It's been about a year since streaming-radio company Pandora went public at a valuation of $3 billion. Since then, the company has been pushing for a universal audience-measurement service tracking both traditional and internet radio -- arguing Pandora isn't getting the crack it deserves at the $14 billion local-radio ad market.
Tired of waiting for radio-audience-measurement standard Arbitron, Pandora has inked a deal with Triton Digital to report measurement metrics such as average-quarter-hour and cumulative audience for Pandora. The resulting numbers are impressive: On a national level, the Triton metrics show that Pandora is the largest radio network for listeners age 18 to 49 when the results are compared to traditional radio networks measured by Arbitron. Results in local markets show strong penetration as well. Pandora's ad revenue was $70.6 million in the most recent quarter, up 62% year over year. Total revenue was $80.8 million.
But media agency buyers surveyed by Ad Age , all of whom already do a good deal of business with Pandora, seem less impressed with what Pandora Chief Revenue Officer John Trimble trumpeted as a "game changer" in a recent interview. "The agencies and marketers are really looking for easy ways to compare both broadcast and digital radio," he said.
Though the buying execs said the numbers are good to have, they noted that alone won't lead to increased advertising on Pandora. Kevin Gallagher, exec VP-local activation for Starcom, said his agency continues to buy more with Pandora each year and that the lack of a unified measurement metric hasn't been an inhibitor.
"I don't know that we have had clients saying, "Because we don't have a common metric, we don't trust your judgment,'" he said. "I've been able to sell Pandora into clients because intuitively they know it's the right thing and know the audience is there."
Would measurement from Arbitron have a greater impact? Mr. Gallagher's response seems to imply that it would. "In a perfect world, all audio would be measured by the same source and the same panel," he said, "because then the ratings that we're getting would truly be apples to apples."
Coreen Gabler, U.S. director-local investment at PHD, said her research team is still analyzing Triton numbers to see if the agency even wants to use them in the campaign analysis it undertakes for its clients.
On an earnings call last week, Pandora CEO Joe Kennedy said that the Triton measurement eliminated the first of two hurdles in Pandora making significant inroads in the local-radio advertising market. "The second piece, integration into the systems that radio buyers use every day, is something we are actively working on and hope to have in place by the end of the year," he said.
What that integration entails exactly, Pandora will not say. But Lauren Russo, senior VP-managing director for audio at Horizon Media, said that because of "clunkiness" in the current buying process, a supervisor handles Pandora buys rather than a local-market buyer. "The Triton data is great," she said, "but if it was on the Arbitron platform it would make it lot easier to be handled by a local-market buyer."
She said that wouldn't necessarily push Horizon to spend more with Pandora, but a more-streamlined buying process certainly couldn't hurt.
So will agencies get what they're looking for from Arbitron? An Arbitron spokeswoman declined to make an executive available for interview, but directed a reporter to the transcript from a recent event at which an Arbitron exec essentially blamed the company's radio broadcast customers for the delay.
"[T]he broadcasters have to agree to participate, and by agreeing, that means they encode their content," the exec said, according to a transcript. "To participate in a digital service, they have to agree … to provide us log-file data. We have not reached the point where there's critical mass of customers providing the digital -- the log file data."
That still remains a mystery. Until then, it seems Pandora will continue to say that Triton gives it the validity it needs.