Aug 30, 2012 at 02:49 PM
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Pandora Looks To Get More Local, A New Kind of Media Partner?

If you go onto Pandora you'll see some major marketing partnerships. The fast-growing, newly public online radio service has recently cut national marketing deals with the likes of Chase, Lexus and Wendy's. By the numbers, Pandora reported a 53% jump in advertising during the third quarter bringing its ad revenue to nearly $90 million.

While big partnerships are helping the company monetize, the big prize for Pandora may be cracking the nut on local radio advertising. According to execs, the company's goal is to disrupt the approximately $16 billion market for traditional (read: local) radio advertising with products that offer superior targeting, interactivity and measurability.

"We continue to make good progress in our development efforts to streamline the local ad buying process with the ultimate goal of making buying ads on Pandora as easy as buying traditional radio advertising," Chairman and CEO Joe Kennedy said. "We expect that we will complete integration into the most important radio advertising in media buying platform by the end of this year. Once integration is in place, we see tremendous opportunity for increased monetization and anticipate significant expansion of the number of markets in which we have a local presence."

At scale, Pandora's platform could provide a media juggernaut for marketers looking to engage music lovers at the local level. Over the past 12 months alone, active users for the service have increased 48% to nearly 55 million. Ultimately, Kennedy says the goal is to "make Pandora ad buying as easy as it is to buy your local FM radio station or your clear channel national network."

With enhanced targeting capabilities and the infrastructure to broker both local and national marketing partnerships, Pandora, Spotify, Sirius XM and others could soon be worth exploring as a new kind of media partner -- a viable alternative to the local TV or terrestrial radio station.