Dive Brief:
- Pandora will now let advertisers target audience segments within the connected home platform, according to a press release made available to Marketing Dive. This will let brands zero in on audiences who are served audio ads within the Pandora smart speaker app and provide listeners with more relevant content.
- The service's connected home platform, which works on devices like Amazon Echo and Sonos smart speakers, has 10 million users tuning in for an average of three hours per day. The number of active users from voice-based devices has increased 282% over the past year, per the release.
- Pandora partnered with Nestlé Waters North America, which owns Poland Spring, Deer Park and Perrier bottled water brands, to test the connected home platform for its "Greatness Springs from Here" campaign that targets people who are interested in health, wellness, local music and their local community.
Dive Insight:
So far, advertising and marketing via voice devices has gone through a few fits and starts. The voice assistant advertising channel is expected to hit $19 billion worldwide by 2022, per new research from Juniper, but it has some limitations for marketers with fewer options than other forms of advertising and a need for informational messaging that's compelling enough to make listeners remember the product or brand and search it another time. The Juniper study also found that even though smart home assistants are on the rise, most voice assistant usage will be on smartphones reaching more than 5 billion in use globally by 2022.
One key challenge with ads on voice-based devices is the highly personal nature of successfully reaching people in their homes. This challenge is similar to how marketers first negotiated mobile marketing given how personal SMS and push notifications were initially seen by consumers.
Pandora's segmented targeting for brands offers a clearer pathway for marketing messaging at a time when use of home voice devices is growing. Pandora's internal research found that 65% of users listened to more music on its connected home platform after purchasing smart speakers, and those users are 1.5x more likely to have more discretionary spending and a household income above $150,000.
The key for Pandora's ad targeting platform will be to provide a distinct mix of contextually rich content and audience segments that has a greater value proposition — or more compelling, intuitive voice features — than its competitors. So far, its partnership with major beverage brand Nestlé Waters points to a potentially successful strategy.
Pandora's new targeting tool comes as the smart speaker market continues to boom. Smart speakers like Amazon Echo, Google Home and Sonos are estimated to reach 70 million — or 55% of all U.S. homes — by 2022, according to new data from Juniper Research. At the same time, the research predicts voice-based devices such as connected TVs, cars, wearables, smartphones, tablets and speakers will hit 870 million by 2022, a 95% jump over the 450 million estimated for 2017. Pandora's new targeting platform aims to serve up more relevant and context-rich advertisements to users of its connected home app and enhance cross-device use for a smoother experience for those consumers that have multiple voice gadgets.