Pandora Reorgs Business And Plans To Reinvest Savings In Ad Tech

Pandora said Wednesday it would shift resources and savings by investing in ad tech.

The music streaming platform, which has fallen behind competitors in developing programmatic advertising solutions for buyers, said it will redeploy staff to build ad tech and mar tech and expand into non-music content.

Pandora declined to comment further. Read the release.

The company will also hire new employees to work in these areas, many of which will be in Atlanta, “a region with lower costs than the company’s headquarters” in Oakland, Calif.

Pandora CEO Roger Lynch said in a statement: “We have an aggressive plan in place that includes strategic investments in our priorities: ad-tech, product, content, partnerships and marketing. I am confident these changes will enable us to drive revenue and listener growth.”

As competitors such as Spotify’s programmatic offerings start to mature, buyers are demanding programmatic solutions and better measurement from Pandora. And while Pandora is still the largest streaming music platform in the US, it faces a declining and aging listener base and an increasingly fierce pool of competitors.

Q3 revenue was up just 9% to $360 million year over year, with ad revenue flat at 1%. Total listener hours for the quarter shrank to 5.1 billion from 5.4 billion last year.

“One consistent theme I’ve heard from advertisers is that we don’t have all of the features they need to easily transact with us,” Lynch said on Pandora’s third-quarter earnings call last year. “This is starting to have material impact on our revenue.”

Lynch has been bullish on programmatic since he took the CEO role in September. The Sling TV founder told investors in November that he plans to invest in products that can better automate, optimize and measure ad campaigns. He also plans to build a self-serve option for smaller buyers.

“We know we need to invest in ad tech,” Lynch said in November. “We need a significant upgrade to our ad technology and what we can provide advertisers. We need to become an easier company to transact with.”

Pandora reports Q4 and full-year 2017 earnings on Feb. 21.

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