Pandora chief targeting local radio ad sales


Selling local advertising in competition with FM radio stations is now a regular topic for Pandora Media CEO Joe Kennedy. He had plenty to say about the Internet streaming company’s on-going expansion of its national and local ad sales force as he spoke Wednesday (1/4) to the Citi Entertainment, Media and Telecommunications Conference in San Francisco.

To hear Kennedy speak, you’d assume that AM radio no longer exists. He talks repeatedly of the market share of FM radio and how Pandora is moving to take share from FM – both in terms of listeners and ad dollars. The streaming company claims to already have 4.3% of “radio” listening, although people in the radio industry dispute Pandora’s claim that its custom research is equivalent to Arbitron data.

Kennedy told the conference that Pandora is focused on getting ad buys that had traditionally gone to radio, both at the national and local level, and not just growing its business in the digital media advertising space. Asked specifically about growing the local ad sales force, Kennedy had this to say:

“We’re going through a pretty significant ramp right now in terms of the radio ad sales – both the local radio ad sales force and the national radio ad sales force. And that’s really a function of our share. We think about our share, that 4.3% share that I mentioned, what does it mean to a radio ad buyer? At 4.3% share nationally we have about 4.3% share in every local ad market in the country. That makes us already one of the largest radio stations in each market in the country. A year ago when our share was 2.1% we were a small to medium sized radio station to a local radio ad buyer, so not all that relevant. So we are really going through an inflection point with our share growth, in terms of our relevance to radio ad buyers. Locally, where we expect soon to be larger than the largest AM or FM radio station [yes, he did mention AM this once] in most markets in the country – highly relevant on a local basis compared to existing AM and FM radio stations – and also on a national basis, based on our analysis, we are already the third largest radio ad network available to advertisers in terms of the 18-49 demographic.”

Kennedy later had this to say about radio’s share versus Pandora:

“If you look at Arbitron data overall time spent with radio has begun to diminish and that does correspond with the period in which our share has grown quite significantly. And so we see that as imperfect, but nonetheless evidence of our thesis that most of our growth in share in consumer time spent will come out of FM radio.”

RBR-TVBR observation: Is it happening? Are you seeing any local ad buys in your market that include Pandora? We welcome your comments below.

Note: Coming soon from RBR/TVBR – Look for a focused/key Consumer Retail Report: Internet Radio, iHeart vs Pandora. One fact in RBR-TVBR consumer retail research findings – Pandora is not going to go away.