A senior marketing executive for a major American retailer told us Pandora listeners light up social media in anger, complaining bitterly about hearing their ad over and over.
Let's look at why. According to the Nielsen Commspoint media planning platform, here’s what happens when you add media weight to Pandora:
The Pandora reach curve increases at first but then quickly flatlines. As Pandora spending increases, reach does not budge.
As you add media weight to AM/FM radio, reach keeps growing and growing. AM/FM radio is America’s number one mass reach media.
Pandora has a reach problem
The majority of Pandora’s listening comes from a very small number of people. According to Edison Research’s “Share of Ear” study, 5% of Americans represent 72% of Pandora listening. Spend a little money on Pandora, you quickly run out of new people to reach.
Pandora is fearful of revealing reach and frequency to advertisers
Pandora sells on impressions. They don't reveal campaign reach (the number of different people exposed by an ad campaign) or campaign frequency (the number of times people hear the ads).
Here’s what Pandora’s frequency curve looks like:
As spending increases on Pandora, frequency spikes. People hear the same ad repeatedly. No wonder Pandora listeners take to social media to complain to advertisers.
As you add media weight to AM/FM radio, frequency grows very gently. Expanded investment on AM/FM radio results in greater reach, not excessive frequency.
Pandora’s ad repetition problem will only get worse
Pandora’s audiences are dropping quickly. Edison Research’s “Share of Ear” shows Pandora’s 18-24 audience is down 26% over the last year. In order to hit their impression goals, Pandora will have only one choice: increase the number of times their listeners hear ads.
The takeaway for advertisers: Spend just a little bit on Pandora. Use AM/FM radio to grow reach and grow sales.
Scott Anekstein is Manager of Strategic Research at Cumulus | Westwood One.
Pierre Bouvard is Chief Insights Officer at Cumulus | Westwood One.
Contact the Insights team at CorpMarketing@westwoodone.com.