Monday, November 18, 2013

Pandora Ads Moving Away From Cookies



Amidst growing concerns about the privacy and efficacy of cookie tracking, Pandora is offering advertisers ad targeting options based on proprietary audience segments rather than cookie-based data collected by third parties.  Pandora is first rolling out two target audience segments – Hispanic listeners and a subset of Spanish-speaking listeners.  To create these two categories, Pandora cross-referenced its registered user data with U.S. census data to identify zip codes with high populations of their two target segments and overlaid the two data sets to infer which listener belonged in which bucket.

Pandora’s aims to enable advertisers to better target ads on the streaming music service.  Prior to this rollout, cookies were used mostly for display ads and did not work for ad targeting on Pandora’s mobile apps, where the bulk of Pandora’s advertising revenue is generated.  It is estimated that Pandora’s proprietary Hispanic and Spanish-speaking listener segments are at least 10% more accurate than those created based on third-party data. 

This is yet another example of the growing trend of leveraging registration and log-in data to do better ad targeting and hopefully mitigate privacy concerns.  However, Pandora should tread lightly as it considers eventually applying its user data to ad targeting on other sites and apps.  With most users still ignoring the fine print when registering for an account, the last thing Pandora wants to do is violate their users’ implicit trust by selling their data so that advertisers can target them elsewhere on the Internet.   

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