Pandora set out to disrupt traditional radio. But it's finding out it needs to be measured like radio if it wants to tap radio ad budgets.
Pandora: Until We're Measured Like Radio We Won't Get Our Fair Share of Ad Dollars
Pandora founder Tim Westergren raised the issue following a presentation to ad execs at Horizon Media on Thursday, arguing that a universal metric is necessary to measure the audience of traditional and internet radio networks. "It's really absurd there's not an apples-to-apples" comparison, he said.
Pandora reported total revenue of $203 million in the 12 months ending July 31, with advertising revenue comprising $176 million of the total. But the company, which says it owns nearly 4% radio market share in the U.S., thinks it deserves a bigger piece of the $17 billion spent last year on radio advertising.
Asked if the lack of a universal metric was a challenge for Pandora's ad-selling efforts, Mr. Westergren replied: "To put it mildly."
Pandora's Chief Revenue Officer John Trimble implied that some big traditional radio networks are against a universal metric. He said he is working with the major audience-measurement firms to get something done as soon as possible.
Paul Krasinski, senior VP-digital media at audience measurement company Arbitron, says his company will roll out a service called Arbitron Digital next year that "will combine over the air and streaming measurement to provide a holistic look at audio consumption across devices, channels and platforms," he wrote in an email.
Without it, Pandora has been doing manual calculations to turn unique visitors and time spent into traditional-radio metrics such as average quarterly hour, Mr. Trimble said.
"It's been a bit of an inhibitor for us," he said.