Now Pandora is pitching ad buyers on two audience segments it's
assembled exactly that way, one for Hispanic listeners and another
for Spanish speakers in particular.
The Internet radio company -- which counts more than 200 million
registered users and 70.9 million monthly active listeners --
stocks up on first-party data by collecting an individual's age,
gender and zip code information when someone signs up for the
Recently Pandora began digging into that registered user data to
mine specific audience segments that are similar to the
cookie-based ones to which online display advertisers have grown
Late last month Pandora finalized the first two of these
proprietary audience segments -- one for Hispanic listeners and a
sub-segment of Spanish-speaking listeners -- and has been pitching
these audience targets to agencies over the last few weeks. The
initial ads aimed at those listeners will roll out "as soon as we
get [deals] signed," said Pandora's director of product management
The new targeting options are "a lot more robust than what we
see on the [AM/FM radio] side. It's pretty significant what they're
doing," said Horizon Media senior VP and managing director
of audio and promotions Lauren Russo.
Previously to target specific audience segments like Hispanic or
affluent listeners on Pandora advertisers had to rely on
cookie-based data collected by third-party companies. However,
unlike the new segments based on Pandora's first-party data, those
third-party cookies didn't work for ad targeting in Pandora's
mobile apps and were used mostly for display ads, Mr. Krawczyk
said. Of the
$128.5 million Pandora recorded in second-quarter advertising
revenue, 70% came from mobile, and audio ads eclipsed display
ads by accounting for 60% of ad revenue.
Cookie-based targeting is also problematic because it isn't
always accurate. For example, using cookies to track someone's web
browsing behavior could infer that someone visiting sites for The
New Yorker, Wall Street Journal and New York Post is an affluent
New Yorker. But maybe that person is a well-read but broke New York
Pandora's proprietary audience segments are similarly based on
inference but substantiated by the service's first-party registered
user data. To create the first two sub-categories, the company
cross-referenced its registered user data with U.S. census data
(i.e. publicly available first-party government data) to identify
zip codes with high populations of Hispanic and Spanish-speaking
people and ran tests overlaying the two data sets to infer which
listeners fit into those buckets. Mr. Krawczyk said Pandora's
proprietary Hispanic and Spanish-speaking listener segments proved
to be at least 10% more accurate than those created based on
Pandora aims to add two new segments every four to six weeks,
depending on how quickly it can access and assess the data needed
to model those listener groups, Mr. Krawczyk said. The next batch
will surface listeners with high-household incomes through the
combination of census data and registered user information.
Pandora doesn't plan to always limit itself to publicly
available data to infer audience segments. To identify which
listeners are most likely play video games, Pandora surveyed "tens
of thousands of users," Mr Krawczyk said, and discovered that group
to dovetail with men aged 18 to 34 years old who listen to
Pandora is also looking into how it can derive such segments
from its own data. In one example Mr. Krawczyk laid out, the
company could peg people as parents based on their age and whether
they listen to a children's music station and then factor in how
long it has been since they last listened to that station to infer
the child's age.
The immediate aim is to take advantage of Pandora's first-party
data to better target ads on the streaming music service, but Mr.
Krawcyzk didn't dismiss the possibility of using the data to target
ads on others' sites or apps.
"It's reasonable to infer we would be interested in applying
what we know about logged-in users across a network of services.
However we wouldn't approach doing that until all the right privacy
measures were in place," he said.