Pandora Is Pitching Brands Ad Targeting for Connected-Home Devices

Letting them slice up ads with 2,000 audiences

Illustration: Yuliya Kim; Sources: Pandora
Headshot of Lauren Johnson

As devices like Amazon Echo, Google Home and others grow in popularity, Pandora is rolling out granular ad targeting it hopes will create more contextual advertisements.

The Oakland, Calif.-based company is launching targeting that allows brands to zero in on audio ads served within the Pandora connected-home app, which is built into more than 2,000 devices such as Echo Sonos’ smart speakers and LG devices.

“That environment is uniquely context rich because it is about the home environment—we think taking this combination of context between the connected-home environments and applying these audience segments to it that it’s a really unique offering,” said Eric Hoppe, director of product management at Pandora.

Advertisers can overlay Pandora’s 2,000 audience segments on audio ads that run specifically on a voice-enabled devices. For example, a fast-food restaurant could run ads during a window of time in the morning to promote its breakfast menu or people identified as movie enthusiasts could be targeted with ads from entertainment brands.

Nestlé Waters has tested Pandora’s connected-home targeting for its “Greatness Springs from Here” campaign that targeted “mindful achievers,” people involved in their local communities who like health and wellness trends and love to listen to local music, said Jill Germano, group marketing manager of regional spring waters for Nestlé Waters North America.

“The reason why the Pandora buy is so interesting to us is because not only does it let us do traditional media targeting where we know who they are and what platforms they’re on, but it lets us go deeper in terms of behavior, which helps us establish an emotional connection with them,” Germano said.

Pandora backs up its move into in-home ad targeting with stats. It has 10 million users—up 40 percent from last year—across all of its connected devices. On average, people who own a connected device enabled with Pandora spend three hours a day streaming music. And over the past year, active users (people who listen at least once a month) from voice-activated devices have grown 282 percent.

According to Pandora’s own research, the average person listens to 65 percent more music after purchasing a smart device and are 1.5 times more likely to live in a household with an income over $150,000. In terms of measurement, Pandora is working with third-party companies to measure stats like brand lift to track how consumers respond to voice-activated ads.

“We’re going to start exploring in this environment whether users are more receptive to a 10-second ad versus a 15- or 30-second ad,” Hoppe said. “There’s a number of parameters that we are going to test in within this environment.”

Meanwhile, Pandora reported its third-quarter earnings last week, blaming lackluster results in part on the company’s slow embrace of programmatic advertising. Pandora’s revenue hit $360 million, growing 9 percent year over year, but ad revenue was flat at $276 million, a 1 percent increase.

@laurenjohnson Lauren Johnson is a senior technology editor for Adweek, where she specializes in covering mobile, social platforms and emerging tech.