An employee in the lobby of Pandora headquarters in Oakland, Calif. The Internet radio company's targeted advertising has become a favorite of political campaigns.
Of the billions of dollars that will be spent in this year's elections, the majority will go toward advertising, and as the huge demand for air time pushes up the cost of TV commercials, many groups are turning to a new technological frontier: Pandora Internet Radio.
If you've watched a popular prime-time television show recently, you've likely started to see more political ads during the breaks. Same for Pandora listeners. For Pandora, as with local television stations, this year's spike in political ads is a welcome source of cash for a media company reliant on advertising revenue. During the first three months of 2012, Pandora brought in $70 million in advertising revenue, nearly double its total over the same three months in 2011, a non-election year, according to SEC filings. For political campaigns, the feeling is mutual.
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"When you combine audio, video, and display ads--it's a powerful format," says J.D. Schlough, a Democratic digital media consultant. "That's part of what makes Pandora unique."
Unlike most Internet display ads, Pandora's ads make impressions upon users who, even if only listening passively, cannot avoid an ad simply by looking away. Pandora also has more than 150 million registered users and in many places is the most listened-to radio station. But perhaps the biggest reason Pandora attracts political types is targeting – political campaigns can customize which listeners hear what ads based on where they live, how old they are, and even what type of music they listen to.
"On Pandora we know exactly who our audience is, so if you're trying to reach moms, the D.C. area, or young people in Ohio, we can do that," says Francisca Fanucchi, a spokeswoman for Pandora. When users sign up for Pandora, they give their ZIP code, gender, date of birth, and E-mail address, all of which are used for targeting purposes, Fanucchi says.
This customization makes Pandora ideal for microtargeting, a strategy used by political groups to identify very specific types of potential voters--like "liberal leaning post-graduate singles" or "middle-aged commuters near Philadelphia"--by mining large amounts of data such as credit card records and Internet histories.
Chad Kolton, a spokesman for Republican data-tracking firm Data Trust, says companies match commercial data to voting lists for microtargeting purposes.
"You can purchase everything about individuals--their age, their income range, their social activities or purchasing habits. There's an extraordinary amount of detail that comes from consumer data companies," he says. With this information, campaigns can cater ads to very specific slices of the population.
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"In the 2004 campaign, the Bush campaign had begun ads on closed-circuit gym TVs because some of the voters they were trying to reach had regular gym habits. [Microtargeting] is an example of things like that."
Online activity provides an especially rich source of data for use in microtargeting. Campaigns can track people using "cookies" and match Web identities to voting histories, party registrations, and indicators to predict how they'll vote. On Pandora, campaigns not only target using this demographic data, they also use your music preferences.
"That's definitely an option we provide, music genre targeting," says Fanucchi of Pandora. "Our advertising campaigns are very custom. We work with [political] campaigns hand in hand."
Pandora members who listen to country music might hear different ads than listeners of an R&B stations, for example. Neither the campaigns nor the data companies will say which music correlates to which political party, but it's clear that what you listen to plays a part in what ads you hear. Analysis of data by Brian Whitman, co-founder of music intelligence company Echo Nest, found strong correlations between music tastes and political affiliations.
Republicans were especially easy to identify, as the seven artists with the strongest correlation to being Republican were country singers, led by Kenny Chesney. Democrats were harder to pin down, but Rihanna, Jay-Z, and Madonna were the three artists most correlated to Democratic listeners. There were some surprises--Pink Floyd was among the most Republican-correlated artists, and Bob Marley was the only Democrat-correlated artist not associated with pop or hip-hop music.
Preferences like these, when cross-referenced with commercial and political data, allow firms to form very detailed pictures of voters.
"We do have models that predict which channels you consume a lot of, if you're a radio listener, what types of music categories would be your likely preference," says Laura Quinn, founder of Catalist, a Democratic communications firm. "I know there's real strong interest in opening up that channel [Pandora] and using it more. That may simply be they're seeing a lot of Republican activity."
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Indeed, Republicans seem to be using Pandora more, at least recently. In a unscientific survey of Pandora listeners of both parties conducted by the author, not a single one had heard a Democratic ad. The Romney campaign has been especially active. In addition to display and audio ads, the campaign has taken advantage of one of Pandora's newer offers for political campaigns: E-mail sign-up. Listeners hear an ad from Romney's campaign and are then prompted to allow Pandora to give the campaign your E-mail address.
While research shows Republicans are much more likely to listen to radio, especially country and talk stations, Internet radio appears to be a bipartisan activity. Such a large audience, which can be sorted and picked apart by advertisers, makes Pandora an ideal medium for issue advertising as well.
Over the summer, before the presidential race really began to heat up, one ubiquitous Pandora ad dealt with the "Durbin Amendment" and debit card savings. Paid for by the banking industry's Electronic Payments Coalition, the ad claimed retailers were hoarding money they promised to customers for paying lower fees on debit card swipes. The coalition's making its argument to politicians too--it's spent half a million dollars lobbying Congress and financial regulators so far this year, according to the Center for Responsive Politics.
As more people avoid the most effective political medium, television commercials, by using DVR, tablets, and smartphones, Internet radio listeners should expect a political Pandora even after this fall's election.
Seth Cline is a reporter with U.S. News and World Report. Contact him at scline@usnews.com or follow him on Twitter.
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