Pandora’s New Exec Alan Schanzer On Digital Audio And Programmatic

pandoraAgency and ad tech vet Alan Schanzer landed at Pandora as SVP of Agency Relations on Jan. 13, and his goal is to broaden the streaming radio company’s relationship with advertisers.

“I’ll be helping to develop Pandora’s strategy with holding companies, major advertisers and agencies, and, at the very top level, help them understand the power of Pandora and the power of audio content,” said Schanzer, who will report to CRO John Trimble. “A lot of my role is educating and informing the marketplace about what Pandora can do, and helping our partners understand how they can leverage our offerings.”

Pandora has been aggressively courting advertisers. It’s put together branded playlists for clients like Gatorade, Taco Bell and Toyota, and last year introduced the ability to promote those stations to its users as recommendations.

More subtly, the company also changed the way it allowed advertisers to buy inventory. Whereas Pandora used to field two sales teams – one for digital buyers and one for radio buyers – it has since consolidated those teams into an integrated audio-buying system enabling optimization and audience data overlays, with the help of Mediaocean, STRATA and Triton Digital.

Part of the problem initially was that Pandora didn’t want to use Nielsen Audio ratings (formerly Arbitron). Pandora’s three media partners needed to build out an infrastructure to create a rating system that looked like Nielsen Audio, but wasn’t.

Schanzer has pedigree in both the agency and online advertising worlds, having worked as MEC Interaction’s managing director and ad network Undertone’s chief client officer.

Schanzer spoke to AdExchanger.

ADEXCHANGER: You’ve gone from working at an agency to an ad tech firm and now a digital audio content company. What informed those moves?

ALAN SCHANZER: My background and DNA is on the agency side, working strategically with major brands to help them achieve their objectives. When I went to Undertone I didn’t regard it as being all that different from working in the agency world. But my time at Undertone was about understanding how a network business can deliver value to a customer or to an advertiser.

My expectation here is that I’ll be working with and partnering with the same people I’ve been working with throughout my career. Everyone now on the advertising and marketing side is thinking about all the same things that Pandora is thinking about, in terms of where advertising, technology and content merge.

How does digital audio fit into the ad tech space?

It’s more about how digital audio fits into the ad media space. Audio is the mechanism, but the technology behind it is crucial. At Pandora’s core, it’s a piece of technology that delivers a user experience. That’s terrific, but that’s not what the advertiser or the consumer is thinking about. They’re thinking about the message and the connection between the advertiser and the consumer, and the consumer and the artist. On the tech side, Pandora has done well, but it’s important to understand how that technology can drive a brand’s business forward.

What does Pandora have and how can it facilitate this?

With the explosion of mobile and new connected devices, I anticipate a renaissance in audio advertising. Audio is a powerful medium for marketers to connect and resonate with consumers who are constantly on the go and not always looking at their screen. Because audio is native to Pandora, advertisers can have a seamless, personal conversation with Pandora’s listeners at many times and in many contexts throughout their day, whether they’re in their car, using their connected speakers or any of more than 1,000 CE devices we are integrated into.

How is Pandora’s inventory bought?

We are committed to making all of Pandora’s inventory – audio, video and display – as easy as possible for the advertising community to buy. We are, thus, integrated with all the best-in-class buying platforms for digital inventory. Plus, on the radio side, we continue to focus on integrating into radio-buying platforms such as MediaOcean and STRATA. Since announcing these partnerships in May 2013, we’ve found continued success by allowing our audience data to reduce the friction of transacting in the radio business.

Is Pandora’s data available to advertisers? If so, to what extent?

Pandora leverages its data to build proprietary targeting capabilities for advertisers looking at specific verticals like Hispanic and political. We know that our data can be very useful to advertisers and we are open to exploring other opportunities to use our extensive data pool in the future, as long as it is mutually beneficial to our listeners, our advertisers, artists and Pandora.

How are agencies starting to think differently about audio content?

This type of content is very personal. People are very selective about how they spend their time when they choose to listen to something, whether that’s a podcast, music or the radio. It’s about understanding the tastes and the interests of individuals wherever they are. There are thousands of stations on Pandora that represent lots of different types of users. It’s important for advertisers to think about messaging that’s not disruptive but additive to the user experience.

But audio content is complex, because it’s a national-local play, particularly for a company like Pandora. We can be thinking about localized and national messaging that’s relevant to the type of consumer are the type of genre they’re experiencing. There is an immense amount of ways that we can take advantage of the personalized nature of Pandora to better personalize the message from advertisers.

What’s the opportunity for programmatic within audio content?

Programmatic is a massively important part of what’s happening in the marketplace overall. Pandora, like most other businesses, is beginning to think about how they’re going to automate transactions, particularly on desktop and from a display perspective.

For Pandora, being able to transact more efficiently, being able to transact how agencies and buyers want us to transact, and being able to transact on incredibly proprietary and powerful data sets is a big opportunity for us. And it’s a big opportunity for the marketplace.

And that ties back into the personal nature of audio content. Audio is consumed privately but also in group settings, so consumption is both personal and shared. The question is: How do we marry those two listening experiences when technology comes into it?

Where do programmatic and creativity collide?

It’s a bit of a complicated challenge, but also another huge opportunity. If you think about it, automation, speed to market, use of data and all the things that programmatic should bring to bear should allow us to think much more granularly and from a much more customizable perspective about what creative is the right creative to show to a particular consumer at a particular time.

The challenge there is how to develop at scale the level of customization around creative that you need to accomplish that. The speed and detail around the transaction ultimately might happen more quickly than creative customization can occur.

But programmatic should be about driving efficiency in the marketplace, not from a price perspective but from an operational perspective. Pricing can be a part of that, but it should not get in the way of the right creative for the right consumer at the right time and it should not get in the way of the great potential of addressability.

That’s a challenge for all of us in the programmatic space, and it’s why programmatic is still relatively parked at the lowest common denominator, which is transacting low-cost impressions on some form of data. Companies like Pandora need to find ways to continue to unlock the power of the creative message along with unlocking the efficiency, speed and powerful data that comes with programmatic transactions.

What’s trending for ad tech in 2015?

I see businesses like Pandora, like other businesses I’ve been involved with, getting deeper into the Internet of Things and all the different places where people access different types of content. Obviously, that becomes much more fragmented and much more compelling, because it also becomes much more personal.

I think ad tech in 2015 is going to be about personalization catching up to faster transactions and understanding how we can begin to communicate with consumers in new places. For Pandora, that’s primarily in the dashboard in audio. But what happens for advertising when we have screens on our refrigerators that can offer access to Pandora, or other platforms that can exist in that environment?

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