There is a very interesting news piece in AdAge today, which states that Pandora Media Inc. is becoming so popular that it is struggling to sell all of the available time for advertising spots – which means it is actually losing money.
This is truly an interesting dilemma to be in: something so popular is becoming too popular to keep up with the demand for advertising time, something probably difficult to fathom for many ad execs in light of the down-turn in the traditional television and radio markets.
I found it very interesting that in the marketing industry, there was all this worry about the decline in advertising dollars being spent on traditional media, and the broadcasters were not sure about the annual “up fronts” being successful. Yet here I read that brands such as Anheuser-Busch, Taco Bell and The History Channel are running ads focusing on Pandora’s mobile users – very targeted – adding to the total marketing dollars spent on 2014 campaigns of $2.55 billion on mobile alone (more than double the current amount spent). This doesn’t seem like a downturn in advertising at all – just a little shift in the focus.
The article does point out that among the challenges Pandora must tackle are the increased licensing fees for rights to music; the increased competition looming from Apple and other tech companies who are venturing into the online music market (as well as Sirius XM Radio, Sacker Radio and Rdio Inc.); and the lack of a dedicated sales force for the local advertisers. It looks like they have a lot to focus on in order to turn their popularity into dollars.