What’s good for the listener is good for the advertiser: Skippable Ads Experiment

For as long as we’ve been serving ads on our platform, we have abided by the principle, “what is good for the listener, is good for the advertiser.” And while that is a simple statement, if you are an advertiser reading this, you know deep down it’s not straightforward in practice. Choice and personalization are core to the Pandora listening experience and we want this principle to authentically apply itself to our listeners’ ad experience.

Our working theory is that if listeners have control over their experiences, their experiences will be more satisfying and impactful. And, therefore if advertisers are tied to more positive experiences, this will lead to better outcomes related to key campaign objectives.

We have seen that increased consumer control leads to satisfaction on Pandora and across the industry:

• Ad supported listeners are generally more tolerant of ads because they understand the trade-off.¹
• Rewarded videos drive 3X the brand favorability and purchase intent that standard video does - in part due to the inherent control within the experience.²
• Pandora’s early voice ads put consumers in the driver’s seat and they can choose whether to hear more from an advertiser - and they say yes disproportionately, and a greater rate than our typical click-through.¹

So what are we witnessing here? There have been many studies that indicate that brands that provide value in their advertising and allow for a conversation build trust with their consumers which ultimately translates to business wins. We also see from the above insights that consumers are seeking opportunities from brands that enable them to control their experiences.

Should we see what happens if listeners are provided an opportunity to skip not just songs, but ads?

This concept is not new, and you have more than likely skipped a video ad in environments like YouTube. But for Pandora, this experiment is particularly interesting. Why? Fundamentally, our algorithm is based on the 450 song attributes that are definable by both computer and human music scientists who we employ here at Pandora – but, importantly, it is refined and reimagined constantly by what the listener – the only human that matters in this instance – actually responds too. Their engagement signals (thumbs up, thumb down, skip a song) then enable us to go beyond our own algorithm and add a necessary level of personalization to their listening experience

In April, we will be embarking on a study where we can gather insights on what we can learn if we temporarily allow users to skip ads as well as songs. Can we better understand when the right time to serve an ad might be? Can we discover the type of ad a consumer wants to hear? It will be interesting to know if there is a certain point in time that might tell us how to move forward from an ad length standpoint. "Can we better understand how listeners' sentiment improves when brands are allowing for skippable control over part of their ad?"

Thanks to the scale of our platform we are able to experiment without impacting our advertising partners in a way that would meaningfully impact their campaign or campaign results. With audibility standards being defined as we speak - and the question of how ad length and what ad complexions truly drive ad reception - we are incredibly excited to get information directly from the consumer to help guide our path forward.

Where will this take us? Pandora’s Insights Lab will find soon find out - if you’re interested in hearing more, ask us!

¹Source: Pandora proprietary data ²Source: eMarketer, June 2019