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Consultants, Media Buyers Weigh Impact of Pandora-Sirius Merger

The merger of satellite radio provider Sirius XM and streaming radio service Pandora announced this week could benefit campaigns by boosting their audio ad options and enhancing their targeting.

While it has remained unprofitable, Pandora had been aggressively expanding its targeting capabilities in recent years, including allowing for the use of third-party data at the congressional district level.

As a result, it has been a popular ad channel for campaigns and groups. In fact, several consultants told C&E that while they'd regularly bought Pandora spots, they rarely, if ever, bought Sirius spots for their clients.

“Pandora has much better targeting segments,” said Cathie Herrick, president of DC-based Buying Time. “We can target down to the district, zip and in many cases political affiliation. Sirius, for the most part, is a national buy, so it does not help local campaigns.”

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Herrick said she would be watching to see how the newly merged company’s ad offerings evolved.

Meanwhile, GOP media consultant Casey Phillips said he expected campaigns could benefit from the merger. 

"Pandora is great because they are easily targeted and if putting them together expands the targeted audio streaming market then that is a good thing," Phillips said. 

Kegan Beran, of FlexPoint Media, said the merger could generate appealing ad packaging, but there won’t be any significant price reduction as a result.

 “At a high level, it seems like mergers like this reinforce the power of audience-centric advertising and the omnichannel media buying approach: more customer data facilitates better targeting across more inventory and more channels,” said Beran, an Ohio-based GOP media buyer. “I expect negligible change in costs as the inventory/user increase will balance out with demand.”

He added: “I don't necessarily see satellite ads having better targeting capabilities because we're still talking about a broad reach medium.”

Sean Duggan, who heads political ad sale for Pandora, recently noted in a piece for C&E that the company has worked with more than 3,000 campaigns over the past six years.

During that time, he saw radio ads go from a last-minute GOTV tool that consultants turned to after TV airtime was bought up, to a medium that was used throughout the cycle. Part of the appeal, he argued, was the targeting. 

"Campaigns can now speak each voters’ language, literally and figuratively," said Duggan. "Now, different listeners in the same congressional district can experience different creative messaging. Some might hear English language ads aimed at Republican women, while another Hispanic listener will experience a Spanish language political ad tailored to them."

Duggan said he couldn't comment on how the merger could change Pandora or Sirius' ad offerings going forward. 

The new company has a vast audience. Sirius boasts some 36 million paying subscribers, while Pandora has 70 million, many of whom subscribe to its ad-supported service. The $3 billion deal is expected to close in early 2019.

Digital audio as an ad segment is seeing tremendous growth. In fact, spending the category was up 39 percent over the previous year to $1.6 billion in 2017, according to a recent report by the Interactive Advertising Bureau.

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By
Sean J. Miller
09/26/2018 03:53 PM EDT
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