PANDORA ADVERTISING CAMPAIGN Paper IV: Campaign Plans Book Atchley, Golding, Prokop, Smitherman, & Trauner MKG 420: Integrated Marketing Communications Ball State University November 21, 2014 1 Table of Contents From Paper 1: 3 54 From Paper 3: 83 The Budget 87 Media Objectives Situation Analyses 3 Environmental Analysis 9 Company Analysis 12 Product Analysis 26 Consumer Analysis 41 Competitive Analysis SWOT Analysis From Paper 2: 62 Analysis of Our Research 69 Target Market Profile 73 Campaign Objectives and Strategies Creative Cardinal Inc. Ellie Atchley, Katelyn Golding, Elena Prokop, Kyle Smitherman, & Teresa Trauner 93 87 Target Audience 88 Reach / Frequency 89 Geographic Coverage 90 Creative Implications 91 Promotional Support 91 Trade Communication 92 Budget Limitation Media Strategies 93 Media Mix 99 Scheduling 101 Weighting, Reach, and Frequency 104 Media Tactics 105 Specific Vehicle Recommendations Credits & References 110 References 117 Graphic Credits 2 Cultural Environment The cultural environment of the Internet radio industry is competitive, fast growing, and expanding. About 53% of Americans aged 12+ listen to Internet radio. This audience prefers to listen to radio online because of the opportunity to choose and the ability to skip undesirable songs. This is Over 70% of consumers listen on a computer. The numbers are quickly rising for tablets and mobile devices. This is considered the “mobile era,” and it is a huge cultural factor. Online radio companies predicted this surge of mobile use and prepared for it by creating apps designed for mobile users. Since then, Pandora ad sales have been driven through the roof with mobile exposure. cons idere d the “mob ile er a.” According to a Mintel (2013) study, Internet radio ads evoke better reactions then AM/FM radio. Although mobile use of Internet radio is responsible for a large portion of ad sales, studies show that most consumers still listen to Internet radio from their homes. (Online Radio Consumption, 2013) Situation Analyses 3 Cultural Environment Consumers overlap in their methods of listening to radio. Figure 1: Comparison of mediums used to listen to music Source: Mintel, 2013 4 Economic Environment Pandora’s total revenue equaled $427 million in 2013 with 67 million monthly listeners. Pandora, as well as the online radio industry in general, is growing rapidly. Sales growth is expected to increase because of the continued growth of users’ hours listened (Mintel, 2014C). Pandora pays about 25% of their total revenue a year back to the music business. But most of that money goes back to the copyright owner of the song, and then a much smaller portion to the artist, and a very small percent to other background performers on a track. When that figure is averaged by the number of songs played, that amounts to about a tenth of a penny per song played. Online radio companies are receiving backlash for the contracts that are giving a majority of the money to large corporations instead of back to the artists (Knopper, 2011). Raising the ethical question: Where are customers’ monthly subscription money going to? Situation Analyses 5 Social Environment Pandora’s sharing capabilities exceed users’ personal profiles; listeners can connect with friends through popular social media sites such as Facebook and Twitter. Consumers have expressed their desire to share music with friends. In response, Pandora has given users the ability to express their music playlists and share their favorites with others. Pandora users can: follow other users, leave comments, and even listen to and discover new artists of similar genre. Image: Screenshot of a user’s profile Situation Analyses Source: Trauner, 2014 6 Social Environment The music business is—and always will be—evolving into a new stage. Now is the era of online music streaming. Not only is this beneficial to avid music lovers of the world, but it also gives advertisers the best media vehicles to reach their target audiences. “Streaming services give music-lovers access to millions of songs, but the services are not all alike. Online-radio versions, including Pandora and Apple’s iTunes Radio, choose what consumers hear, and the firms make their revenues through advertising.” (The Economist, 2014) In 2014 streaming online music sources has about 28 million paying subscribers. Due to the widespread adaptation to mobile devices, the music streaming industry is continuing to grow. User-friendly apps designed for mobile devices paired with the improved speed of mobile internet connection (with the emergence of 4G technology) have contributed to the increase in online radio usage on mobile devices (the Economist, 2014). Situation Analyses 7 Political/Legal Environment Pandora's terms of use are important to Unfortunately, the issue of stealing music ensure the integrity of their site; that it is from the Internet has not been solved; being used by the appropriate audiences because of this, Pandora will continue to and for the its intended purposes. You lose listeners to illegal downloading. must be at least 13 years old to open a Pandora account, and Pandora is only to be used in the United States, New Zealand, Australia and due to music licensing agreements (Pandora, 2014). Unless you have an active DMX Pandora for Business account, Pandora is for personal use only. DMX accounts are for business use and must be signed up due to the DMCA (Digital Millennium Copyright Pandora Radio does not allow nor condone illegal downloading of music. Act of 1998) and the digital rights management that enforces music licensing laws for online radio. Situation Analyses 8 Company Analyses Pandora is the sole product, positioned as the breadwinner within Internet radio. Figure 2: Pandora leads the pack with 31% of Americans aged 12+ who have listened within the past month. Source: StatistaCharts, 2014 Who is Pandora? Pandora is a company that is revered as a pioneer in the digital audio streaming market. Pandora is a music discovery service capitalizing on the Music Genome Project. A 2014 survey has Pandora leading the crowded audio streaming market with an impressive 31% of Americans recorded as having used Pandora in within the past month. See Figure 2. 9 Company Analyses Since 2000, Pandora has been an online music radio system designed to adapt to users’ music preferences and connect them with other music of similar style. The service plays a certain genre of music based on a user's artist selection along with positive or negative feedback for songs that are chosen by the service, Pandora is able to take into account when future songs are being selected. Origin of Pandora’s Name ‘Pandora’ means "all gifted" in Greek. From the Greek mythology, Pandora received gifts from the gods, one being a gift of music. At Pandora, they celebrate music and have made it their mission to gift the musical adventurers with an experience of music discovery. (Pandora Media, 2011) Pandora’s Mission Statement: “ To play only music you love. (OK, we've added comedy as well so we're also up for playing some jokes you'll love.) (Pandora Media 2011) ” 10 Company Analyses Pandora’s Philosophy: Pandora’s philosophy is to “Create a Pandora’s team of musician-analysts are unique music experience, customized for listening to music, one song at a time, the individual using the Music Genome while studying and collecting hundreds of Project®.” By utilizing the wealth of musical details on every track. Details musicological information stored in the include the songs’ melody, harmony, Music Genome Project, Pandora instrumentation, rhythm, vocals, lyrics, and recognizes and responds to each much more. The result is a personalized individual's tastes. radio experience - stations that play music you'll love - and nothing else. (Pandora Media, 2011) Situation Analyses 11 Product Analyses Pandora’s History: Pandora Internet Radio started out in Oakland, California as a company called Savage Beasts Technologies. After a near failure, the company refocused its efforts on digital music and created the music streaming service app that is available on the Apple App Store today. Pandora is a public-owned company, whose stock is traded on the NYSE (Pandora, Investor 9). Situation Analyses 12 Product Analyses Stage in the Product Life Cycle: GROWTH Pandora is currently in the growth stage of the product life cycle. The growth stage is characterized by increasing competition in the marketplace, lower prices, different marketing approaches, greater consumer awareness in the category and in increase in profits for all in the marketplace (Growth, 2013). With increased challenges in the growth stage, comes high profits for Pandora and an opportunity for greater promotional and marketing activity to guarantee continued growth and reduced competition. It is in this stage of the product life cycle that a brand can increase market share, brand loyalty and sales. Situation Analyses 13 Product Analyses Brand Personality: Pandora aims to be leaders in the radio streaming, advancing technologies and ideas in the Internet radio streaming industry. Pandora Internet Radio strives for a modern, yet innovative brand personality. In a blog post detailing Pandora’s vision, CMO, Simon Flemming-Wood, stated that is their goal to “honor our past while looking to the future with a bolder, more modern identity. The visual design language, which we refer to simply as “lights,” is meant to evoke the interplay of lights from a live show while symbolizing the flow of music from artists to listeners” (Fleming-Wood, 2013). Situation Analyses 14 Product Analyses Major Features: Pandora Internet Radio is uniquely customized for a user-friendly experience, boasting its number of major features and benefits. Pandora allows users to create and save personalized radio stations based on their favorite artists, song titles and genres. Users have access to a “thumbs up, thumbs down” feature, which allows Pandora to learn users’ preferences and adapt to their choices. Pandora has predominantly offered music, but has added comedy to their service as well. Listeners create stations based on comedic preferences, as they do with music. Comedy stations include material starting with the 1960s through present day. Pandora offers a social tie in which allows users to publish their station and song choices via social media; users can also “share” a song with a friend. Both the free and subscription service allows users to purchase songs directly from their stations (Information about Pandora, 2013). Situation Analyses 15 Product Analyses Major Benefits: Pandora can be accessed on multiple consumer devices such as cars, video receivers, blu-ray players, home theaters and TV providers. Pandora is available on most mobile devices by download through Google Play, Apple App Store, Kindle Marketplace, Nook Market and the Windows Phone App Store. Pandora Radio is a free music streaming service if used on the web, though this also applies to most mobile devices as well. Situation Analyses 16 Product Analyses More Major Benefits: Pandora Internet Radio requires little effort from users, building personalized libraries of music from their Music Genome Project. Users have the opportunity to discover new music each time they use Pandora. While there is an intricate structure behind the streaming service, it offers users many interactive features. Pandora is free, legal and safe. Pandora One, the ad-free subscription, offers additional benefits to users for a low price. Pandora’s subscription service is ad-free and comes with an audio quality boost, which provides listeners with a better experience. Along with no ads, Pandora One includes less skips and fewer timeouts. Pandora One’s features make it ideal for both consumer and business use (Mintel, 2014C). Situation Analyses 17 Past Advertising Campaign Example Client: Bacardi Pandora partnered with Bacardi in May to launch a digital music series that mixed Cuban and hip hop compositions. The promotion, which ended June 30, 2014, streamed live studio sessions on Bacardi’s Pandora station entitled ‘Loud & Untamable’ (Mintel, 2014A). The partnership, which was highly successful, has lead to talk of streaming additional live segments through Pandora. This has opened up the opportunity to introduce new service offerings through Pandora that the competition has not considered. Situation Analyses 18 Current Advertising Campaign Testing improved services to target consumers directly Pandora is testing promotional stations on users’ “Stations You Might Like” list that will showcase targeted music and advertisements from companies participating in the beta launch. Pandora offers participating brands the opportunity to personalize their radio stations and create “musical personalities” for that reflect brand positioning (Mintel, 2014B). By promoting and partnering with these various brands, Pandora has created additional marketing opportunities for the Pandora Presents series. Situation Analyses 19 Other Marketing Efforts PR & Promotional Events: Pandora holds benefit concerts at little to no cost to consumers. Pandora Presents is a Pandora Internet Radio sponsored concert series that includes partnerships with various brands. Pandora and Jeep Wrangler partnered in a live event to connect “bands, brands and fans” (Our Work, 2014). Jeep and Pandora used the Music Genome Project to identify up-and-coming artists in various cities and brought free concert experiences to fans from coast to coast. These events include pre-show tailgates, pre and post-event custom content and cross-platform media (Mintel, 2014C). Situation Analyses 20 Product Analyses Media Vehicles: Pandora advertises via: target audience (consumer advertising; business-professional advertising), geographic area (national advertising), medium (broadcast electronic: radio; direct-mail advertising: e-mail; interactive advertising: Internet), and purpose (product advertising; commercial advertising; noncommercial advertising; and awareness advertising) (Arens & Weigold, p.19). Situation Analyses 21 Media Vehicles Examples: Image: Mobile Monetization, Pandora’s 2-Pronged Approach Source: Pandora, 2014 22 Product Analyses Advertising Expenses: Pandora’ Sales and Marketing expenses for 11 months period ending December 31, 2013 were $70,212,000. For 12 months period ending January 31, 2013, were $107,715,000. Note that their fiscal year was changed from January 31 to December 31, and thus their latest fiscal year only accounted for the previous 11 months. For the most accurate calculations, the 12 month fiscal year ending in January should be used. The ‘Sale and Marketing’ expense account “consists primarily of employee-related costs, including salaries, commissions and benefits related to employees in sales, sales support and marketing departments. In addition, sales and marketing expenses include transaction processing fees for subscription purchases on mobile platforms, external sales and marketing expenses such as third-party marketing, branding, advertising and public relations expenses, facilities-related expenses, infrastructure costs and credit card fees” (Pandora, Investor 9). Situation Analyses 23 Product Analyses Using Pandora to Advertise: Pandora Internet Radio is host to a wide variety or sponsored stations and advertisements. Among the different types of advertisements featured on Pandora’s mobile application and website are audio, tap, animated overlay pop-ups and banner (Mintel, 2013B). Pandora Internet Radio is host to a wide variety or sponsored stations and advertisements. Among the different types of advertisements featured on Pandora’s mobile application and website are audio, tap, animated overlay pop-ups and banner (Mintel, 2013B). Situation Analyses 24 Using Pandora to Advertise, Example Client: Gatorade Gatorade, one of the many brands Pandora plays host to, combines a branded radio station with banner advertisements. In the example of Gatorade, the brand uses their own channel to promote their brand as a workout channel. For their nationally branded radio, Gatorade created three distinct stations to exemplify each product line of the new G Series. As one of Pandora’s native advertising solutions, branded radio is a powerful tool to build the sound of a brand and engage fans. In the case of Gatorade, it was the opportunity to interact with listeners organically while providing unique, curated stations that users can enjoy indefinitely (Our Work, 2014). Situation Analyses 25 Consumer Analyses An Infinite Scope Pandora’s music selection is almost as diverse as their consumer market. Use of the Internet paired with the enjoyment of radio music has given Pandora the opportunity to capitalize on an industry with minimal geographic, demographic, and behavioral boundaries. Listening to and discovering new music happens every day for millions of people all around the world; it is a universal treasure indiscriminate of age, race, gender, income, location, and lifestyle. Though the potential for market growth is limitless, Pandora will likely continue to focus on maximizing profits at home before aggressively pursuing expansion overseas (Trefis, 2013). Situation Analyses 26 Consumer Analyses Narrowing Down the Options: Choosing a Target Market As indicated previously, Pandora’s con- reach that consumer in mobile and offer sumer market potential is tremendous. them both Latin and non-Latin music," Recent operations have been focused said Mike Reid, Pandora’s executive di- on improving their growth in the rector for multicultural. "You've got sec- smartphone market and integrating their ond- and third-generation Hispanics be- product into automobiles (Trefis, 2014). coming more influential in this country Their largest homogenous user segment is and therefore the proliferation of the Hispanic population aged 13 to 35 smartphones and technology really put years old located within the United States us in a good position with this consum- (Peterson, 2013). “Growth in [our] Hispan- er” (Cobo, 2014). ic [market] is driven by our ability to Situation Analyses 27 Consumer Analyses Target Market: Hispanic-Americans Hispanics currently comprise an estimat- ready have an infotainment/ multimedia ed 19 million (or 25%) of Pandora’s 77 mil- system built in. In particular, Hispanic lion active listeners. Of these 19 million, households are more likely than white/ about 17.5 million listen to Pandora on non- Hispanic households to have in-car their phones and are overall 17% more technology features weigh more heavily likely than non-Hispanics to access the In- in purchasing decisions (Mintel, 2013A). ternet through their mobile devices (Cobo, 2014). In terms of vehicles, 43% of Hispanics intend to buy or lease a vehicle within the next two years. Of the vehicles already owned or used regularly, 39% al- Situation Analyses 28 Target Market Demographics: Race, ethnicity, age, income, education Attributing to Hispanics’ digital media tion, born in the United States, has a me- consumption, inclination to smartphone dian age of 18 years old (Krogstad, usage, and vehicular multimedia systems 2014). In 2012, Hispanics had a median is their surprisingly young median age of income of $39,005 and a poverty rate of 27 years old (U.S., 2011). With the popula- 25.6% (U.S., 2013). Despite this, annual dis- tion of U.S.-born Hispanics on the rise cretionary spending totaled over $164.2 paired with a stagnant immigration rate, billion in the same year (Experian, 2012). the influx of young consumers continues About 64% of Hispanics that are 25 years to grow. Only 36% of Hispanics are for- or older have their high school degree; of eign born; their median age being 40 those, roughly 13.8% have a bachelor’s years old. The remainder of the popula- degree or higher (U.S., 2013). Situation Analyses 29 Target Market Demographics: Language Language preferences are split evenly with the majority of foreign-born (first generation) Hispanics preferring to speak only Spanish, U.S.-born with foreign-born parents (second generation) preferring mostly English but some Spanish, and U.S.-born with U.S.-born parents preferring only English (Experian, 2012). Overall, 66% of Hispanics aged 5 years and older are considered to speak English very well. Situation Analyses 30 Target Market Psychographics: The Hispanic demographic is considered ‘sold to’—but rather, courted by brands active, materialistic, hard-working, that authentically empower their cultural young, and diverse (Llopis, 2013). Many relevancy and communicate in ways still carry an emotional attachment to that naturally resonate with Hispanic cul- the Spanish language, regardless of their tural values” (Llopis, 2013). The Hispanic personal language preferences. Compa- population, now composed of over 54.1 nies with content available in Spanish as million people, is currently the nation’s well as English help make their Hispanic second-largest ethnic group behind consumers feel culturally respected and white/ Caucasians, making their market individually valued (Experian, 2012). segment a large and lucrative pursuit “Hispanic consumers don’t want to be U.S., 2013). Situation Analyses 31 Consumer Analyses Global Geographic Distribution: Pandora Internet Radio is available for ing from the U.S., more than 55% of the use solely within the United States of American population is estimated to America, Australia, New Zealand, and have a registered account (Trefis, 2013). those countries’ respective territories. Alt- After launching their services in Australia hough expansion is anticipated as part and New Zealand in December 2012, of their long-term strategy, users in the Pandora welcomed 2 million new cus- United States currently dominate Pan- tomers within their first two years on the dora’s customer database (Trefis, 2013). international market. Now, approximate- As of June 2014, Pandora has at least 250 ly two new users register every minute million registered global users (Pandora, (Trefis, 2014). 2014). With the majority of consumers be- Situation Analyses 32 Consumer Analyses National Geographic Distribution: Approximately 92.8% of Pandora’s total website traffic is generated by the United States and is currently ranked # 49 on the top 50 sites most visited in the U.S (Alexa, 2014). In terms of target market, California, Texas, Florida, Arizona, New Mexico, New York, New Jersey, and Illinois contain roughly 74% of the nation’s total Hispanic population with expanded distribution on the rise (Brown, 2013). Situation Analyses 33 Consumer Analyses Brand Preference & Loyalty: “Hispanics are used to listening to radio Spotify, Apple’s iTunes Radio, and even at work, and switching to Pandora was when compared against endemic web- easy,” said Diego Prusky, founder and sites and services such as Univision Digital. CEO of digital marketing company In- In a typical week, 39% of Hispanic users Pulse Digital. “They get free radio, with lit- listen to Pandora (Cabo, 2014). This reten- tle advertising and with their own tion rate of active users among regis- playlists” (Cabo, 2014). Ease of lifestyle in- tered users is higher among Hispanics tegration along with language and cul- than any other demographic. tural adaptation has helped make Pandora the # 1 streaming service in the country among Hispanics— higher than Situation Analyses 34 Consumer Analyses Perceived Benefits of the Pandora Recognizing its need to engage its Hispanic audience, Pandora has since expanded its library to include three separate subdivisions of Hispanic- oriented music: ‘Latin,’ ‘Mexico,’ and ‘Puerto Rico’ (Cobo, 2014). Through surveys and data collection, Pandora has proactively researched the Hispanic target market in order to personalize their user experience and improve the quality of interaction. In addition to quality music, personalization, and accessibility, Hispanics can also enjoy improved recognition of cultural nuances and an intimate musical experience. Situation Analyses 35 Consumer Analyses Purchasing Criteria & Problem Recognition Analyzing purchasing criteria involves following the steps of the consumer’s decision-making process. The 5 steps are usually completed in the following order: (1) problem recognition, (2) information search, (3) evaluation & selection, (4) store choice + purchase, and finally, (5) post– purchase behavior. 1 Problem Recognition: The consumer must first be aware that they are dissatisfied. What do I need and/or want? Can Pandora satisfy these needs/ wants? There is problem that can be solved. Examples: I want to listen to music / I want to listen to different music genres on the radio / I want my radio music to be available through the Internet / I want to be introduced to new music / ect... Sit- 36 Purchasing Criteria Information Search 2 Information Search: Searching for information before finalizing a purchase has become more of a basic instinct in this digital age. Consumers may be skeptical of the company. What is Pandora? Who is their audience/primary consumers? How do I use Pandora? What benefits or features will I receive by purchasing a subscription? How much does it cost? Where can I listen to Pandora? What devices can use Pandora? What are Pandora’s limitations? Consumers are vulmerable to persuasive advertisements. Examples: Can I search for specific songs or just artists and genres? Can I make my own playlist? Can I share my favorite music through my social media networks? What types of people listen to Pandora? Is it a one-time purchase or a monthly subscription? Can I listen to Pandora in my car or on Sit- -the-go? Can my mobile device or computer access Pandora? 37 Purchasing Criteria Evaluation & Selection 3 Evaluation and Selection: What other brands offer the exact same/similar services as Pandora? What are the similarities and differences between Pandora and these other brands in terms of brand equity and organizational structure/values? How do all of these competing services compare/ contrast against each other in terms of features/benefits, price, availability, ect.? Is Pandora still the best choice? In this judgment phase, consumers compare the services of competing companies against one another. Examples: Which brand is most consumer-oriented? Which brand only cares about generating more money? Which brand is continually striving to provide me, the consumer, more value/benefits? Which brand is the cheapest, has the least commercials, most skips allowed, widest music selection, ect.? Which brand do I like best? Sit- 38 Purchasing Criteria Store Choice + Purchase 4 Consumers have made a decision on what they want. They will do more research on where to get it from and how to access it. Store Choice and Purchase: How and where can I buy a subscription to Pandora? Should I buy now or later? Examples: Do I buy directly from Pandora or through another vendor? What payment methods do they accept? What is their return/refund policy? Is there a sale going on now or expected in the near future? Sit- 39 Purchasing Criteria Post– Purchase Behavior 5 Post purchase Behavior: How satisfied am I with my purchase? Did it reach or exceed my expectations? Will I be a repeat customer? Examples: How well does Pandora fit my lifestyle? Do I use it as much as I expected? Was it worth the money? Will I continue my monthly subscription? Could I have found a better service for the same price? Consumers re-evaluate their purchase(s) to determine if their desire has been satisfied. Retention of satisfied customers increases active user counts. Sit- 40 Competitive Analyses: Milk Music iTunes Radio Spotify 41 Competitive Analyses Milk Music On March 7, 2014, Samsung At the time of publishing their July 2014: Telecommunications America, LLC Quarter 2 financial reports, the service (Samsung Mobile) released Milk Music remained free of advertisements and (Samsung, 2014). The new radio service is without the option to purchase a a replacement of their premiere music subscription; subsequently, there were no streaming service, Music Hub, which sales figures available to be reported. retired earlier this year, July 1, 2014 (Reilly, On July 30, 2014, Samsung released the 2014). Recent emergence into the mar- option of buying a premium subscription ket has left the service with little to no to the service for $3.99/month (Whitwam, identifiable market share. 2014). The service remains ad-free, albeit for a limited time. 42 Competitive Analyses Milk Music, Continued Milk Music is a radio service created by Samsung and powered by Slacker. Essentially, Samsung created the interface and design while Slacker remains responsible for everything else music- related: content partners, licensing, and music selection (Lee, 2014). Samsung’s mission with Milk was two-fold, says Ryan Bidan, Samsung Mobile’s director of product marketing. “We heard from consumers that there were too many ads and interruptions on free services, and that set-up could be a pain with log-ins and navigating spreadsheets,” he says. Plus, “we wanted it to be identified as something completely different. We didn’t want it to be super corporate or Samsung -y because it’s not meant to be. We wanted a name that spoke to how we felt about music inside the application, the idea of being fuzzy and nice -- you know, like mother’s milk” (Hampp, 2014). 43 Competitive Analyses Milk Music, Contined Key features of the service include: The service is also highly focused on an interactive dial, no sign-in required, personal customization with the user no advertisements or interruptions, capability of six song skips per hour per and a catalog of over 200 genre station, choice of toggling explicit stations with nearly 13 million songs. content on or off, a “Never Play Song” option, and a preference menu to fine tune a station’s music selection based on popularity, release date, and how often favorited music will play. 44 Competitive Analyses Milk Music, Contined Users can also preview and listen to their Premium subscribers, in addition to the last 500 played songs from their History standard features, can skip as many menu and adjust the audio quality from songs as they want, play music without 50 kbps to 90 kbps (Lee, 2014). Addition- an Internet connection, are given a ally, Slacker, the radio service providing Sleep Timer feature, and can turn DJ Milk Music’s diverse collection, proudly commentary on or off with just a tap on promotes their stations being curated by the screen (Whitwam, 2014). top DJs and industry pros as opposed to formulas or algorithms. 45 Competitive Analyses Milk Music, Contined A major deterrent to market penetration, Despite this, Samsung executives remain however, is its exclusivity. Milk Music is optimistic in terms of future market growth. available for download only in the United Their first marketing effort, which had the States through the Google Play app store primary goal of exposure and product for 12 select models in the Samsung Galaxy awareness, took place at the 2014 annual lineup (Google Play, 2014). South by Southwest Music Conference and Festival (Hampp, 2014). 46 Competitive Analyses Milk Music, Contined As for future advertisements, TV ads and Due to the lack of need to register for the other media vehicles may coincide with service, results of the event on increasing the launch of new products or may comtheir user base are unknown. plement the marketing efforts of existing ones. As Ryan Bidan explains, “Right now, As of September 28, 2014, Milk Music has anything that could be happening as early been installed 1 million to 5 million times as January or February is still in the and averages a 4.3 on a 5 star scale out of works” (Hampp, 2014). 61,935 total reviews on the Google Play app store (Google Play, 2014). 47 Competitive Analyses iTunes Radio Similar to Pandora, iTunes Radio is an The service generates a radio station Internet radio service. Apple has had the based on the input given from the user. service open since last year in 2013. ITunes With simple reviews of songs summed up Radio is free and available for all iTunes with a “Like” or “Dislike”, then iTunes Radio users. The service does include ads and is able to give the user an individual users are able to skip tracks. Other features experience. iTunes Radio is currently available for users include customizing available exclusively in the United States stations, skip tracks, and purchase songs and Australia. The service is only accessible that are played on the stations, from the with iTunes, Apple TV platforms, and IOS. iTunes store. Skip tracks allowed are limited and comparable to Pandora. 48 Competitive Analyses iTunes Radio, Continued Apple’s consumer base is brand loyal being exclusive to Apple products and giving iTunes Radio a large consumer base losing potential listeners who don’t own to start with, the service is accessible with Apple products. While Internet is constantly all of Apple’s products (iPhone, iPod, and growing and reaching new listeners this etc.). Money from advertisements, brings more opportunities to the internet subscriptions, and songs purchased from radio industry and iTunes radio specifically. the station all goes towards iTunes Radio’s This also brings threats to the industry with profits. This new service offers Apple’s growing competition between other followers an internet radio service that is Internet radio services such as iHeartRadio already installed on their Apple devices. A and Spotify. few weaknesses of iTunes radio includes 49 Competitive Analyses Spotify The commercial music streaming service, According to the case study, “Pandora Spotify, was launched in October of 2008 Versus Spotify: A Pricing and Technology bringing a new brand for the Internet radio Analysis by Ash Alhashim, as of March 2013, industry. Spotify uses p2p technology for Spotify had 24 million users and 20 million making streaming music a more social ex- tracks in its library. Spotify is best known for perience. Users can share playlists to their sharing capabilities and allowing users Facebook and Twitter to interact with to go back and re-listen to songs, which is friends and family. Not only can users share a feature Pandora has not developed yet. music, but Spotify creates music libraries for users by identifying music they have interest in. Spotify offers premium subscriptions that allow users to stream music offline. 50 Competitive Analyses Spotify, Continued According to Spotify News, Spotify users can opt in to watch brand-sponsored videos in exchange for 30 minutes of uninterrupted music. This is the space where other brands can get recognition through Spotify. Some of these new brand partners include, Coca-Cola, Ford, McDonalds, NBC Universal Pictures, Target and Wells Fargo. Spotify offers their users with links to partner retailers to make it easy to purchase music. Spotify prides themselves on being closet. 51 Brand Equity Conclusions of a Harris Interactive Study Harris Interactive (Harris Poll EquiTrend) survey showed which brands in the conducted a study of the companies Internet Radio category enabled their with the strongest brand equity in consumers to personalize their January of 2014. Harris examined the top entertainment. A correlation was found 100 highest-rated brands of 2014. The which shows the equity of those brands study inspected over 1,500 brands, growing at a faster rate than brands in assessed across 170 categories, expand- other categories. The criterion of this ing from automotive to department study was familiarity, quality, and stores, and everything in between. The purchase consideration. survey polled 42,000 Americans, all of whom were at least 15 years of age. The SWOT Analysis 52 Brand Equity Pandora’s Brand Equity: STRONG According to the aforementioned Harris Overall, Pandora has strong brand equity Poll EquiTrend, Pandora is ranked as the among all top brands and is a leader in 4th highest gainer in brand equity among the Internet Radio and entertainment in- the top 100 brands in the Internet Radio dustry. Pandora’s ability to cater to a di- category. The study found that afforda- verse consumer base, while maintaining ble distribution of quality entertainment their promise to personalize all channels has been a major contributor to brands for consumers, continues to rapidly in- ranking high in brand equity. As a high crease their brand equity. gainer, Pandora has continued to advance their consumers’ experience by making their Internet Radio brand the most personalized. SWOT Analysis 53 Image: Pandora SWOT Analysis Source: MKG420, 2014 54 Strengths Pandora Media Inc. maintains the largest This year, Pandora’s share of the U.S. ra- market share in the Internet Radio indus- dio market climbed to 9.1% from 8.1% try. According to Fox Business, after Inter- (Fox Business, 2014). Pandora holds 77.6% net Radio experienced a growth in of the market share in the Internet radio March, Pandora reported to have a total industry (GuruFocus). In addition, they of 1.71 billion hours of listeners during the are the top station in the local radio month. This growth was 14% larger than markets across the country. the previous year’s calculation. SWOT Analysis 55 Strengths Continued Pandora is available on all media plat- stores their genres of music in every use. forms, such as mobile devices, comput- Users build a personalized music library ers, blu ray players and gaming consoles. and are able to it share with their friends Pandora has built a heavy consumer and family. Free, live concerts are a way base by providing the most personalized that Pandora connects with users. Offer- music streaming experience through the ing this feature and introducing new art- Music Genome Project. Users are given ists to specific targets helps to diversify the opportunity to discover their own Pandora’s brand amongst competitors. taste in music, while Pandora continually SWOT Analysis 56 Weaknesses Pandora is losing most of their money to too much money by not cutting back on competitor’s upgrades and subscriptions. free features. In February of 2013, they They are also offering too many features, announced that free users would be lim- such as free music streaming, so consum- ited to 40 hours of mobile streaming per ers feel as if they do not need to pay for month. Although this began to help in- more features with the subscription. Ac- crease revenue for Pandora, raising the cording to the case study “Pandora Ver- cost of subscriptions and adding more sus Spotify: A Pricing and Technology value to these features would help them Analysis”, by Ash Alhashim in March 2013, to continually grow. Pandora realized that they were losing SWOT Analysis 57 Weaknesses Continued Pandora allows users a limited amount of with their music, there are limits to cus- skips per song, which is a feature avoid- tomizing playlists. There are artists and ed by competitors. Top competitor, songs that are not available through Spotify has less advertising interruptions Pandora and consumer cannot replay or for their consumers. Although Pandora store a song that they are interested in. does allow their consumers to develop a Again, these are features that top com- personalized library and interact socially petitors are beginning to develop. SWOT Analysis 58 Opportunities Over the past year, the number of active with in-dash component manufactures, listeners has increased to roughly 10 mil- Alpine and Pioneer, so that a Pandora lion (Spotify Press, 2014). Because of this, system will be in every new car sold Pandora needs to continue to develop (Alhashim, 2013). If this portion of Pando- the most innovative features of their ra continues to grow, then Pandora will product. According to the Ash Alhashim continue to gain competitive advantage case study, in 2012, Pandora developed and grow a larger consumer base. partnerships with over 23 car manufacturers including Toyota, BMW and Ford. They have also developed partnerships SWOT Analysis 59 Opportunities Continued As stated in the weakness portion of the One subscription to get the best audio SWOT analysis, Pandora could use more quality. The only issue with this recom- of an advantage in their audio quality. mendation is that Pandora One subscrip- According to the article, “Everything An tion is tied to a computer. If Pandora ex- Audiophile Needs to Know About Pando- panded their subscriptions and best au- ra,” on Hometheaterreview.com, Pando- dio quality to all media platforms, then ra users should purchase the Pandora this could be a beneficial opportunity. Another opportunity that Pandora should utilize is advancing the free concerts they offer to users. Creating larger and more effective advertising and marketing strategies for these events will results in a larger consumer base and more revenue. Having concerts that satisfy different types of consumers would help to further our mission to personalize the music industry. Introducing new artists through these concerts would be a valuable way to market new music and Pandora’s brand. SWOT Analysis 60 Threats There is a growing competition with com- There are lower costs for subscriptions panies such as Spotify, iTunes Radio and among competitors that Pandora needs Samsung’s Milk Music. Some of these to compete with. Spotify is also continu- competitors are offering more extensive ing to develop more advanced social music libraries and more innovative ways aspects of their product, which could to stay connected in the Internet radio hurt Pandora’s consumer base. Pan- industry. Pandora’s most aggressive com- dora’s biggest vulnerabilities in the indus- petitor is Spotify. Although Milk Music is try are being the first in the market and the newest of all Internet radio brands, the price point for consumers could be Spotify is the closest trend compared to improved. Pandora. SWOT Analysis 61 Analysis of Our Research Insights About Pandora 1 The Foundation of Pandora 2 How to Establish Conviction in Our Target Market 3 Geographic Distribution of Market Penetration 4 Who Our Target Market Is 5 The Size of Our Target Market 6 How to Promote Pandora Effectively 7 Focusing National vs International Markets 8 Comparing Pandora vs Competitor Prices 9 Differentiating from Milk Music 62 Analysis of Our Research Collection + Evaluation Our group collected numerous The data collected came mostly sources about Pandora and the from secondary research. We Internet radio industry. Throughout found charts, quotes, and other this semester we have been gain- statistics from sources that are ing insight into the Internet radio highly credible. Pandora’s investor industry and their primary users. website is a great example of our With the use of databases, articles, findings. The site gave us insight to and other secondary research, our Pandora’s company. We were group was able to achieve knowl- able to find out market share, rev- edgeable insight. enue, and other company facts. Our group is confident that we found valid and reliable information to better Pandora’s company. We used research databases, articles, and websites to fuel our production with dependable sources. After deciphering through our sources, we were able to establish useful insights that will help our group to convict more visits from Pandora’s users. 63 The Foundation of Pandora Through all of the data, we have established great insights about Pandora and their target market. Our group’s first breakthrough about Pandora was on their website where we discovered their principles and mission state- Analysis of Our Research ment. The website also gave a brief history of how Pandora established their name. This material established a foundation of information regarding Pandora for our group. Ellie found this information about Pandora on September 5th of this year. Establishing Conviction Pandora distributes their investor presentations on their website. This webpage was a place that gave our group insight about Pandora’s finances and the future of their company. We were surprised to see how many cars will have Pandora accessibility. This insight about the cars leads us to believe how we can convict users to listen more music with Pandora. Also, the presentation listed where Pandora is the number one station out of the top 15 local radio markets (see Figure 3). This information let our group know where the users are mostly listening to Pandora. This webpage was found by Kyle on September 5th, 2014. 64 Geographic Distribution of Market Penetration Figure 3: Map of the USA which shows Pandora as the #1 station in 14 of the top 15 local radio markets 65 Image Source: Pandora, 2014 Pandora’s Target Market One surprising insight was about who our target market is. Before the project, our group assumed that Pandora’s primary target was a white millennial student attending college. However, we did find that Hispanic millenni- Analysis of Our Research als are our target market. We found articles that described how many and frequently Hispanic millennials are using Pandora and other internet radios. Size of the Market Our next insight about our target market came from Mintel. The report was all about how Hispanics prefer Pandora over other streaming services. Our group discovered that Pandora receives 19 million listeners that are Hispanic. This site was where we gained an understanding about the size of our primary target market. Ellie found this source on September 8th, 2014. 66 Effective Promotion We learned about how Bacardi is promoting themselves during their studio sessions with popular modern artists through Mintel. Mintel stated that the promotion would end with a live event to celebrate and promote the Analysis of Our Research Bacardi brand. The live event would be streamed to the company’s YouTube channel. This report brought insight to how we can and should better promote Pandora. Ellie found this source on September 13th, 2014. National Vs. International Focus Based on our research from Alexa.com, we have discovered how little of a presence that Pandora has outside of the United States. 94.5% of the visitors using Pandora come from the United States. The company does have their restrictions that limit their reach because they are an internet radio. This data has helped us focus our strategies towards users within the United States. This finding came from Katelyn and she found this article on September 6th, 2014. 67 Pricing: Pandora Vs. Competitors The group gained awareness about the subscription fee for Pandora. The information came from Pandora’s website. We used this data and compared it to competitors’ prices. Our group found this to be helpful infor- Analysis of Our Research mation, because we want to introduce a student discount. Our goal is to combat against Spotify’s student price. Teresa discovered Pandora’s pricing for their subscription service on September 7th, 2014. Differentiating from Milk Music The next sources we found gave us an insight about one of our bigger competitors, Milk Music. We found what Samsung’s Milk Music benefits and features that they offer their customers. Our group found an article that was about how Milk Music is exclusive with Samsung phones. Another webpage explained about how Milk Music is built. With these sources, our group was able to understand how to better differentiate Pandora from Milk Music. 68 Target Market Profile Demographics & Psychographics As indicated previously, Pandora’s consumer market potential is tremendous. Recent operations have been focused on improving their growth in the smartphone market and integrating their product into automobiles (Trefis, 2014). Their largest homogenous user segment is the Hispanic population aged 13 to 35 years old located within the United States (Peterson, 2013). “Growth in [our] Hispanic [market] is driven by our ability to reach that consumer in mobile and offer them both Latin and non-Latin music," said Mike Reid, Pandora’s executive director for multicultural. "You've got second- and third-generation Hispanics becoming more influential in this country and therefore the proliferation of smartphones and technology really put us in a good position with this consumer” (Cobo, 2014). Hispanics currently comprise an estimated 19 million (or 25%) of Pandora’s 77 million active listeners. Of these 19 million, about 17.5 million listen to Pandora on their phones and are overall 17% more likely than non-Hispanics to access the Internet through their mobile devices (Cobo, 2014). In terms of vehicles, 43% of Hispanics intend to buy or lease a vehicle within the next two years. Of the vehicles already owned or used regularly, 39% already have an infotainment/ multimedia system built in. In particular, Hispanic households are more likely than white/non- Hispanic households to have in-car technology features weigh more heavily in purchasing decisions (Mintel, 2013A). 69 Demographics & Psychographics Continued Attributing to Hispanics’ digital media consumption, inclination to smartphone usage, and vehicular multimedia systems is their surprisingly young median age of 27 years old (U.S., 2011). With the population of U.S.-born Hispanics on the rise, paired with a stagnant immigration rate, the influx of young consumers continues to grow. Only 36% of Hispanics are foreign born; their median age being 40 years old. The remainder of the population, born in the United States, has a median age of 18 years old (Krogstad, 2014). In 2012, Hispanics had a median income of $39,005 and a poverty rate of 25.6% (U.S., 2013). Despite this, annual discretionary spending totaled over $164.2 billion in the same year (Experian, 2012). About 64% of Hispanics that are 25 years or older have their high school degree; of those, roughly 13.8% have a bachelor’s degree or higher (U.S., 2013). Language prefer- ences are split evenly with the majority of foreignborn (first generation) Hispanics preferring to speak only Spanish, U.S.-born with foreign-born parents (second generation) preferring mostly English but some Spanish, and U.S.born with U.S.-born parents preferring only English (Experian, 2012). Overall, 66% of Hispanics aged 5 years and older are considered to speak English very well. 70 Demographics & Psychographics Continued The Hispanic demographic is considered active, materialistic, hard-working, young, and diverse (Llopis, 2013). Many still carry an emotional attachment to the Spanish language, regardless of their personal language preferences. Companies with content available in Spanish as well as English help make their Hispanic consumers feel culturally respected and individually valued (Experian, 2012). The Hispanic population, now composed of over 54.1 million people, is currently the nation’s second-largest ethnic group behind white/ Caucasians, making their market segment a large and lucrative pursuit (U.S., 2013). “Hispanic consumers don’t want to be ‘sold to’—but rather, courted by brands that authentically empower their cultural relevancy and communicate in ways that naturally resonate with Hispanic cultural values.” (Llopis, 2013) 71 Target Market Profile Target Market Rationale Pandora’s Hispanic target market is The Hispanic demographic is the sec- strongly represented in Pandora, com- ond largest demographic in the United prising 25% of Pandora’s active listen- States, accounting for 54.1 million peo- ers. This Hispanic population is aged 13 ple (U.S., 2013). This large segment of to 35 years old and lives in the United the population can be penetrated us- States (Peterson, 2013). This demo- ing culturally sensitive material such as graphic accounts for 19 million of Pan- language preferences and offering dora’s 77 million active listeners, and both latin and non-latin music choices. has room for growth in the demograph- Gaining a large portion of the United ic segment. Over 90 % of these listeners States population is a beneficial way to are reached on their smart phone. His- continue to grow and expand Pan- panics are more likely to use internet on dora’s market share. their mobile phone than non-Hispanics (Cobo, 2014). This is helpful in increasing the number of listeners via mobile devices. 72 Advertising Strategy & Objectives Creative Brief Situation Currently, Pandora dominates the saturated Internet Radio category, holding 31% of total users. However, Pandora is in the growth stage of its product life cycle and competition is steadily increasing. Pandora has an opportunity for greater promotional and marketing activity that will secure continued growth and retention and reduce competitive threats. Brand sales and loyalty are healthy, but can be improved upon within certain market segments. 73 Creative Brief Continued Objective We want to emphasize the unique services and customer relationship Pandora offers in comparison to our competitors. Pandora not only provides access to Internet Radio, they provide a unique, customizable experience for each customer using their Music Genome Project. The advertising needs to address the issue of customer retention and focus efforts on increasing consumer paid subscription service purchases by 35% at least 3 months after campaign completion. It will be important to differentiate Pandora from the growing competitive market and stress Pandora’s commitment to creating real -world experiences for customers via their Pandora Presents program. The objective of the campaign is to persuade consumers that Pandora is the first choice for Internet Radio. We also need to appeal directly to Pandora’s blanket consumer market with the message that Pandora recognizes the importance of music in the lives of their customers and assure them that Pandora understands their needs. 74 Creative Brief Continued Target Audience Primary Target Demographics: Hispanic / Latino males and females; aged 15-30; average household income of $39,000 and above; married or single; high school education level through college and above. Primary Target Psychographics: Individuals that have a need for a portable, personal music system; have access to mobile smart phone and or desktop computer; high media consumption; value an active lifestyle; materialistic but hardworking; have an emotional attachment to the Spanish language and culture; value their individualism but place great importance on family; have a strong need for empowerment. Primary Target Attitudes and How They Currently View the Brand Pandora is currently viewed as the trailblazer of Internet Radio; despite competition, consumers do not view Pandora as outdated. Consumers see Pandora as the hassle-free, convenient and personalized alternative to other Internet Radio competitors. 75 Creative Brief Continued Promise Pandora is a brand built from passion and dedication to music. Pandora is committed to providing customers with the most unique and individualized music experience possible. Support Pandora is the pioneer of Internet Radio and has the knowledge to satisfy consumers’ unique needs. The Music Genome Project enables Pandora to offer consumers the most personalized music experience possible without the hassle that accompanies competitors’ services. Pandora has remained the number one Internet Radio brand despite aggressive competition. Tone Empowering - Energetic - Creative 76 Advertising Strategy & Objectives Rationale Pandora has one of the largest consumer bases in the Internet radio industry, so our objective is not to gain more listeners, but to increase the subscription rate among our current base. We will achieve these objectives through have an increase in the number of artists maintaining Pandora’s current customers and songs that are offered in the library. with new marketing and advertising efforts. The number of skips will increase for each Pandora has recently increased the price user and there will be a larger selection in for Pandora One subscriptions, but they music. Pandora will begin a rewards pro- are still the lowest subscription cost among gram for users with a subscription in order competitors. In order to keep loyalty, it is to maintain loyalty. On the web portion of Pandora’s mission to keep the product Pandora, there will be features such as vot- consistent with the increasing prices. ing for a sponsored artist or chances to be To keep a competitive advantage, Pando- a part of a concert series and be a part of ra will work towards advancing our sub- a meet and greet with artists that are in the scription features. Pandora’s plan is to spot light. 77 Advertising Strategy & Objectives Rationale, Continued A new marketing approach that Pandora will be a part of by the year 2016 is to bring awareness of Pandora One to college -aged Internet radio users. Pandora will hold events at state schools across the United States. Pandora plans on partnering with another company such as Red Bull, Chegg or other college-related companies to spread awareness. At each event, Pandora will present an artist they are currently sponsoring and hold an on-campus concert. Pandora will increase awareness about the Music Genome Project at each event by focusing user’s attention to the personalized approach Pandora uses for each individual user. Pandora plans on increasing their profit margins in the next few years. Pandora will increase the number of advertisements for nonsubscription users. This will help to gain more revenue through advertising efforts and will push consumers to upgrade to the Pandora One subscription. Pandora also plans to hold a con- cert for a sponsored artist that we will charge admission for entrance. Promotional concerts through Pandora are usually free to users, which creates loyalty with consumers, but in this one concert during the year, there will be a fee because of the sponsorship. The objective to increase the profit margin is necessary because we charge the least amount for subscription fees, so by bringing in an increase in revenue, it will help to enhance features for current consumers. 78 Advertising Strategy & Objectives Rationale, Concluded Advertising objectives such as targeting La- played is a smart phone that shows Pando- tino and Hispanic college-aged users and ra being used. This will develop a young creating an emotional stigma will help to target market because of the use of the bring awareness, knowledge and product phone to play music. The wording and domination over competitors. Pandora will types of music coming out of the phone start a new advertising campaign that will help to spread knowledge of the prod- highlights the phrase, uct and how to use it. This advertisement “Amplify Your Life” campaign will help to build consumer preference for our brand. and targets a specific group. We will create awareness through the wording, colors and product placement used in the advertisement. The product that will be dis- 79 Within the IMC Model Continuation of Pandora Presents The continuation of Pandora Presents is key to the Pandora brand identity. Not only is Pandora Presents a key strategy for developing partnerships, it also reinforces the brand’s image among target customers. This series will allow Pandora to form partnerships with key brands that have a direct tie to our target audience. Sponsorship of new and emerging artists Pandora will be sponsoring new and emerging artists by holding contests that allow users to submit artist nominations. Pandora users can vote on nominated artists and have a say in their future with the brand. This strategy will enable Pandora to strengthen their relationship with existing users and pull in new potential customers. This will not function as a large source of income for Pandora. However, it will encourage consumer engagement and brand favorability. This sponsorship will tie-in to Pandora Presents, with the winner being given the opportunity to open for the headlining musical acts. This opportunity will also create a greater online presence for Pandora outside of their Internet Radio website. The purpose of this venture is to increase Pandora’s user base, expand the brand and build interest among musicians and current users. 80 Within the IMC Model Social Media By using social media like Twitter, Youtube and Instagram, Pandora will create a seamless user experience. Users will have an online platform and community to express their ideas and appreciation of music. This will also allow users to share their experiences at Pandora Presents events. Through the incorporation of social media into our campaign and IMC communications, we are able to tie each aspect of our campaign together. Using a Pandora sponsored Youtube channel that hosts videos of sponsored artists will allow users to view and vote on nominations. Because we want to increase paid subscriptions, we will offer additional votes to Pandora One users. 81 Creative Concept Big Idea: “AMPLIFY YOUR LIFE” ‘Amplify Your Life,’ the campaign’s Using the Music Genome Project, tagline, is the brand’s message. The Pandora connects music lovers major message of our campaign is with genres, artists and songs that to remind users that Pandora Inter- inspire, empower and transform net Radio understands that music lives. Music is alive and constantly plays an irreplaceable role in their changing, it can be recycled and lives and in history. Pandora knows reinvented. Pandora knows that that music, like culture, is not lost music is a reflection of who its users with succeeding generations. are; that is why it is our goal to deliver users the most personalized musical experience possible. 82 The Budget Breakdown and Rationale Seasonality With this campaign budget, our strategy In addition, the budget is will be based primarily on using online me- expected to produce the greatest reach dia accounting for 34% of the budget and for our target audience through digital ad- television consisting of 16% (see Figure 4). vertising; for this reason, the majority of The budget will be distributed and cover spending and budget considerations are the months between July and December. devoted to online, mobile and television. The majority of the budget will primarily be spent during the months of September and October. The strategy calls for spending the bulk of our television budget during The Voice programming, which will run during September and October. 83 Figure 4: Pie Chart of Marketing Expenditures for Proposed Ad Campaign Source: Smitherman, 2014 84 The Budget Breakdown and Rationale, Continued National Vs. Regional The marketing expenditures chart in Figure 5 shows the seasonality of the budget. The media strategy calls for heavier schedule during September and October due to efficiency. The scheduled regional television spots, along with the nationally aired show The Voice will run at the beginning of the season and one month into the airing of the show. The second media buy on The Voice will coincide with the artists’ battles, a timeslot with high ratings and viewer popularity during the show’s season. 85 Figure 5: Bar Graph of Seasonal Spending Source: Smitherman, 2014 86 Media Objectives Target Audience Hispanic / Latino males and females, ages 15-30 High school education level through college and above Married / single, with an average household income of $39,000+ 77 million active Hispanic / Latino listeners Carries an emotional attachment to the Spanish language and culture High media consumption Values individualism, but places great importance on family Have a strong need for empowerment from the brands they buy Engages in an active lifestyle; are materialistic but hardworking 87 Media Objectives Reach and Frequency For this particular campaign, reach is most important due to the niche segment being targeted. Because Pandora is an established brand with the largest market share and high brand loyalty, this campaign does not require high frequency. Instead, we will be focusing on reaching our specific target market utilizing the best-suited mediums possible. Because the target audience uses Pandora’s service habitually, frequency will be utilized as part of the strategy during key months of the campaign. 88 Media Objectives Geographic Coverage Due to the spread of the campaign’s the US market ("DMA Estimates: Hispan- target audience, it is important to have ic or Latino TV Homes"). The West Coast geographic emphasis. This campaign in particular provides several important with be placed regionally as well as na- DMAs. We will also be utilizing the south tionally. Important DMAs include: Los - Austin, Texas in particular. The adver- Angeles, with 1,909,300 Hispanic media tising will be placed in highly Latino / homes and accounts for 13.542% of the Hispanic populated areas. Because the market in the U.S.; Chicago with target segment is narrow, it is crucial to 515,290 Hispanic media homes that ac- use the DMAs that provide the greatest count for 3.655% of the U.S. market; exposure for campaign effectiveness. New York with 1,360,660 Hispanic media homes, accounting for 9.650% of 89 Media Objectives Creative Implications The copy platform and creative strategy The creative strategy determined play an important role in selecting the me- the overall media, however, we dia used for this campaign. The strategy have chosen specific mediums that will aims to reach as much of the target audi- appeal to a wide range of audiences. The ence as possible without alienating Pan- nationally televised program The Voice will dora’s average user. While the strategy reach our primary target audience as well aims to reach Latinos, a recent Nielsen as avid music lovers and Pandora users. study shows an overall growth in the popu- The local TV programing is aimed to reach larity of Latin music, even among non- the primary target and create awareness Latinos. The number of Latin track down- to support campaign promotional efforts. loads has been rising in recent years from The strategy in place provides reach of our 31.1 million in 2010, to 35.3 million in 2012 target segment without alienating existing (Nielsen). and potential Pandora users. Our strategy is designed to expand, not limit our possible media platform usage. 90 Media Objectives Promotional Support Because the campaign will lead up to sponsored events in the selected DMAs, there is an intrinsic need for heavy media support in those areas. Our big promotion is a series of sponsored concerts in select DMAs at the end of the campaign. For this reason, the entire campaign will include promotional support for these events. Media support is important for this campaign because it targets such a specific market. To reach our target audience, we must use media to reinforce Pandora’s brand positioning among users and nonusers. Trade Communication For this particular campaign, it is critical to form partnerships and communicate with those partners for maximum brand promotion. Partnerships will play a critical and essential role in building and promoting the campaign’s message. 91 Media Objectives Budget Limitation The total working budget for this campaign is $5,000,000. Of the $5,000,000, $788,076.00 will be spent on television. Mobile will account for $650,000.00 of the budget, social media will account for $770,000.00 of the budget, and partnerships will cost $616,924.00. Online will account for the largest amount of spending at $1,675,00.00 of the budget. There is a 10% contingency fund of $500,000.00 built into the budget. 92 Media Strategies Media Mix Due to heavy online usage by our target portant, television is too expensive for the market, especially through mobile devic- budget constraints to adequately adver- es, the campaign’s primary media mix is tise on a continuous schedule. As such, it digital and secondary is social media. The has been given lower priority in this cam- budget has been allocated to the online, paign than the digital and social media mobile, and social media platforms ac- vehicles. For our media mix, a 10% contin- cordingly and is scheduled using a 6- gency fund of $500,000 has been re- month continuous pattern. Although im- served. 93 Media Strategies Media Mix: Television For television, the plan utilizes both local paign. Because consumers who and network channel advertisements and watch The Voice are already interested in features new Pandora commercials, which discovering new artists, enjoy exposure to will air at carefully selected times during diverse music genres and show a strong NBC’s, The Voice. The strategy will use lo- engagement and a willingness to partici- cal network television to reach the seg- pate vote casting on competitions. The ments in our target audience with a higher Voice was chosen over American Idol not potential for promotional concert attend- only for timing convenience, but also for its ance. Because Pandora’s promotional prime age demographic. Commercials concerts will feature undiscovered, local airing July through September will adver- artists, we believe that the local popula- tise how and where to vote for Pandora’s tion will be more receptive to advertise- artists, while commercials airing October ments than a national audience. The through December will promote the con- Voice was chosen for its high ratings and cert events. message similarity to the Pandora cam- 94 Media Strategies Media Mix: Mobile Admob will be used as the platform for Admob is a cost efficient method mobile advertising. Admob gives us more of advertising because it avoids users who control by allowing us to set our own either do not use applications or do not budget, dictate how many times we want own a smartphone / tablet. Admob also our ad to show up, what it looks like and works seamlessly across all platforms, in- where exactly we want it delivered. As Ad- cluding: iOS, Android and Windows devic- mob only displays advertisements within es. Additionally, Admob’s targeting capa- other applications, Pandora can success- bilities allow Pandora to advertise concert- fully target those users who are already related advertisements to the only rele- prone to downloading and using applica- vant four regions, (Los Angeles, California; tions on their mobile devices or tablets. Chicago, Illinois; New York City, New York; and Austin, Texas) while simultaneously advertising Pandora services to the rest of the nation. 95 Media Strategies Media Mix: Social Media Pandora’s social media presence is strong for both Facebook and Twitter. Supplementary funding has been budgeted to continue active consumer engagement. The additional budgeted funds will be put towards sponsored posts and banner advertisements. By choosing the two primary social media giants that dominate the industry, Pandora’s reach will be optimized. For this particular advertising campaign, excess funding for Instagram and Google+ was rejected due to projected diminishing marginal returns on increased social media expenditures. 96 Media Strategies Media Mix: Online Google Ads Display Network, Media.net, Youtube and Hulu have been selected for the online budget. The online medium has been allocated more of the budget than any other due to the heavy Internet usage patterns of Hispanics found in our earlier research. Much like Admob for mobile, Google Ads Display Network allows for a customizable budget, interactive advertisements and display locations on websites that are relevant to Pandora and the musicrelated industry. In order to optimize our influence and reach, Media.net will be used. Media.net creates highly contextual ads, mobile docked ads, in-content ads and desktop interstitial ads. All ads are highly customizable, feature high conversion rates and can be dynamically optimized between text and display. Hulu will feature video advertisements and was chosen for its high quality display. Its wide availability and lack of a subscription requirement make Hulu very desirable in terms of potential market reach. Additionally, it is much cheaper to advertise on Hulu than it is on television networks airing the same TV shows. Youtube will be used for video ads as well as banner ads. Using Pandora’s existing Youtube channel, music videos will be uploaded featuring Pandora’s undiscovered artists and serve as a method for promoting the concert series. 97 Media Strategies Media Mix: Partnerships/Collateral Materials The portion of the budget allocated for Allocating a budget for partner partnerships will be distributed among colleges and allowing them to utilize re- each of the four colleges hosting the con- sources available to them is the most cost- cert series (UCLA, University of Illinois at efficient promotional method. This method Chicago, Syracuse University and Texas also saves Pandora from having to cus- A&M) in proportion to the student popula- tomize materials for each of the different tion. Use of the budget is intended for re- campuses. We believe this personalized imbursement of collateral materials, but all approach will be in-line with the theme of advertising expenditures are ultimately the campaign and showcase the unique based on the discretion of each university. creativity and culture of each university. 98 Media Strategies Scheduling This campaign is on a continuous advertis- Although the campaign is consid- ing schedule for six months, running July ered a continuous campaign, television through December. The campaign will co- spots will be run on a pulsing schedule for incide with the partnership events de- the months of September, October and scribed in the budget and media flow November during the prime time television chart. The partners will assist in sponsoring hours. This strategy will most effectively emerging artists, allowing Pandora users to reach our target audience. The television submit their favorite artists; the winner will advertisements will run to coincide with play a free live show. The free concert lo- the emerging artists contests. Our televi- cations are based on the designated mar- sion spots will be on primetime television ket areas as described above. time and more specifically during The Voice. 99 Media Strategies Scheduling, Continued A heavy portion of the budget is devoted to online advertising on a continuous schedule. Pandora will run banner advertisements on sites that are most frequently used by our target audience. The remainder of the budget is split between social media, mobile and the contingency fund. Social media and mobile advertisements will be consistent and continuous throughout the six-month campaign to maximize frequency. 100 Media Strategies Weighting, Reach, and Frequency For this specific campaign, 77 million users (Cobo, teners. Pandora needs to stay con- 2014). As stated above in sistent with the target mar- To maintain consistency, geographic coverage, Los ket in the United States. The the geographic markets Angeles has 1,909,300 His- largest homogenous user that will receive more panic media homes and segment is the Hispanic / “weight” than others are accounts for 13.542% of the Latino population, with a the largest Hispanic- market in the U.S. ("DMA Es- median age of 25 years populated DMAs. The timates: Hispanic or Latino old. The Latino / Hispanic heaviest designated mar- TV Homes"). With this being segment is strongly repre- ket areas are Chicago, Los the largest customer base sented in Pandora’s mar- Angeles, Austin and New within our DMAs, we will ket, comprising 25% of Pan- York City. These areas will heavy-up our reach and dora’s active listeners, also reach our targeted ag- frequency through online which in total is an estimat- es, using different methods mediums in this area ed 19 million of Pandora’s to reach college-aged lis- during the campaign. 101 Media Strategies Weighting, Reach, and Frequency, Continued Our campaign is designed to maximize Our campaign will hit online mediums and reach and frequency using the specific television networks that are relatable and months that reflect a college student’s ac- accessible to college-aged, Latino users. ademic calendar year. We decided on a Within our DMAs, we will strongly target us- six-month campaign to ensure our target ers at educational institutes such as UCLA, gets hit heavily in the few months before Texas A&M, University of Illinois at Chicago our promotional events take place. Our ad- and Syracuse University. These universities vertising frequency stays fairly consistent are some of the top in our DMAs, therefore throughout the campaign, but focuses during the back-to-school months of Au- mostly on the Internet and media to reach gust and September we will heavy our a specific audience. reach to college students and make advertisements most frequent these months. 102 Media Strategies Weighting, Reach, and Frequency, Concluded Our campaign spending is at its highest during the months of September and October because there is a heavy-up in television advertising. During the campaign, we will advertise with The Voice on NBC in order to reach our audience most effectively. Pairing advertisements with a music-themed television show will help to reach a wide range of audiences who are using Pandora. As mentioned previously, our campaign goal is not to gain more listeners, but to keep user retention rate and gain more subscription users. Through this campaign and concert series, we hope to provide more awareness of what Pandora has to offer. 103 Media Tactics Media Flowchart The media flowchart in Figure 6 illustrates our media strategy. As shown, we have scheduled all advertising using a continuous pattern for the majority of the campaign time. Figure 6: Proposed Media Flowchart for Ad Campaign Source: Smitherman, 2014 104 Media Tactics Specific Vehicle Recommendations The Voice In 2014, this television show has earned a rating of 4.0 in the key 18-to-49-year-old demographic. There were roughly 13.5 million viewers (Hamedy, 2014). The Voice is a show all about introducing new talent and different genres. For that reason, we believe that Pandora’s advertisements will be given the highest rate of target reach. Media.net 16.8% of Hispanics use Yahoo for local shopping (“Hispanics Lead Stats”, 2014). Media.net creates highly contextual ads that are placed online. Media.net offers low traffic minimum and personal support. Media.net is considered one of the best advertising networks and will ensure Pandora reaches Hispanic millennials. 105 Media Tactics Specific Vehicle Recommendations Admob The BIA/Kelsey survey found that 48.5% of Admob can reach new users across their Hispanics report using some kind of mobile network of 300,000 plus apps. Their system device for local shopping; that overshad- has advanced targeting options that help ows the 32% of non-Hispanics (“Company find Hispanics at scale. Admob allows for | Press Releases”, 2014). In regards to be- Pandora to track downloads and measure haviors, adult Hispanic smartphone owners accurately the advertising results. Google have been twice as likely to say they is also continuing to grow and is another would be interested in receiving ads on great opportunity for Pandora to reach their phone when compared to non- Hispanics through mobile. Hispanics. Pandora has a great opportunity to be involved by creating interesting and creative ads. 106 Media Tactics Specific Vehicle Recommendations Google Ads Display Network This is the world’s largest online display advertising network. With this network Pandora has the opportunity to reach 90% of all internet users. With Google Display Network, 180 billion ad impressions are served each month. Pandora can use properties like YouTube, Blogger, and Gmail through Google Display Network. Pandora ads will be effective by demographically targeting the Hispanic millennials with this network. Youtube 17.7% of Hispanics surveyed said they use YouTube for local shopping (“Hispanics Lead Stats”, 2014). YouTube generates 800 million unique visitors per month and has 72 hours of video uploaded per minute. Pandora’s channel will showcase sponsored artists and provide a means of advertisement for video ads on other music related channels. 107 Media Tactics Specific Vehicle Recommendations Hulu A study from The New York Times in 2013 reported that one in three millennials watch mostly online video/no broadcast TV. Millennials are also reported to watch 34% of TV online; these bits of information tell us that Pandora can have success reaching millennials through online ads on Hulu (“34% of Millennials Watch”, 2013). 108 Media Tactics Specific Vehicle Recommendations Facebook / Twitter According to the Pew Research Center’s In- five or more times every day. The mean ternet Project, 80% of U.S. Hispanics adults number of daily look-ins by Facebook users use social media. Over 68% of U.S. Hispanics is 4 (Facebook IPO, 2014). Pandora can ad- adults said that they used Facebook, Twitter vertise the new advertisements through or similar social media platforms (“Hispanics sponsored posts, ads and pages. Twitter is Lead Stats”, 2014). The data also stated that also one of the many social media sites that U.S. Hispanics are more likely to follow a is most popular among millennials. 59% of brand on social media than non-Hispanics. millennials are on Twitter (“How Many Mil- Hispanics are heavy engaged with social lennials”, 2014). A Twitter user profile study media and we believe that to be an asset shows that 81% of millennials use Twitter at for Pandora for this campaign strategy. 23% least once a day (“Four insights about mil- of Facebook’s users check their account lennials”, 2014). Thus, social media provides an important platform for Pandora to reach targeted millennials with advertisements. 109 References 34% of Millennials Watch More Online Video Than TV. (2013, October 11). 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