Pandora Media, the online radio service, has began selling and streaming commercials that only listeners in autos will be able to hear, creating a potential new revenue source. In a statement Pandora said that so far BP, Taco Bell, Ford Motor Co. and State Farm have signed on for the 15 and 30 second spots. The online radio firm is aiming for a piece of the $15 billion that local U.S. advertisers spend on radio ads. Pandora capabilities have been factory built into 130 vehicles and another 270 aftermarket devices since the service was introduced in 2010. Four million devices have been activated. Using Pandora, drivers can change stations, choose songs and skip tracks using the car's infotainment system.
"Nearly half of all radio listening takes place in the car," Simon Fleming-Wood, Pandora's chief marketing officer, said in the statement. "We knew early on that to redefine radio, we would need to seamlessly deliver Pandora through in-dash entertainment systems."
Pandora's stock price rose 14 percent to $31.49 on the news at the close in New York. The company also reported that listening hours in December rose to 1.58 billion from 1.49 billion the month before. Active listeners also rose from 72.4 million to 76.2 million.
Because the service is streamed online, Pandora can identify and target listeners better than conventional over the air radio. "This next partnership phase lets us effectively reach highly engaged customers where they are most likely to enjoy radio and is incredibly exciting for our business," Erica Bigley, Ford's digital marketing manager, was quoted in Pandora's statement.
Pandora's automotive audience will hear fewer ads than other listeners on the service and subscribers to the premium Pandora One service still won't hear any ads at all.
from The Truth About Cars http://www.thetruthaboutcars.com
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