Before it was announced that SiriusXM was buying Pandora, the long standing music streaming service made their own rather eye-raising purchase. The company bought
top digital audio advertiser AdsWizz. I could say that the purchase went under the radar but truthfully nearly everything Pandora does fails to make the same dent as Apple Music or Spotify. Even though Spotify and YouTube are globally far bigger than Pandora, the online radio company is a key player in the world of digital audio advertising within the United States. Digiday even reported that
Pandora claims to be the largest publisher of digital audio ads in the U.S., and it owns two-thirds of all digital audio inventory, the company reported
in its quarterly earnings last year.
The ad tech company works with major audio publishers including Cox Media, iHeartMedia, Spotify, Soundcloud, Deezer and TuneIn Radio – all competitors to Pandora in the streaming audio space. But Pandora will operate AdsWizz as an independent subsidiary and AdsWizz will continue working with its current client roster.
Pandora bought an advertising company that works directly with all of its immediate competitors in the music streaming space. Apple Music and Tidal might be competing in the same space but they are not competing for the same advertising dollars. That exact reason is why Spotify in July announced
a separation from AdsWizz after the company was bought by Pandora. Certainly it’s easy to see why the Swedish company left AdsWizz, because one of their chief focuses is advertising and why have that entangled with a direct competitor.
Ignoring YouTube, Pandora is still the largest American music streaming service by sheer number of users. Spotify is over 50 million, Apple Music is somewhere over 20 million, and Pandora is still hovering above 70 million
, which would sound great if not for the fact that number is right now on the decline. SiriusXM with their purchase of Pandora got access to over 60 million people that engage in advertising supported music listening. I’d only expect them to double, if not triple, down on investing in this space of digital advertising. The company even said it themselves. Scott Walker, Pandora’s senior vice president of programmatic sales, in an interview with Rainnews said
The future of advertising is digital — personalized, targeted, more transparent in terms of what you’re getting, reach, and quality compared to traditional TV and radio channels. Then there are fast-growing new channels, smart speakers and cars. We expect digital audio can be massive.
What is so striking about online audio is just how new it really still is within the advertising space. Unlike the broader web where Facebook and Google, the duopoly, own so much of the advertising space digital audio ads is still relatively fertile terrain. (For that reason much of privacy concerns over digital advertising hasn’t taken over audio conversations yet.) Still Pandora is comparatively a veteran in this space and with the purchase of AdsWizz, it’s clear that Pandora’s most exciting offerings could be in the business of advertising, not music.
That’s why I didn’t find it too shocking to see the company’s latest announced a partnership with SoundCloud earlier this month, which to quote Billboard:
Pandora will begin handling U.S. advertising sales for fellow streaming platform SoundCloud in 2019, the two companies announced on Wednesday. The agreement will allow SoundCloud to tap into Pandora’s direct sales capabilities, sea of data and recently launched audio marketplace to allow brands and advertisers the ability to purchase its U.S. ad inventory directly.
The companies said that they have more than 100 million unduplicated listeners between them in the U.S. alone, and only 13 percent audience overlap.
I’m sure Pandora would love to live in a world where they were able to still partner with Spotify but at least picking up SoundCloud isn’t a too bad of a prize.
The music side of Pandora isn’t going anywhere, unless SiriusXM were to rebrand it, but I don’t see much for the company to do in the music space. However there is a lot of ground to cover in digital audio advertising, because Pandora like SiriusXM isn’t limited to just music offering and all kinds of audio will need advertising.