Pandora announced earnings last week that included some impressive growth numbers. For the trailing twelve months, Pandora generated more than $1 billion in total revenue. It also reported that it’s quarterly advertising revenue was $230 million and mobile accounted for 80.4% of all revenue in the quarter. Revenue per thousand listening hours grew 24% and local advertising now accounts for nearly 26% of ad revenue. Both national and local advertisers now recognize that Internet radio commands a large audience and Pandora is benefiting.
Before the earnings report, eMarketer published an article that includes a new forecast for Pandora mobile advertising revenue. Up from $571 million in 2014, the forecast predicts mobile ad revenue to climb at a compound annual growth rate of 27.5% to $1.18 billion in 2017.
Internet Radio is a Mobile Advertising Channel
The eMarketer and Pandora data confirm that Internet radio should be viewed as primarily a mobile advertising channel. Television has long aggregated large audiences in the living room and much smaller groups in other locations. That has shaped how advertisers approach the channel and the expectations for performance.
The parallel is that Internet radio and streaming services aggregate large audiences (169 million in the U.S. in 2015) that can be anywhere and are typically on the go using mobile devices. That fact should shape also how advertisers approach Internet radio audio streaming services as a mobile marketing channel. The Internet Radio Ad Load Report found that large advertisers are increasingly flocking to streaming services and Pandora is a clear beneficiary because of its big audience.