Pandora's Insider's Guide to Digital Audio Drives Growth for Local Businesses

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There is something compelling about audio. It commands attention, offering an intimate experience to the listener in an uncluttered environment. For Liz Lacey, vice president of sales marketing for Pandora, audio works especially well for all sizes of advertisers from small to medium to large. "Small and medium size businesses often don't think of audio," she noted, "They immediately go to search and social. They think audio is hard. They don't really know where to start. Our goal is to make audio accessible, give them the tools that they need and make them feel confident that they can incorporate an audio strategy to complement their social and search campaigns."

Pandora's Insider's Guide to Digital Audio for Local Business

To that end, Pandora has created a local advertising eBook, which, Lacey explained, "talks about the advantages that audio can bring to the table: an uncluttered environment, ads that are served one at a time and adjacency to brand safe content. It also talks about the differences against other tools such as social, search and even broadcast radio." The book is part of a larger strategy by Pandora and serves as an evergreen marketing material for digital audio and internet radio for local businesses.

In short, Pandora offers advertisers, "audio ads at scale, tapping into the power of Pandora's logged-in user base which reaches 150 million users with the flexibility to target however you need to. Streaming audio's flexibility, intimate storytelling ability, and targetability takes center stage for business looking to reach local audiences efficiently. In today's challenging times, small and local businesses need to be able to adjust their messaging based on the changing dynamics of their local market. With streaming audio, local advertisers can easily swap out audio ads working with Pandora and our Studio Resonate creative team."

Impact of the Pandemic

The impact of the pandemic especially on small businesses has been profound. According to Lacey, "In March we saw many advertisers, not only small and medium businesses, put a pause on their campaigns. But we did see that audio—because of its ability to be more agile and cost less to produce versus a TV spot—come back pretty quickly in the second quarter. We spent a lot of time this year educating businesses both large and small about how streaming audio can be an effective solution to engage their customers by adjusting their media and messaging strategies to meet the mindset and behavior of the consumer in their current state."

Research has backed up all of these efforts through the use of Soundboard, Pandora's 75,000 listener panel of users who have opted in to allow Pandora to poll their insights and behaviors. "Starting in March, we launched a multiple wave study to understand how our listeners feel and what they want from brands, what is working and not working and used that as an opportunity to talk to our advertisers to guide them on how they can use audio," she explained and added that there has been growth for advertisers using audio during the pandemic because of the medium's agility, flexibility and efficiency.

Digital Audio Advertising Components

Perhaps one of the most innovative aspects of Pandora's data gathering is the ability to personalize at scale. "When we use our dynamic ad product which allows us to use different data signals to personalize a message based on different scenarios, we can build many different iterations to support a single creative idea," she stated. It starts with understanding the consumer, and Pandora's ability to reach these audiences at scale. "We collect billions of data points daily on our listeners—whether brand's want to bring their own first party data to append to Pandora's massive data set or use Pandora's robust first party data for turnkey targeting solutions, advertisers can reach the right consumer, in the right environment, and in the right mindset and mood (of the listener)."

A billion data points begs the question, what data is collected and what metrics are used to measure? When users register on Pandora their behaviors are bucketed into three categories—declared, observed, and inferred audience data. Declared are attributes such as email, age, gender, and zip code. Observed is learning based on the user's interactions with the interface, including stations, songs, artists, genres, or music engagements (i.e., thumbs, skips, replays, etc.) Lastly, inferred data is what's inferred about the user based on their technographic (device), geo data, and behavioral (i.e., ethnicity, HHI, political leanings, parents, students, etc.) "We can then offer advertisers 2,000+ pre-set audiences that are already developed based on all of the data we ingest and analyze," Lacey stated. With metrics and measurement, "We do everything from website pixel tracking to measure lower funnel direct response metrics such as site traffic and conversion," she noted, to "branding and awareness. We are leading the charge in the industry around audibility, working closely with Moat by Oracle Data Cloud, our first party measurement partner, to test Audibility measurement and reporting aligned to the 2-second MRC standard. Pandora has been investing in research with one main goal in mind: create holistic audio measurement capabilities to help advertisers better analyze the effectiveness of the audible impression."

Pandora boasts something called Intelligent Ad Delivery which is "an ad delivery system that allows us to know when it is best to serve an ad in the right moment by taking into account an individual listener's behavior with the platform." Additionally, Ad load is relatively uncluttered compared to terrestrial radio with only one to two messages per pod compared to as much as a block of eight ads.

The Value of Digital Audio

"Audio is interesting because it reaches audiences that are not necessarily consuming traditional media, which is our position when we talk to advertising partners who might be going heavy into television and AM/FM broadcast radio," she explained, "If you are trying to reach a younger audience you need streaming audio as a supplement to achieve that audience reach." And when it comes to advertisers who rely on social and search, digital audio adds amplification of the message. "You can grow awareness, increase consideration and boost results," she concluded.

Click here to download The Insider's Guide to Digital Audio for Local Business.

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