Pandora is testing promoted stations with music and ads picked by brands like Kleenex and Taco Bell, which will show up in some listeners' lists of "Stations You Might Like," the company said Wednesday.
Since launching as online radio more than a decade ago, Pandora has grown to become the most frequented music service on the Internet, currently at 76 million monthly active users. Getting comfortable in that perch, Pandora has lately been investing heavily in its advertising capabilities. The company aims to improve its ad tools and swipe some of the bigger advertising budget going to traditional radio now that its more secure in holding a large audience's attention.
The promoted stations are Pandora's latest ad experiment. Brands involved in the beta launch include Kleenex, Skechers, StubHub, Taco Bell, and Toyota Motor Sales, and the brands will act like executive producers of their stations to create a musical personality, Pandora said. "StubHub's Next Stage" promoted station, for example, will have interviews and songs from Tokyo Police Club, while Kleenex has country songs by artists such as Jason Aldean and Kelly Pickler .
The brands also control the ad load on their stations, so how many ads you hear in an hour will vary between them.
About 10 percent of Pandora listeners will see the branded stations show up in their "Stations You Might Like" listing, showing up one at a time. Targeting stations to the most relevant Pandora listeners won't apply at the beta stage, but a Pandora spokeswoman said serving up advertising that is both relevant to the user and effective for the advertiser is a key focus. "As we build out the product it will also integrate with our unique ability to target and segment," she said.
For the time being, beta phase listeners themselves must choose to add a promoted station, and Pandora is increasing those stations' visibility once they do.
Pandora shares were down 2.4 percent, or 55 cents, at $21.97 in recent trade.