Marketing and Advertising on the Net

Launching in 2000, Pandora and its technology, the Music Genome Project, have been consistently delivering music to its loyal fans. Pandora calls the Music Genome Project the most comprehensive analysis of music ever undertaken. Musical analysts at Pandora mine through music, one song at a time, to collect the intricate musical details that go into every song. These characteristics include molody, harmony, instrumentation, rhythm, vocals, lyrics and more (they say close to 400 attributes).

This intuitive project begins when a user enters a song or artist they enjoy. The program responds by playing the specific song or one by the author followed by selections that are musically similar. If the user approves, a new song begins once the previous one ends. If, however, the selection is not a match, the user has the capability to disapprove and begin a new song. This disapproval also serves to direct Pandora in making future selections. One great feature of Pandora is its mobility. Once users create an account their stations follow them anywhere. With any computer a user can log on and have their personalized stations right there ready to stream.

To generate revenue, Pandora offers two subscription plans: a free version, which is supported by advertisements as well as a fee-based plan that does not contain ads. For users browsing on their mobile phones, Pandora offers “Pandora Mobile”. Additionally, while listening users have the ability to buy the songs or albums they are listening to through Amazon.com or the iTunes Store. Pandora subscriptions are $36 for a one-year plan.

Ads shown on Pandora are not generic and offer the advertising customers a platform to brand themselves with the station playing. Pandora aims to tailor the whole user experience around the advertisement being shown. Rotating along with songs, these targeted ads transform the whole page with attractive branded skins changing as the user switches station. These brand-sponsored radio stations are appealing mostly because they look good. Users tend to spend very little time actually looking around the site once they have settled on a station or song, which is why a branded skin might have a better effect – making the user take notice when the station and screen change together.

A successful feature that some companies have jumped into is to actually offer suggestions to music listeners. Along with a branded skin, ads which feature TV shows or products will have a “mix track” station users can add to their own featuring music from the television show or tunes related to the product. This has had a pretty good success as users find it a good way to explore new music. I found numerous blog posts raving about this new feature: advertising as a service. Connecting user activity with an advertising message in a useful way really engages customers. This is especially important in an era where people are becoming increasingly weary of advertisements, especially those that disrupt their experience.

Pandora ad

This point moves me on to Pandora’s next and newest advertising feature: audio ads. As a result of the rising cost of royalty fees for Internet radio companies, Pandora has begun introducing audio ads. These ads are played sporadically during the user experience, but only about 15 seconds for every two hours of listening. Some Pandora fans find this problematic as many are initially attracted to the project for its lack of advertising.

Performance metrics Pandora can use to measure their success using an advertising model can measure not only the quantity of users listening, but also the genres they listen to, stations they create, and time spent browsing the site. Measurements can also be made to gauge how Pandora is doing with the Music Genome Project, predicting music based on the attributes they assign to artists and songs. With the approve/disapprove feature, Pandora can determine how frequently users approve of the music or whether they spend more time skipping to the next song or station. This is useful for Pandora to determine what users want, how satisfied they are, and perhaps how to better tailor their offering to users listening to certain genres. It seems as Pandora grows, their ability to target customers with specific songs and artists will grow as well.

It seems that Pandora users are pretty loyal. A lot of users I know live by the program when they are browsing the Internet or using their computer for long periods of time. Personally, I use Pandora when I don’t want to browse through my own music to listen. It’s a great program to discover new artists and I think loyal fans will continue to use the project even with audio ad disruptions. 15 seconds for 2 hours of listening is a small price to pay for free streaming music. For extremely loyal fans that cannot deal with ads, Pandora has a subscription option. This option is good to have because it seems users who are passionately anti-ad are probably devoted enough to purchase a subscription plan anyway.