Internet radio service Pandora launches ads in cars

Pandora Media Inc. says people who listen to its in-car service will now hear ads.
Pandora Media Inc. says people who listen to its in-car service will now hear ads.
(Pandora Media Inc. )

People who listen to Pandora Media Inc.'s Internet radio service in the car will now hear advertisements as the company tries to add revenue from the automotive market.

The Oakland-based company said Monday that it is rolling out in-car advertising this month to run commercials from brands including BP, Ford Motor Co., State Farm and Taco Bell. However, users will hear fewer ads on Pandora’s auto service than on its versions for the Web and mobile devices.

Pandora works in 130 vehicle models -- including nine of the 10 top-selling vehicles -- and 270 after-market automotive devices. The company is trying to take advantage of a big market of motorists. Half of all radio listening takes place while driving, said Pandora, which started partnering with car companies in 2010.

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“We are now seizing the opportunity to connect advertisers with a more targeted audience than traditional radio can provide,” Pandora chief marketing officer Simon Fleming-Wood said in a statement.

Pandora said its overall listening hours were 1.58 billion in December, up 13% from the same month last year, and that its number of active listeners also increased 13% year-over-year, to 76.2 million.

It said its share of the total U.S. radio market increased to 8.6%, from 7.58% in December 2012.

The new numbers indicate that the service’s popularity continues to hold up against Apple Inc.'s iTunes radio service and Spotify’s new free mobile version.


JPMorgan analyst Doug Anmuth, who follows Pandora, said the updated numbers are a positive sign for the company. “December metrics are solid and suggest Pandora is holding up well despite increased competition,” he wrote in a note to clients.

Shares of Pandora increased more than 14% to $31.49 at the close of trading Monday on Wall Street.


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