A Challenge For Pandora

Some within the radio industry are calling Pandora out. The latest came from Clear Channel CFO Richard Bressler. Pandora, which each month releases its own metrics on listening hours and share of U.S. radio listening, claimed that it had 8 percent of all radio listening in in October. Clear Channel doesn't buy it, because other statistics say the total of all radio listening online makes up only 8 percent. That's all Internet radio stations and services combined, including Pandora -- and iHeart, TuneIn, Slacker, and thousands of others.

But Pandora continues to issue releases about its numbers, and people are buying it -- including many advertisers who have seen Pandora's impressive presentations about its audience.

In fact, radio, with repeated calls for Pandora to step up and prove its numbers and methodology, may be playing right into Pandora's hands: Pandora could easily claim radio is just being defensive because the industry feels threatened.

And they might have a point: It's not helpful for radio to appear to be on the defensive. If Pandora is so insignificant, why does radio keep talking about it? I had that very reaction when Pandora issued a press release saying its listening levels actually went up the week Apple's iRadio was announced -- I thought Pandora wouldn't make such an announcement unless they were running scared.

I co-sponsored an online radio event at the Wizard Academy recently, and I was surprised by the way advertisers were enamored with Pandora -- and how few were asking the tough questions, like "Can you prove your numbers?" Pandora is a new shiny object, and there are advertisers who want to believe in its success.

Meanwhile, every radio station has to prove its numbers with advertisers every day, as they demand ratings from credible sources like Nielsen Audio, which has to adhere to specific standards from the Media Rating Council. Where is the demand from advertisers for Pandora to prove its numbers are accurate?

This game needs to stop. The advertising industry needs to hold Pandora to the same standards they hold all other media. They need to demand an apples-to-apples comparison of Pandora and terrestrial radio listening, and refuse to support Pandora until it allows a third party to verify the accuracy of its numbers. Frankly, Pandora should be glad for an opportunity to prove its figures are valid.

Pandora entered the radio space in hopes of acquiring radio's audiences and advertisers. If Pandora truly believes its numbers are accurate, it's time to step up and prove it.

I invite Pandora CEO Brian McAndrews to talk about the numbers face-to-face with a radio-industry audience at my Forecast conference November 20 in New York. If Pandora's numbers are accurate, there is nothing to hide, and may the best win.

Pandora: Time to step up and live by the standards of all other media. 
 

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How fortunate are the stations that operate in unrated markets, who don't have to play the Arbitron (now Nielsen) game and attempt to validate their usefulness to an advertiser based on, to quote Ben, "flawed methodology, laughably small sample sizes, and audience 'estimates'."

"Server-side data" may be attractive to marketers in that it gives them another way to cover their butts when the ads don't work (just as GRPs have done in the past). The real issue in accountability is what it's always been - not how many people are reached, but how effective are the messages that reach them? Traffic in stores, butts in seats, donations to the charity...these are the acid test of the value of any radio station, regardless of its distribution channel.

I like Pandora - for background music. It's a little like hitting "random play" on a CD changer. The quality and variety are superb. But if they start inserting ads, I'm likely to go back to CDs or MP3s for a purely musical environment.

However, like so many other folks, when I want *company* - local personalities, local culture, local news, weather, or whatever - local radio is still my first choice. Yours too?

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Nearly since it was born, Pandora has been rejected by terrestrial radio as not being “real radio”. As recently as yesterday, Clear Channel’s CFO Rich Bressler once again poked Pandora as being “not even close to real radio.” Why, then, should anybody care what this ‘non-real radio’ entity (Pandora) claims with regard to audience numbers? It would be apparent that the afore-mentioned 26 year-old media buyers are perfectly content with data presented by Pandora, likely because they (or members of their social networks) may be users of this ‘new shiny object’. I suspect you are right when you claim there are Pandora advertisers who simply want to believe in its success…and so they do. How wonderful – and different - it might be for Rich Bressler if “real radio’s” advertisers did the same.

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No. No, No, No.

Two important things here: "Pandora: Time to step up and live by the standards of all other media."

The standards and methodology of the "other media" that you refer to are garbage. Flawed methodology, laughably small sample sizes, and audience "estimates." Present Arbitron's methodology to a 200-level statistics class and get laughed out of the room.

In contrast, Pandora uses server-side data. That means an exact measurement of how many listeners there are at any given time, where they are, what they are doing, and even who they are, demographically speaking.

I really think you're opening a "Pandora's Box" here. If you successfully persuade/annoy Pandora to bend their standards of measurement to meet old radio's inferior methodology--even as an experiment--you may not like what you find. You probably won't like what you find.

This old radio lobby is poking a hornet's nest here, and it's full of 26-year-old media buyers that live on the coasts and have no use for terrestrial radio. Proceed with caution.