John Trimble is CRO of Pandora, an internet radio service.
AdExchanger.com: How important is display advertising to Pandora's overall revenue model?
JT: We are genuinely in a unique position in the marketplace based on our ability to bring brands a digital multi-platform adverting solution with display, mobile and audio. The success of our display has been the core of our revenue, but the growth as a market leader on the mobile app front has created accelerated and valuable scale and engagement to leverage the mobile and radio advertising offerings. We are well positioned to work with brand marketers to develop these multi-platform solutions that take advantage of Pandora's ubiquitous experience.
Does yield optimization technology provide an important option for you as a publisher?
Absolutely. Not only does AdMeld help us generate the highest yields from our discretionary ad inventory by optimizing multiple networks, they allows us to focus on developing and nurturing direct client relationships and new sources of revenue.
What do you look for in a yield optimization company? Is it just about driving revenues?
Revenue is always important, but it's definitely not the only thing we look for. Reliability is a major factor. Another important aspect of managing discretionary inventory is quality control. The last aspect we consider is making sure we work with outside companies that dedicate resources on their side to help us achieve our goals.
What's your view on ad exchanges and buying platforms?
I like the idea of exchanges and buying platforms from an efficiency standpoint. Instead of haggling over whether our non-guaranteed inventory should get sold for $3.45 or $3.50, an automated system can help make those decisions so it works for the publisher and the buyer. However, we're cautious to jump in head first because we want brand advertisers to know the benefits of Pandora outside of just pure efficiency. Brand advertisers have the opportunity to integrate with our service with custom radio stations, skins, and audio ads, in addition to standard IAB units. We want those advertisers to be aware of those opportunities in addition to our efficiency vehicles. These opportunities need to be communicated by a direct sales team, and cannot be accomplished through a buying platform.
When you look at your inventory? Do you see it as direct/premium and remnant? Or is there a secondary channel between direct/premium and remnant?
There has always been a big gap between direct/premium and remnant. Over time, every publisher should work to close that gap by working with the right advertisers, indirect channels, or platforms. Our premium sales force works with major agencies and large national brands. We'd like to see the gap between premium and remnant (which we refer to as discretionary) get filled with local and smaller endemic advertisers. Although a band may only be able to spend $1K per month to promote their new album, with the right targeting, they can afford to pay a "secondary premium" rate and still make it work for their model. The key here is automation, which brings us back to ad exchanges, buying platforms, and self-service models.
How will your new deal with Katz work with your inventory? Will they be selling audio ads only or will they be allowed to sell display too? If so, do you allocate everything to Katz and then send whatever isn't sold to other monetization sources?
Katz is essentially an extension of our radio sales team with a focus on radio advertisers in our uncovered territories (mostly the Midwest and Southeast). Katz will be selling our standard radio product, which is an in-stream audio commercial with a synched banner ad.
What has been the biggest challenge for you as CRO in this recent, difficult economic environment?
You are correct, it is very challenging out there, the usual patterns and pace of the advertising market has a very different flow. That said, we have been very fortunate to continue to grow our partner base and actually do very well. We have benefited from our teams focused efforts of delivering unique and effective value for advertisers to tap into their core consumers. In this type of market, advertisers become extremely selective with who they are partnering with and the ability to deliver an engaged audience in multiple platforms has positioned us well.
Do you think agency buying platforms are a net positive for web media companies? Or are they cannibalizing your direct sales by buying the same audience cheaper through networks and exchanges for example?
As I mentioned earlier, we become challenged in this type of marketplace to deliver against multiple key metrics for our partners. We are big believers that a key value proposition for brands starts with the engagement of Pandora's targeted and passionate audience. We view ad buying platforms as a strategic piece of the overall media mix and while reach is a key component of any plan, the ability to create value through deep contextually relevant campaigns is always core to achieving brand objectives.