This story was written by Joseph Tartakoff.
Online radio streaming service Pandora has found a big (but potentially controversial) advertising partner in Clear Channel, the conglomerate whose traditional radio business it is threatening to disrupt. Clear Channel subsidiary Katz Media Group will now sell ads on Pandora, along with Pandora’s sales team, according to AdAge. “When you grow as fast as we have this quickly, your inventory gets ahead of you. Plugging into an endemic, national network of sellers is a great point of leverage for a company like Pandora that is experiencing hypergrowth,” says Pandora co-founder Tim Westergen (pictured, left).
The move comes as the online radio service not only continues to post big growth but also has increased the frequency of audio ads on its service, in part because more people are listening to Pandora on the go—and therefore are less likely to look at Pandora’s traditional display ads. “We dont want you looking at an ad while youre driving, Pandora CEO Joe Kennedy said at our econSM Conference in May. The company said earlier this year that it planned to increase the number of audio commercials to two or three 15-second spots per hour, up from one—or often none. Pandora has said it hopes to be profitable by next year.
But while the Clear Channel relationship should definitely help Pandora with those plans, it also could damage the company’s indy cred, especially among those who turn to online streaming services to avoid corporate radio. ReadWriteWeb has a run-down of all sorts of criticism that has been leveled at Clear Channel.
Westergen downplays the Clear Channel ties, saying in an e-mail to us, “The deal has no bearing on a relationship with Clear Channel—just as using Doubleclick has no implications for a relationship with Google.” He adds that the frequency of ads on Pandora will not change: “Aside from hopefully helping us fill up the unsold audio inventory we have, it will have no impact on our longstanding audio ad strategy which will continue to be short, tasteful and infrequent.”
For Clear Channel, the partnership provides a way for the company to boost its digital efforts. The company launched its online radio ad network last summer, which it claimed at the time was the largest digital radio network. The company also has its own online radio service—iheartradio.com. Clear Channel says it attracts about 20 million unique listeners a month.
By Joseph Tartakoff