulated standards for 15 other forms of digital advertising, and expects this project to take at least a year, according to coverage in Inside Radio.

"The MRC has so far accredited Triton Digital's reports that measure the volume of streaming and share reports. But its audience measurement figures aren't accredited, and Ivie says standards need to be built for the audience demographic data," says the news source.

Read more in Inside Radio here.

Profit may not be Apple's goal for iTunes Radio, but it wasn't for the iTunes Store either

Monday, August 26, 2013 - 11:05am

Given the high cost of operation and mounting losses of industry leader Pandora, analysts have suggested that Apple's intention with iTunes Radio isn't about profit -- (it may not even be about Internet radio at all).

"It’s about keeping its users from other Internet radio products," wrote Minyanville.com's Diane Bullock. "If Apple can provide this in-demand service to its iOS faithful, they won’t be tempted to stray and find themselves in the open and exciting arms of threateningly hip startups. Being all things digital means the cult of Mac won’t have to worry about defectors bolting for the door."

Consider: most potential listeners already have an iTunes account. The new service will be preinstalled on iPhones and iPads with iOS 7, iTunes for OS X and Windows, and Apple TV. And if a listener is signed in and ready-to-go, why launch another app to listen to Net radio? 

You may remember that the iTunes store itself had "break even" as a goal in 2003, and was launched to help sell iPods. After just five years, the store became the the leading U.S. music vendor. It now accounts for 64% of the world's online music sales, generating 15% profit on sales of $13.5 billion.

For the Internet radio product, Apple may have already laid the groundwork for some nice revenue. With blue-chip advertisers lined up before the service even launches, some paying tens of millions for year-long ad campaigns (see RAIN here), Apple may indeed end up exceeding expectations. They've done it before.

Read the Minyanville piece here.

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