He’s never hidden the fact that broadcast radio is his biggest competitor, and Wednesday was no exception. Pandora CEO Tim Westergren was answering questions at the Citi Global Technology Conference in New York and was asked about selling ads in the local markets. It was a perfect chance for Westergren to take a swipe at radio. But he also mentioned something his company will never be able to do, something radio will always be number one at.
Westergren said it’s been a 10-year learning curve in terms of who to hire, what the right number of sellers is, how much to sell with external sellers versus inside sales and technology, and that’s a moving target. He said part of it is evangelizing and convincing local advertisers to move away from radio.
Westergren said Pandora sellers are talking to radio buyers who have been buying the same thing for 30 years. And he mentioned the one thing Pandora will never be able to do, be live and local and part of the fabric of every community. “Their kid plays on the softball team with the local radio rep. It’s an insular industry, and we’ve go to crack into that. But now that we’ve reached this scale, we’re really opening that up.” He says there’s no better way to understand the process than to talk to a Pandora seller who came over from radio, and has been on the job for a year.
“When we go into a market, we’ll find the best local seller, which is typically number two or three at the local radio cluster, and we can pretty much get whoever we want,” he said. “They typically take a pay cut when they come to Pandora, they go four to six months where they can’t sell a thing, and then like clockwork after six months they’re breaking open accounts, then a year and a- alf later they are making more money than they made before. For them, they go from selling this really unsophisticated broadcast audio product to having this whole portfolio of things to sell to those same advertisers. Yes, it’s audio ads, we can do spots, the same you can do on broadcast, but you can add video, it’s reportable, it’s targetable. Arming them with something they’ve never had before. They feel like they got Willy Wonka’s ticket.”
Pandora is like a jock in high school coming into the dance and saying “radio I’m dancing with your date.” Yet the date knows or will quickly find out, she’s already with the guy actually making $$$. Credit to Pandora for making the same claim over and over, because left unchecked people start to believe what they hear regardless of whether or not it’s true.
While it is reasonable to expect Pandora to admit it’s “live & local” appeal is not part of their overall package, we (radio) still fail to exploit that factor.
More importantly, Mr. Westegren cannot be faulted for identifying and announcing the obvious: Radio is (generally) a very unsophisticated medium in that we fall so incredibly short in the presentations of our “live” presenters and, as importantly, in the creation and presentations of our advertising products. This has been the case for decades.
That the Pandora model has some serious limitations, but only by comparison, is a representation of radio dodging a very heavy artillery shell.
Not smart. Jus’ lucky, I’m sayin’. But, for now, I guess that still counts for something.