Late last year, with a handful of existing brand clients, Pandora started testing a product called Video Plus, which rewards viewers with song replays and the ability to skip tunes in exchange for their ad views. Today, the music streamer’s marketing product is rolling out widely with T-Mobile as one of the launch advertisers.
“We’re always looking for new and innovative tactics to reach and engage with consumers in relevant ways,” said Kari Marshall, vp of media at T-Mobile, which is continuing its 4-year-old Un-carrier campaign in the Pandora ads.
Pandora users have to opt in to the program to participate, and a whopping 42 percent of Pandora’s 76 million monthly users have already done so, per Lizzie Widhelm, svp of ad product strategy at Pandora.
“Around 30 million people opted into Video Plus during the testing phase,” she said. “Some of the opt-in rates are particularly exciting—for example, when we’re asking users if they would like to watch an ad to replay a song, we’re seeing that over half of the time they choose to actively engage, raise their hands, and say, ‘Yes, I’m happy to watch this ad.’”
To be clear, consumers who pay for ads-free Pandora Plus ($4.99 per month) and/or Pandora Premium ($9.99 per month) automatically get unlimited skips and replays with their subscriptions. Those users won’t be presented with the Video Plus ads.
The new, incentive-based ad unit is Pandora’s latest product offering to brands, which includes various native and interruptive ad possibilities for audio, video and display. With Video Plus, the company appears to be building on the same idea as Pandora’s sponsored listening offering. That format rewards consumers with free content in exchange for watching a video ad. In a nutshell, Video Plus ads are sponsored playbacks and skips.
“Let’s say I’m a teenager who wants to replay a new single I just heard for the first time,” explained Jonathan Eccles, group product manager at Pandora. “I may actually intend to replay that song a few times, so in that case we’d allow one video ad to power multiple replays.”
The advertiser, Eccles said, will only pay if the viewer takes in 15 seconds of the spot. Video Plus’ cost-per-15-second-completed-view (CPCV) rate, according to Pandora, is comparable to what other video platforms offer. While it didn’t disclose specific figures, industry players in recent years have stated that some Pandora video ad offerings run anywhere between $15 and $25 CPM. Given the 15-second completion guarantee, Video Plus’ CPCV almost certainly runs higher.
Eccles added, “And what if an advertiser is looking to tell a more in depth story? Video Plus also allows brands to run longer ads, such as 30-second spots or even long-form up to 2.5 minutes—in these cases, you’re still only ever paying if 15 seconds or more of the ad is being consumed.
Lastly, both U.S.-focused Pandora and its more globally-minded rival, Spotify, are expected to generate over $1 billion in ad sales this year.