Pandora Media Inc (NYSE:P) announced last week that it was making its new ad product, Video Plus, available to all its advertisers. A couple of corporate advertisers such as T-Mobile US Inc (NASDAQ:TMUS) are already using the platform to run their media campaigns.
With Video Plus, advertisers only pay Pandora when users of the music streaming service complete watching a video ad that runs for 15 seconds. Once the users complete watching the ad they stand to benefit from features on Pandora which are only available to paying subscribers getting unlocked for them. This includes being able to replay favorite tracks or skipping more songs.
Target group
Tests on the advertising product began around a year ago and during that period it emerged that the demographic who that was most interested in watching the ads were around the ages of 18-34, a target group that is highly coveted by advertisers. Users aged 24 years or younger were the ones who were most likely to choose to watch the ads. But to get a better understanding of how Video Plus is performing among advertisers, the next quarterly report which is expected to be out later this month will give better guidance.
In its financial report for the second quarter the music streaming giant indicated that it had shifted the focus of its strategy. This coincided with Pandora concluding the sale of Ticketfly, its subsidiary at a price of $200 million.
Sirius investment
At the same time Sirius XM Holdings agreed to invest $480 million in Pandora. The investment which was concluded a few days ago now leaves Pandora flush with cash. Some of the money will be used by the music streaming giant to capitalize on opportunities that present themselves in the online radio business as well as to make investments that are highly targeted.
“We have taken a number of steps to hone the company’s strategy and position Pandora to continue to build audience and extend monetization through a combination of advertising and subscription revenue streams,” said the chief financial officer of Pandora, Naveen Chopra.
On Friday shares of Pandora Media Inc rose by 0.13% to close the day at $7.70.
