Pandora vs. Spotify - Which is Right for Your Advertising?
/SETTLING THE DIFFERENCES
Trying to figure out the differences between the Pandora and Spotify audiences is not hard. There’s plenty of data to be found, and even a quick Google search has the potential to overwhelm you with charts, comparisons and statistics. But the important differences between the two giants of music streaming are found in the more considerable pieces of demographic data that keep appearing in every study.
MUSIC TO YOUR WET-BEHIND-THE-EARS
Firstly, Spotify listeners are younger. Younger and more tech-savvy. Whatever the reasons may be: The Spotify user experience or its’ youthful branding, there’s no disputing it. According to the latest numbers, “nearly two-thirds of US Spotify users were between the ages of 13 and 29, with 18-24 year olds accounting for the largest share,” while Pandora users skewed a bit older, with the largest group of users falling somewhere in the 35-44-year-old range. [1]
To put that in one perspective, Spotify users are 30% more likely to use Gmail, whereas a whopping 92% of Pandora users are more likely to use Yahoo! Mail. For those of you who are not in the millennial “basket,” that may not mean much. But for those of you who are in on the joke, the idea of using Yahoo! Mail, to a younger audience, is culturally verboten. In other words: Yahoo is not hip.
But that’s okay. After all, 44 year olds are consumers too, and they represent a very important segment of the population. Hawking higher ed? Maybe Spotify is a little bit more in tune with your audience. Selling financial services? Perhaps Pandora is a bit more music to your ears. But the best part? Both can be segmented, optimized, programmatically placed and highly tailored to your target audience, making either streaming radio service a very savvy buy for any data-driven marketer.
GET OFF MY LAWN!
It’s not only Pandora’s audience that’s a bit older, wiser, and more experienced, however. It’s also their ad platform that is more evolved. As Pandora has focused on building their ad products, they’ve achieved a higher level of sophistication both in creative execution and targeting capabilities. Have a nice, animated, high-impact creative execution? Pandora may be a better platform on which to execute these. If you have a smaller budget and a highly-targeted group you’re trying to reach, Pandora may be a better play there, too. But don’t get too used to these numbers. Spotify recently implemented programmatic ad inventories and they’re sure to catch up to Pandora soon. But keep in mind, as with all digital marketing technologies, you should expect this to change.
ADDRESSABLE VS. NON-ADDRESSABLE AUDIENCE
If you do decide to add streaming audio to your marketing plan (which you should), be sure to keep one important metric in mind: "addressable audience." An addressable audience means a group of users who listen to their content for free, with ads. Non-addressable means the audience is using the paid version of the audio-streaming app and are therefore listening without ads, and therefore cannot be reached by any campaign. As of now, Pandora has an advantage. Although Spotify recently boasted about 72 million active users within the U.S,, the number of ad-supported Spotify listeners is likely more like 54 million users (i.e. addressable). Pandora’s numbers look more like 86 million active users (U.S), with about 81 million of those being non-paid, ad-supported and therefore addressable.
MIND THE TREND
When it comes to digital and mobile marketing (streaming audio included) its often more important to pay attention to trends rather than current figures. And if you abide by this rule of thumb you must note that Spotify's audience numbers are steadily trending up at a much greater rate than Pandora's.
THE BOTTOM LINE
While both Spotify and Pandora both have their pros and cons, the biggest thing to take away is that streaming radio is a fantastic and efficient place to generate highly-targeted user engagement, establish a great branding campaign, or extend and supplement your current marketing plan.
[1] Emarketer.com