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Wizard of Ads

Why You Dont Need To Worry About Pandora

11-4-2013

Let me say for the record that I like Pandora. I like the concept. I like the product. I like my Pandora sales rep. But Pandora will never be a threat to the AM/FM band.

It takes me a little longer to see the obvious than it takes the average person, but I think Ive finally achieved clarity on this whole Pandora thing.

Pandora is different from traditional radio.

This is the part thats scary:
1. Pandora isnt broadcasting; its unicasting. Everyone has their own personal radio station with their own private playlist.
2. Theres never a moment when two listeners are hearing the same ad simultaneously. Pandora plays ads for one listener at a time. And they play those ads only when a specifically targeted listener is listening.
3. This is why Pandora has no dayparts. They know when youre listening and when youre not. Their servers know whether or not youre logged in.
4. This means Pandora never has to estimate the size of its audience. Not only do they know when youre listening, they also know your street address, your birthday, and your dogs name. Pandora is Internet, remember?
5. You want to talk about targeting? Really? Are you sure? Pandora can sell me an audience that is 100 percent female or 100 percent male, in any ZIP code I can name, and in any age bracket I can conjure. If I want to reach women between the ages of 41 and 47 in a specific ZIP code, Pandora can do that for me. Can you?
6. The astounding lack of commercial clutter means radio ads require less repetition on Pandora than on traditional radio stations. I know this because Ive been experimenting with Pandora schedules for the past several months in cities across the nation.
7. Buying Pandora is like buying direct mail. The Post Office doesnt negotiate the price of stamps and Pandora doesnt negotiate their cost per 1,000 impressions. Pay it or someone else will.
8. The reason they can hold the line on rates is because they play a maximum of three minutes of ads per hour.

That, my friend, is why youll never have to worry about Pandora.

Think of it this way: Your town has one more radio station, and its called Pandora. Theyre sold out when they sell three minutes per hour. Thats all the inventory theyve got. Its a great product, but there will never be enough inventory to go around. Pandora is on its way to continually being sold out. I suspect that soon theyll be auctioning inventory, exactly like Google auctions its AdWords. How high are you willing to go to be certain your ads get played? Log in and place your bid.

The higher Pandoras CPM rises, the more affordable your inventory appears. I know this probably sounds insane, but I honestly think the accidental effect of Pandora will be to help AM and FM stations raise their rates.

The good news is that Pandora will never be a problem. Its just one more radio station in your town, and they sell only three minutes of ads per hour.

The bad news is that Pandora wont be the only successful online radio station. Apple is now in the game, and I suspect that Google and Amazon.com wont be far behind.

Hang on, kids. Its going to be a wild, wild ride.

Roy H. Williams is president of Wizard of Ads Inc. E-mail: roy@wizardofads.com.




(5/5/2014 2:48:12 AM)
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- mbt shoes london
(11/19/2013 1:42:19 PM)
Here is the reality: Radio is being faced with more and more competition for the attention and time of consumption. Many stations will fail and will go dark or if the FCC relaxes, be absorbed by more efficient broadcasters. Be creative, be relevant, be efficient or be gone.

- Daniel P. Mitchell
(11/5/2013 10:13:51 AM)
Wiz--do your homework. Pandora plays more than 3 ads per hour (just listen), they also have video ads and they also have digital-only ads (no audio) ads....they work.
So I don't think they are going to "sell out" anytime soon

- Jerry
(11/5/2013 10:09:41 AM)

- Jerry
(11/4/2013 7:09:32 PM)
What WAS telling were the responses from radio-folk to Pandora's successful insertion into the media mix.

Radio people were scurrying around and climbing for the rafters as if a rabid dog had just crashed the party.

Hunter S. Thompson had already described the position as one of "fear and loathing".

- Ronald T. Robinson

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