Pandora's Sponsored Listening: How Less Interruption Could Create More Engagement

After nearly a year of beta testing, Pandora has finally launched “Sponsored Listening,” which offers listeners an hour of uninterrupted music in exchange for opt-in brand engagement.

In order to enter a Sponsored Listening session, Pandora users must click on a banner ad that leads to a video, swipable slideshow, or other rich media unit, such as the 360-degree product views favored by brands like Land Rover North America. In exchange for a minimum 15 seconds of engagement, listeners will get an hour of uninterrupted music, which brands may follow with an audio ad thanking them for their attention. 

With more than 80 percent of its audience listening via mobile, Pandora realized how important it was to engage audiences with compelling, mobile-optimized content that wouldn’t overwhelm users, according to Lizzie Widhelm, senior vice president of ad product and sales for Pandora.

“In today’s environment, all brands are struggling to get attention,” Widhelm says. “This product is specific to mobile, and we’re excited about that. Sponsored Listening lets users make the choice to engage with advertising and ensures that the brand delivers a quality experience right back at them.”

Pandora isn’t the first music app to trade brand engagement for an ad-free music experience. Nearly a year ago, Spotify rolled out “Sponsored Sessions,” which offer 30 minutes of music in exchange for watching one piece of branded video content.

But Pandora’s longer beta period could offer advertisers targeting and pricing opportunities that similar products from competitors don’t. If a desired segment doesn’t respond, advertisers don’t pay, which is a departure from Pandora’s traditional ad model.

“This is priced based on engagement,” Widhelm says. “If the listener doesn’t reach the required attention mark of 15 seconds, the advertiser doesn’t pay. It’s about that lean-in experience, which is much different from our CPM pricing.”

But Pandora feels pretty confident that most listeners will reach that critical 15-second mark. In tests, Sponsored Listening resulted in a 12 percent lift in brand awareness and a 30 percent increase in purchase intent for brands like Corona Extra and Gatorade.

Sponsored Listening is Pandora’s second ad product update this summer. In July, the company brought programmatic ads to mobile in an effort to stay competitive in a sea of new music apps, including those from Apple and Google.