Mary Beth Garber Takes On Pandora ... Again
August 1, 2011 at 5:41 AM (PT)
KATZ RADIO GROUP EVP/Radio Analysis and Insights MARY BETH GARBER has released "Conflicted Concepts -- Drilling Down on PANDORA's Selling Propositions: The first in a series." In it, she writes:
We've been hearing a lot lately about PANDORA's claims regarding its selling propositions, and think it's important to get a real sense of the facts behind their claims. Therefore, we are going to explore some of the elements behind those selling propositions. Since each deserves attention and analysis, we will do just that over the next week, delivering a focused analysis of each of PANDORA's premises, promises and propositions. Using both their data and industry-accepted data, we will delve into the validity of recent PANDORA corporate releases and their continued attempts to position themselves as an AM/FM radio station. We don’t believe they are anything close to radio, and more to the point, we think an actual exploration of their claims will show they clearly are not.
TODAY, let’s focus on the conflict between one of PANDORA's primary selling propositions -- its ability to target for advertisers -- versus the new mass ratings it claims it generates. And unlike the set of comparisons they use, we’re going to compare apples to apples, not watermelons to peaches.
PANDORA hired EDISON RESEARCH to amass the number of 18-34 and 18-49 year olds who were connected to their site in the top ten markets of the U.S. It didn’t matter where they were on the PANDORA site itself, or whether they were on their "JUSTIN TIMBERLAKE Station," or a genre station like Hip Hop, or 80s Music or Love Songs, or their own mix -- if users were between the ages of 18 and 49, they were aggregated to form a single rating, one that PANDORA intends to use to position itself against individual broadcast radio stations. This makes absolutely no sense, and here’s why.
Let's say a media buyer was considering a buy targeting 18-49 year olds. They can take one of two approaches: If they were buying multiple markets and the target was simply all the 18-49s available, without regard to the environment or the culture in which the message were delivered, one logical step would be to take proposals from KATZ RADIO GROUP Sales, which represents 95% of the radio stations in those markets and would be able to tailor a submission that provided double digit or more delivery of the 18-49s in each of the markets. They might also talk to PANDORA, which, according to their purported ratings, could deliver an average of a 0.5 rating against 18-49s in each market. Double digits. 0.5 rating. No contest.
If the buyer were looking at only one market, the natural comparison would be to take a submission from different radio groups in the market and PANDORA. In this case, the aggregation of just one group's appropriate radio stations would deliver an average quarter hour that is 460% greater than that of PANDORA. And there are many others available which would, like PANDORA, aggregate various formats together to deliver 18-49 year olds. Those are the only fair comparisons that can be made. But that isn’t what PANDORA is suggesting, and that's why PANDORA's claim makes no sense.
If the media buyer, on the other hand, were buying for a product that required targeting with careful regard to the environment where the commercial would run, the buyer would consider individual radio stations for their ability to reach the kinds of 18-49 years olds targeted, in a controlled environment that would be relevant to the message of the commercial. Real radio stations would have the skill set and the capability to do this easily. In order to be comparable, PANDORA would have to offer far more targeted access to its playlists. The conglomeration of PANDORA's collection of music, from R&B to Hip Hop to Classic Hits to Classical and more, is not controllable enough to suit the buyer’s goals or deliver the kind of targeting the client expects. In any event, that targeted playlist group would be considerably smaller than a 0.5 rating in a market. And, in truth, that more targeted playlist won’t carry anywhere near a 0.5 rating for PANDORA. If PANDORA really wants to position itself against, say, a pop music station in NYC, then it would have to generate a rating that includes only the users who are accessing that kind of music on their site in order to compare them. Another truth: taken by themselves, few, if any, of PANDORA's targeted playlists would meet the minimum listening threshold.
Generating ratings for targeted playlists is something PANDORA will never do. But it is what they need to be doing if they are going to accurately compare their ability to deliver users to any single radio station. But then, if the media buyer wants to be adjacent to sports or news or traffic reports, requires a live read and interaction from a personality, wants to sponsor and be involved wtih an event, PANDORA's ratings would not matter. PANDORA could do none of these. Pandora isn’t a radio station, it’s simply a grouping of playlists. With commercials.
PANDORA can either sell watermelons that amass ratings by demographic segment, or sell apples that are targeted, but much, much smaller in size. It cannot have it both ways.
GARBER previously defended terrestrial radio against PANDORA two weeks ago (NET NEWS 7/14).