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.

New Pandora chief McAndrews was first Ad Age "Digital Exec of the Year"

Thursday, September 12, 2013 - 12:55pm

Pandora late yesterday announced the appointment of former Madrona Venture Group and Microsoft exec Brian McAndrews as CEO, president, and chairman. He immediately succeeds Joe Kennedy, who in March announced his intention to step down.

McAndrews was recognized as Advertising Age's very first "Digital Exectutive of the Year." He is also former president and CEO of digital agency aQuantive, which he led from its roots as a small Seattle-based firm in 1999 to its $6 billion acquisition by Microsoft in 2007. After the purchase, McAndrews stayed on as an SVP running Microsoft's Advertiser & Publisher Solutions group.

Pandora founder and chief strategy officer Tim Westergren commented, "No one better understands the intersection of technology and advertising, which he clearly demonstrated during aQuantive’s meteoric rise. He has a recognized ability to set strategy, lead large teams and drive growth and innovation at great scale. He is also a natural cultural fit with Pandora."

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.

Can iTunes Radio be a "Pandora-Killer?" Look to the comments section!

Tuesday, September 10, 2013 - 11:10am

Great wisdom and insight often comes from your readers (we're reminded of that almost daily). Today, a Digital Music News commenter very nicely summarized and aggregated seven advantages pundits believe the new Apple iTunes Radio service has over what will likely be its nearest competitor, Pandora.

The comment was posted to the news source's coverage of NPD Group consultant Russ Crupnik's own seven reasons why the new service may truly be a "Pandora-killer." Using the handle "Here Let Me Research It For Yo," the commenter (after a quick shot about "lazy insights") made good on her/his moniker, and offered relevant bits from sources like the Huffington Post, Rolling Stone,, The Wall Street Journal, and Apple itself.

Most of the points seem to involve how well the service should be integrated within the Apple ecosystem and customer base, but does include a point that "Pandora hasn't continued to innovate..."

See this commenter's round up of "7 Reasons Why Apple's 'Pandora Killer' May Actually Be a 'Pandora Killer'" here.

Pandora listening back to growth mode after mobile cap, summer slow-down

Friday, September 6, 2013 - 11:35am

Pandora yesterday reported it streamed 1.35 billion listener hours in August. That's a 16% increase from August of last year, and 5.5% higher than July 2013's 1.28 billion.

June ended a brief slide in the webcaster's total listening hours after it capped free mobile listening at 40 hours per month (Pandora announced last week that it is removing the cap.). Internet radio listening in general tends to slow in the warmer months as well. 

Pandora reported 72.1 million "active" listeners by the end of August, from last month's 71.2 million. That's also up 6.3% from August 2012.

Finally, the webcaster's share of total U.S. radio listening was just a shade under 7.5% in August. It reported a 7.08% share last month, and a 6.3% share after August of last year.

Pandora's press release with the figures is here. Our coverage of the July 2013 report is here., The Echo Nest to pit 80 million personalized Net radio channels against Pandora's service

Thursday, September 5, 2013 - 9:00am

The Next Web (via Hypebot) reports is transitioning each of the 80 million user-created playlists it hosts into "smart" online radio stations. And with them, says it will offer a "Pepsi Challenge"-style listening test to compare its new recommendation service to Pandora's artist stations.

RAIN readers may remember relaunched in July as a webcast service after telling listeners record labels "forced" it to abandon its on-demand, playlist-creating model (see our coverage here). is now working with music intelligence vendor The Echo Nest, which has taken each user playlist and created a custom radio station for it.

The service has a library of 20 million licensed songs, and offers 500 genre-based stations, in addition to the brand new playlist-generated streams.

Robert Davidorf, CEO, said, "We feel that Pandora is a little bit stagnant in [terms of features]...I think their service is not something that they’ve innovated on from a consumer standpoint very much in the past several years."

Read more in Hypebot here and The Next Web here.

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