Bouvard: Pandora Is Clueless. Here’s Why.

 

April 10, 2016

 

 

 

 

Radio executives were quick to react to Pandora’s Friday white paper which quotes a recent Edison Research study that says consumers switch radio stations 22 times during their commutes. Of course, the automobile is extremely important to radio because it’s where most listening is done. Cumulus/Westwood One CMO Pierre Bouvard was the first to strike back at Pandora in his latest blog. Bouvard says Pandora is clueless about listening in the car and barely anyone listens to them while driving.

Bouvard took a shot at the recent changes at Pandora as well: “Lots of turmoil these days at Pandora. A steady stream of sudden executive departures. Stalled audience. Spotify and YouTube eating their lunch among 18-24s. Recently Pandora issued a piece on channel switching based on an Edison study of in-car listening.”
Bouvard says radio managers and sellers need to know that most channel switches Edison observed do not count in Nielsen ratings. “Nielsen requires at least five minutes of listening in a fifteen minute period for audience credit. Advertisers can be assured they are buying sustained listening to a station. They are not paying for short bursts of switching.”
Bouvard also says AM/FM crushes Pandora in the car. “AM/FM has a 72% share of listening in the car. Pandora has a 1% share. Podcasting is as big as Pandora in the car. This is according to Edison Research’s ‘Share of Ear’ study from Q4 2015. AM/FM is 72 times bigger than Pandora in the car.”

Bouvard says it’s easy to be envious of AM/FM’s massive reach and huge in-car audience. “Sixty-six percent of streaming occurs at home as background music. AM/FM is a foreground medium with 64% of time spent occurring away from home. AM/FM is the soundtrack of the American worker. Pandora wishes they were used in the car; but barely anyone listens. Pandora’s bigger issue is YouTube and Spotify and hoping that they don’t become the MySpace of streaming audio.”

 

Pandora Isn’t Gaining on Radio’s Grip In The Car

(by MaryBeth Garber) With the average urban commuter spending 42 hours a year stuck in traffic jams, a recent commuter study by Edison Research provides insight into how Americans deal with their daily commute.

Not surprisingly, 90% of them tune to AM/FM radio to be their companion during their daily trek. And while AM/FM radio has been joined by many choices over the years — such as streaming and personal music collections — multiple nationally-representative research studies show that AM/FM radio remains the undisputed first choice and dominant source of audio entertainment in the car.
Given AM/FM radio’s firm hold on its in-car audience, it’s easy to see why streaming services, such as Pandora, want to break AM/FM’s connection to its listeners — but they remain unsuccessful.
Recently, Pandora issued a piece on in-car listening claiming that consumers are not listening to radio ads, and as new connected cars slowly become part of the picture, favorite audio sources while driving are likely to change. However, to support this claim Pandora had to selectively isolate excerpts from two pieces of Edison research studies —an online survey, and a fairly small unrepresentative sample of 101 drivers using Go Pro cameras installed in cars — rather than presenting the whole picture of what American consumers want.

Pandora claims that favorite audio sources while driving will change as more connected cars slowly become available. But a research study by Ipsos — with a nationally representative sample of over 1,000 respondents — found that while consumers do use new streaming services, virtually all consumers – 99% — are comfortable with their current AM/FM in-car radio operation. And 91% of consumers say they want the way they operate their car radio to remain unchanged and would not want it changed into a dashboard app. Overall, the Ipsos study makes it clear that in spite of consumers’ new love of apps and digital products, they have a strong attachment to their AM/FM radio and an overwhelming desire to keep it as it is.

Pandora also claimed research indicated that consumers are not listening to radio ads, but the data they provided doesn’t support that assertion. While Edison’s study does find an AM/FM listener switches the station an average of 22 times per commute, while listeners to other platforms switch an average of 9.3 times — Pandora fails to mention the percentage of time spent listening to each of these audio sources. A previous Edison study, “Share of Ear” Q4 2015, places time spent listening in the car with AM/FM radio at 72%, Sirius/XM at 15%, owned music at 10% and all streaming online content at 4%.

Pandora also neglects to point out the Edison study recorded what happened when commuters listening to AM/FM radio heard ads: 48% of consumers listen to some commercials; 29% didn’t switch at all during commercials; and only 23% switch, but after 15 seconds. Importantly, most of the AM/FM switches happen while music is playing.

What Pandora doesn’t provide in their issued whitepaper is any information about exactly where those switchers went. A recent study by Nielsen/Media Monitors/Coleman Research in November 2015 noted that 82% of listeners who tune out return to their favorite radio station after consuming different content on another station, for example news, traffic or a different song.

An earlier N/MM/CR study from September 2014 also used PPM data to digitally analyze 17.9 million commercial breaks, concluding 93% of the audience level is retained throughout the break when radio spots air, providing further evidence that consumers are tuned into radio — and listening to advertiser’s messages.

And not only are consumers listening to radio ads — they are enthusiastically responding to them as well. A plethora of recent studies by companies like Nielsen and Katz Media Group prove that radio provides an $8 to $1 return on ad spend — clearly demonstrating that ad campaigns are significantly more effective when radio is in the media mix.

Notably, the Edison Commuter study does not, in any way, come to the conclusion that “consumers are not listening to radio ads. Also not appearing in Edison’s research is any data confirming Pandora’s claim that drivers know radio stations often play 10 or more commercials in a row, and that ads and repetitive playlists cause them to switch stations.

What the Edison study does clearly show is that AM/FM radio remains American’s number one choice in cars — and the audio source consumers connect with and spend more time while with in the car — than any other.