Introduction
Pandora is the largest ad-supported streaming audio platform in the U.S. Since its 2005 launch, it has been one of the nation’s preeminent platforms to access music and podcasts. Pandora’s proprietary recommendation tools, the Music Genome Project and Podcast Genome Project, have galvanized listenership and enhanced the user experience. The tools analyze more than 450 attributes used to describe songs and podcasts, turning that data into relevant listening recommendations.
Pandora’s active monthly listener base of more than 47 million users grew slightly in 2023. As one of the oldest and most recognized names in streaming audio, Pandora continues to evolve to serve its user base, offering both premium and free, ad-supported tiers.
In recent years, Pandora’s revenue has grown as the audio advertising market expands. Serving an average of three audio ads per hour, Pandora recorded $1.5 billion in advertising revenue in fiscal 2022. Music streaming services will continue expanding at an estimated annual growth rate of 7.08% through 2027. As one of the market’s top five streaming services, Pandora is on track to expand its reach along with the industry, offering advertisers a useful point of connection with their most qualified audiences.
Understanding Pandora’s audience
The average Pandora user spends a lot of time on the platform—in fact, most users log about 2.25 hours with Pandora every day. Of those listeners, 46.35% identify as female, and 53.65% as male. Listeners skew young; the largest age group is 25- to 34-years-olds, representing 24.33% of all users. Pandora has 250 million registered users and 7.4 million paid subscribers, with 97% of users opting for its ad-supported tier.
Other audio platforms include Spotify, which has the highest number of regular listeners, including 29% who reside in Europe and 40% who are premium users who do not receive ads. SoundCloud is another listening option. It is growing quickly with 130 million users, most of whom live in the U.S. (28%). Known for its vast catalog of independent creators, SoundCloud and its targeting capabilities are evolving. Apple Music is also a popular platform and currently has 88 million subscribers, primarily in the U.S.
Types of Pandora ads
Pandora offers a variety of advertising options for brands ready to capitalize on audio’s high level of engagement. Audio advertising can be complementary to any campaign, delivering highly targeted messages with high conversion rates. Different ad types work well at different parts of the sales funnel, helping round out media plans.
Pandora’s ad types include:
Pandora Audio Ads: Similar to ads on terrestrial radio, Pandora Audio ads are 10, 15, or 30 seconds long. They are available with or without accompanying visual advertising. Users can’t skip or fast-forward through these ads, guaranteeing that they are heard.
Pandora Display Ads: Display ads on Pandora include traditional banner ads and web skins for desktop users or mobile ads delivered in-app. Mobile ads include non-responsive options (wherein the ad replaces the album art on-screen) or responsive, which have multiple touch points that send users to different landing pages that are relevant to them.
Pandora Video Ads: Pandora shows ads to app users who are engaged, looking for cues like skipping songs or scrolling through radio stations. At this point, Pandora will serve a video ad in the form of a banner. Pandora also offers alternatives to video banner ads in a reward-based format, wherein a user is offered the ability to skip songs in exchange for watching an ad.
Pandora Branded Stations: Branded radio stations offer a native format in which brands act as curators and producers to deliver content from an array of musicians. These stations can include ads, spoken word content, music, and anything else relevant. Branded stations appear as recommendations within station lists, so users see them along with their existing stations.
Pandora Sponsored Stations: Pandora’s sponsored stations give brands an opportunity to choose specific stations aligned with their targeting goals and own half of all ad space delivered on those stations.
Pandora Artist Programs: Pandora’s artist program, called AMP, allows artists to engage with listeners through a suite of tools including audio messages, featured tracks, and the storytelling capabilities of podcasting. Brands can align themselves with specific artists by supporting these channels.
Pandora Genre Station Sponsorship: Typically initiated over a designated period of time, genre station sponsorships allows brands to identify distinct genres and show users tuning into those stations banner ads and web skins for their product or service. During these “takeovers,'' the sponsoring brand also delivers audio ads.
Pandora Animated Overlay: Designed for large screens, animated overlays are visual audio ads that include animation or static images.
Pandora Autoplay Video: Autoplay videos are delivered as listeners move from one station to the next or skip a song. When they begin engaging with the program, the video will play automatically.
Pandora Mixtape: Brands can submit a curated selection of songs to Pandora or ask users to submit their own songs to the mixtape. The mixtape reinforces the company’s brand with imagery pinned to the screen throughout the listening experience.
Pandora Welcome Interstitial: This type of display ad is delivered to users when they open the app on their phone, taking advantage of a moment of engagement to deliver a full-screen ad experience.
Pandora One Trial Sponsorship: Brands can offer a trial sponsorship of the ad-free Pandora Premium as a gift to their listeners, providing a code for a free seven-day trial. This allows the brand to measure engagement and completely own any display ads delivered during the trial period.
How to start advertising on Pandora
Pandora has demonstrated strength and staying power in the world of streaming audio, making it a viable platform for advertisers to invest in to grow brand awareness and reach qualified audiences.
To start reaping the benefits of Pandora’s audio advertising opportunities, brands must take several key steps. Getting started requires:
- Setting up a Pandora advertising account
- Reviewing Pandora’s advertising kit
- Contacting a Pandora representative
- Determining demographics for targeting
- Potentially partnering with an agency to plan and deliver high-performing campaigns with demonstrable ROI. Contact an audio advertising expert at ARM to get the most out of your ad dollars.
How much do Pandora ads cost?
The cost of advertising on Pandora varies tremendously. Costs are determined by frequency of delivery, breadth of advertising campaigns, types of ads, and targeting options. Final costs take into account ad relevance, user experience, and delivery.
Pandora’s CPMs are competitive with other platforms and have a wide range relative to the ad parameters of the media buy, making the platform especially viable for brands with a limited budget or those just testing the audio waters. Audio advertising on Pandora offers options for brands to launch audio campaigns that are highly targeted and strategic, reaching the right listeners at the right moment at a cost in line with budget.
Are Pandora ads effective?
With its large number of U.S.-based listeners, Pandora is a very effective platform for brands to integrate into their media strategy. Most users opt for Pandora’s free, ad-supported tier, providing many opportunities for your brand’s message to connect.
Generally speaking, targeting and measurement capabilities are standard among most audio platforms in the market. Although Pandora emphasizes music, they also have many original podcasts as well as podcasts produced by other publishers that can be accessed there. To maximize performance, ARM suggests leveraging multiple platforms to ensure maximum reach and engagement.
When considering investing in advertising on Pandora versus other spaces, it is vital to think through who you are targeting and how your audience engages with various platforms. Those insights should guide you to the platform that most closely aligns with your target audience’s listening habits.
Best practices for advertising on Pandora
Audio advertising can be a wonderful complement to the advertising channels your brand already uses. Audio can even play a role throughout the entire funnel, from initial stages of awareness and brand building all the way through to conversion. Capitalizing on audio’s potential requires following best practices, which start with strategizing effectively.
Identifying specific goals ahead of launching an audio campaign can help you measure its success. Brands should also dedicate the appropriate budget to effectively test depth and breadth, including different types of creative and messaging.
Refined targeting is one of the most compelling reasons for advertisers to invest in streaming audio. Pandora facilitates precise targeting through an array of niche podcasts, stations, and listening options. Pandora has extensive high-quality inventory that can deliver creative to the right demographics without compromising on scale, ensuring that your ads are shown to qualified audiences likely to convert.
Creative is key, especially when running audio ads. Brands are challenged to communicate a lot without the help of visual aids. Keeping messaging clear and concise, while also attention-grabbing, is crucial to create memorability. Working with partners in the audio space that have an extensive knowledge of what makes for impactful creative can accelerate the path to success by eliminating the guesswork.
Lastly, appropriate measurement strategies that guide optimization throughout campaign delivery are crucial to getting ROI on every investment. Make sure to integrate a variety of measurement tactics and tools into your campaign or partner with an agency that can leverage these for you. Measurement strategies might include promo codes, vanity URLs, surveys, and pixel-based attribution. Use a variety to get a comprehensive view of performance, make tweaks as necessary, and maximize returns.
Turn to the experts
ARM specializes in all things audio, partnering with brands that want to leverage the distinct opportunities available in podcasting, streaming audio, vodcasts, and radio to move closer to their goals. For more than 25 years, we’ve built relationships in this space and cultivated expertise that helps us deliver campaigns that hit every mark.
From identifying opportunities and fine-tuning targeting to developing on-point creative and precisely measuring performance, we are true partners throughout the process. We make sure you’re heard on air—and we listen to your needs along the way. Let’s get started.
