Online radio presents a huge opportunity to advertisers. We review Spotify and Pandora to help you determine where to be most effective.
When it comes to reaching prospective students, online radio has the distinction of being omnipresent: users listen to music while they work, while they drive, while they work out — and music can be streamed from a multitude of devices. This presents a huge opportunity to advertisers.

The question becomes, where should you place online radio ads to be most effective?

Overview
Historically, Pandora has been the big name in internet radio for advertisers. In its early days, Spotify focused more heavily on the music versus the advertising, which affected reach when layering on geo-targeting and other targeting parameters. However, this year Spotify has made a push to increase their ad revenue by making its audio ad inventory available to programmatic buyers. This, along with the shift to allow non-premium users to listen on the mobile app, will increase Spotify’s inventory and will enable advertisers to layer on targeting while still maintaining an effective reach.

Audience
While Pandora still has a larger portion of the audio audience overall (84K unique monthly users vs. 53K for Spotify, according to comScore), Spotify is growing quickly, especially with the younger demographics. Spotify is reaching 21-26 percent of the 13-18 year olds and 18-24 year olds, whereas Pandora is only reaching 11-19 percent of those demos.

Capabilities
Both partners have video, mobile and sponsored offerings along with their audio product. Below is a high-level look at their targeting and placements; Pandora has the edge over Spotify in terms of sophistication of the ad product and targeting capabilities.
*The retargeting component can target users who have interacted with an ad previously in the interfaces. This is not your typical retargeting where a cookie is placed on a website to create a retargeting pool.

Performance
Keypath and our partners have seen that Spotify performance is much more comparable to Pandora now that it has made improvements on its backend to the advertising product. As with all display campaigns, performance expectations should be rooted in awareness metrics, such as total traffic, total impressions and CPM, lift in brand impressions, etc.

Who’s the best fit?
In order to determine which online radio partner is best for your institution, consider what is most critical to your campaign strategy. Do you have a large budget to target high school students in a growing platform? Spotify is likely the best fit for you. Do you have access to data and audience profiles of your current students that you would like to leverage? This aligns best with Pandora’s offerings.
As usage of online radio continues to increase, each of these partners will need to continue to develop its advertising capabilities in order to have a leg up on the competition. It’s anybody’s game!