- Music streaming service Pandora experienced 45% growth in ad revenue in Q1, beating analysts' estimates but failing to turn a profit.
- The percentage of revenue driven by ads dipped from a usual 80% to 72% in the first quarter due to a one-time revenue reserve related to paid subscriptions.
- Pandora has been testing new ways to grow ad revenue, like increasing the number of ads played within an hour from four to six and pitching ad buyers on new products targeted with user data.
Pandora clearly has been making great strides in growing advertising revenue. Its testing of various ad ideas has paid off in gaining more ad dollars, but that extra attention in advertising and marketing is contributing to spending as well. If the company is able to maintain the revenue growth without spending as much, it will be profitable soon.